BOMBARDIER TRANSPORTATION HOLDINGS USA, INC. v. UNITED CHEMI-CON, INC.

Filing 81

MEMORANDUM OPINION & ORDER - IT IS ORDERED THAT: 1. Third-Party Defendant New York City Transit Authoritys motion 61 to dismiss the Third-Party Complaint, is GRANTED; 2. Third-Party Defendant Kawasaki Rail Cars, Inc.s motion 58 to dismiss the Thi rd-Party Complaint, is GRANTED; 3. United Chemi-Con, Inc.s Third-Party Complaint is DISMISSED with prejudice; 4. The Clerk of Court is directed to TERMINATE New York City Transit Authority and Kawasaki Rail Cars, Inc. as Third-Party Defendants in thi s matter; 5. The parties Joint Motion 78 for Status Conference, is GRANTED; and 6. A telephone status conference will be held on April 6, 2018 at 10:00 a.m. Plaintiffs counsel shall initiate the call. Signed by Judge Yvette Kane on 3/22/18. (Attachments: # 1 ORDER) (rwMD)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
BOMBARDIER TRANSPORTATION
HOLDINGS USA, INC.,
Plaintiff
v.

:
:
:
:
:
UNITED CHEMI-CON, INC.,
:
Defendant
:
:
______________________________________ :
UNITED CHEMI-CON, INC.,
:
Third-Party Plaintiff
:
v.
:
:
KAWASAKI RAIL CARS, INC. and
:
NEW YORK CITY TRANSIT
:
AUTHORITY,
:
Third-Party Defendants
:

No. 2:16-cv-01903

(Judge Kane)

MEMORANDUM
Before the Court are: (1) Third-Party Defendant New York City Transit Authority
(“NYCTA”)’s Motion to Dismiss Third-Party Complaint (Doc. No. 61), and (2) Third-Party
Defendant Kawasaki Rail Cars, Inc. (“Kawasaki”)’s Motion to Dismiss Third-Party Complaint
(Doc. No. 58). For the following reasons, the Court will grant the motions to dismiss.
I. BACKGROUND 1
Sometime in 2010, Kawasaki contracted with NYCTA to build rail cars for a project
known as the R188 Car Build (“Rail Car Contract”). (Doc. No. 42 ¶ 8.) The Rail Car Contract
required Kawasaki to build 23 rail cars, with NYCTA retaining an option to require Kawasaki to
build up to 120 additional rail cars. (Id. ¶ 9.) Subsequently, Kawasaki, as general contractor,
entered into an agreement with Bombardier for the supply of propulsion systems for 23 new rail
1

The following factual background is taken from the allegations of Plaintiff Bombardier
Transportation Holdings USA, Inc. (“Bombardier”)’s First Amended Complaint against
Defendant United Chemi-Con, Inc. (“UCCI”), as well as the allegations of Third-Party Plaintiff
UCCI’s Third-Party Complaint. (Doc. Nos. 29, 42.)
1

cars (the “Kawasaki Subcontract”). (Id. ¶¶ 11-12.) The Kawasaki Subcontract incorporated the
terms of the Rail Car Contract and included an option for Kawasaki to purchase additional
propulsion units from Bombardier. (Id. ¶ 13.) The Kawasaki Subcontract contained technical
specifications for aspects of the propulsion units, including capacitors, a key component of the
propulsion systems. (Id. ¶ 14.) Specifically, Technical Specification 9.5.3 addressed the
capacitors and stated that “Filter capacitors shall be oil filled or electrolytic with 15 years
minimum design life.” (Id. ¶ 15.)
Bombardier contracted with UCCI by way of purchase orders to design and fabricate
capacitors for the Rail Car Project (the “UCCI Subcontract”). (Id. ¶ 17.) The UCCI Subcontract
incorporated the technical specifications in the Rail Car Contract and the Kawasaki Subcontract.
(Id.) Bombardier alleges that UCCI was “aware that the life span for the capacitors was a
material term and that Bombardier would not have entered into the UCCI Subcontract if UCCI
had not agreed to provide a capacitor with the required lifespan.” (Id. ¶ 18.) By way of eight
purchase orders, Bombardier ordered approximately 5,439 capacitors. (Id. ¶ 19.)
After UCCI fabricated the capacitors, UCCI shipped them to a Bombardier subcontractor
for assembly into a “containment unit,” each containing eight capacitors. (Id. ¶ 20.) Each rail
car contained four containment units, or a total of 32 capacitors in each rail car. (Id.) The
containment units underwent further assembly by Bombardier to become “weldments,” which
were then shipped to Kawasaki in Yonkers, New York for inclusion in the rail cars. (Id. ¶ 21.)
Bombardier alleges that the capacitors began to fail in October of 2015. (Id. ¶ 22.) At
that time, 31 rail cars contained weldments with capacitors manufactured by UCCI, 99 additional
weldments containing UCCI capacitors were delivered but not yet installed, and the remaining
capacitors had been delivered to Bombardier’s subcontractor for assembly into containment

2

units. (Id. ¶ 23.) As a result, Bombardier alleges that it was forced to retrofit the 31 cars
containing weldments using UCCI capacitors and change out the 99 weldment units containing
UCCI capacitors. (Id. ¶ 24.) Bombardier alleges that it provided UCCI with notice of the
failures and that UCCI failed to take remedial action, resulting in damages to Bombardier in
excess of $800,000 due to the capacitor failures. (Id. ¶¶ 24, 26-27.)
On December 22, 2016, Bombardier filed a complaint in the United States District Court
for the Western District of Pennsylvania (Doc. No. 1), against UCCI alleging claims of: breach
of express warranty (Count 1); breach of implied warranty (Count 2); Breach of Contract
pursuant to the Pennsylvania Uniform Commercial Code and common law (Counts 3 and 4);
Indemnification by Contract and under common law (Counts 5 and 6); Unjust Enrichment
(Count 7); and Negligence (Count 8). UCCI filed its Answer to the Complaint with Affirmative
Defenses on March 24, 2017. (Doc. No. 12.) Subsequently, Judge Nora Barry Fischer issued a
Case Management Order setting case management deadlines, including a deadline of June 2,
2017 for motions to amend or add parties (Doc. No. 24), and simultaneously referred this case to
mediation (Doc. No. 25).
On May 31, 2017, without filing a motion seeking leave of court to file a third-party
complaint as required by Federal Rule of Civil Procedure 14(a)(1), UCCI filed a Third-Party
Complaint against Kawasaki and NYCTA, alleging counts of common law indemnification and
contribution against both Kawasaki and NYCTA, because “[i]f the UCC capacitors failed, then
the cause of any failure in the UCC capacitors is caused by the propulsion mechanism present in
the propulsion system designed by Kawasaki and/or the misapplication of excessive amounts of
voltage by NYTA.” (Doc. No. 29 at 2.)

3

Meanwhile, on June 2, 2017, Bombardier filed a Motion for Leave to File a First
Amended Complaint. (Doc. No. 30.) The Court granted Bombardier’s motion by Order dated
June 13, 2017, and directed the filing of a First Amended Complaint by June 20, 2017. (Doc.
No. 38.) On June 15, 2017, Bombardier filed its First Amended Complaint, which asserts the
same causes of action contained in its original Complaint, with the addition of some factual
allegations. (Doc. No. 42.) UCCI filed its Answer to the First Amended Complaint on July 6,
2017. (Doc. No. 50.)
After the case failed to resolve through mediation, Judge Fischer issued an Amended
Case Management Order on July 14, 2017, setting a close of fact discovery date for March 30,
2018. (Doc. No. 52.) On August 17, 2017, Kawasaki filed a Motion to Dismiss the third-party
claims asserted against it, with a supporting brief. (Doc. Nos. 58, 59.) In its moving papers,
Kawasaki argues that UCCI’s claims against it fail as a matter of law because: (1) claims of
contribution and common law indemnity are available only between defendants liable to a
plaintiff in tort, and Bombardier’s claim of negligence against UCCI is barred by the economic
loss and gist of the action doctrines; and (2) UCCI does not allege a legal relationship with
Kawasaki that is a necessary predicate for an indemnity claim. (Doc. No. 59 at 2.)
On August 18, 2017, NYCTA filed its Motion to Dismiss the third-party claims asserted
against it, with a supporting brief. (Doc. Nos. 61, 62.) In its moving papers, NYCTA argues that
UCCI’s claims against it should be dismissed: (1) pursuant to Federal Rule of Civil Procedure
12(b)(2) for lack of personal jurisdiction over NYCTA; and (2) pursuant to Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim. (Doc. No. 62 at 2-3.) UCCI filed briefs in
opposition to both motions to dismiss (Doc. Nos. 65, 66), and Bombardier also filed briefs
responding to both motions to dismiss (Doc. Nos. 64, 69). Kawasaki and NYCTA filed reply

4

briefs in further support of their motions in late September 2017. (Doc. Nos. 72, 73.) On
September 28, 2017, this case was reassigned to the undersigned. (Doc. No. 74.) On October
10, 2017, this Court issued an Order providing that all case-related deadlines remained in effect.
(Doc. No. 75.) 2 The pending motions to dismiss are ripe for disposition.
II. LEGAL STANDARD
A. Federal Rule of Civil Procedure 14
Federal Rule of Civil Procedure 14 provides as follows:
[a] defending party may, as third-party plaintiff, serve a summons and complaint
on a nonparty who is or may be liable to it for all or part of the claim against it.
But the third-party plaintiff must, by motion, obtain the court’s leave if it files the
third-party complaint more than 14 days after serving the original answer.
Fed. R. Civ. P. 14(a)(1). The Rule also provides that “[a]ny party may move to strike the thirdparty complaint.” Fed. R. Civ. P. 14(a)(4).
In order for a third-party claim to be valid, there must be a basis for liability between the
defendant/third-party plaintiff and the third-party defendant. See C. Wright, A. Miller, & M.
Kane, 6 Federal Practice and Procedure § 1446 (3d ed.) (“A third-party claim may be asserted
under Rule 14(a)(1) only when the third party’s liability is in some way dependent on the
outcome of the main claim or when the third party is secondarily liable to the defending party.”).
A defendant may not assert a third-party claim under Rule 14 against a party that is solely liable
to the plaintiff. See, e.g., Herndon Borough Jackson Twp. Joint Mun. Auth. v. Pentair Pump
2

On February 28, 2018, the parties filed a Joint Motion for Status Conference (Doc. No. 78),
representing that on or about July 7, 2017, the parties participated in a status conference with the
court wherein the parties agreed that, in light of the fact that both Third-Party Defendants
intended to file motions to dismiss, they would not engage in written discovery, other than the
pending discovery requests between Bombardier and UCCI, until the resolution of the motions to
dismiss filed by the Third-Party Defendants. However, this agreement as to the conduct of
discovery was not memorialized in an order of the Court. Given the approaching fact discovery
deadline, the parties’ joint motion requests a status conference with the Court to discuss the
existing Case Management Order.
5

Grp., Inc., No. 4:12-cv-01116, 2015 WL 2166097, at *2 (M.D. Pa. May 8, 2015); O’Mara Enter.,
Inc. v. Mellon Bank, N.A., 101 F.R.D. 668, 670 (W.D. Pa. 1983).
Rule 14 is the proper procedure by which to implead a third-party defendant when “state
substantive law recognizes a right of contribution and/or indemnity.” In re One Meridian Plaza
Litig., 820 F. Supp. 1492, 1496 (E.D. Pa. 1993) (citing Smith v. Whitmore, 270 F.2d 741 (3d
Cir. 1959)). Further, “[i]n general, whether a particular third-party defendant may be impleaded
is a question which ‘rests with the sound discretion of the trial court.’” State Coll. Area Sch.
Dist. v. Royal Bank of Can., 825 F. Supp.2d 573, 579 (M.D. Pa. 2011) (quoting Hartford
Casualty Ins. Co. v. ACC Meat Co., No. 1:10-cv-1875, 2011 WL 398087, at *1 (M.D. Pa. Feb. 2,
2011)).
B. Federal Rule of Civil Procedure 12(b)(2)
Federal Rule of Civil Procedure 12(b)(2) permits a defendant to bring a motion
challenging the court’s right to exercise personal jurisdiction over it. Fed. R. Civ. P. 12(b)(2).
Once “the defendant raises the question of personal jurisdiction, the plaintiff bears the burden to
prove, by a preponderance of the evidence, facts sufficient to establish personal jurisdiction.”
Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992). On a motion to dismiss
pursuant to Rule 12(b)(2), the plaintiff must “establish[] jurisdictional facts through sworn
affidavits or other competent evidence.” Time Share Vacation Club v. Atl. Resorts, 735 F.2d 61,
66 n.9 (3d Cir. 1984). “[A]t no point may a plaintiff rely on the bare pleadings alone in order to
withstand a defendant’s Rule 12(b)(2) motion to dismiss for lack of in personam jurisdiction.”
Id.
“A federal court may assert personal jurisdiction over a nonresident of the state in which
the court sits to the extent authorized by the law of the state.” Carteret Sav. Bank, 954 F.2d at

6

144-45 (quoting Provident Nat’l Bank v. Cal. Fed. Sav. & Loan Ass’n, 819 F.2d 434, 436 (3d
Cir. 1987)). Pennsylvania’s long-arm statute permits the Court to exercise personal jurisdiction
“to the fullest extent allowed under the Constitution of the United States.” 42 Pa. Cons. Stat. §
5322(b). Therefore, in its exercise of personal jurisdiction, this Court is constrained only by the
Due Process Clause of the United States Constitution, which requires that a defendant has
“certain minimum contacts with [the forum state] such that maintenance of the suit does not
offend traditional notions of fair play and substantial justice.” O’Connor v. Sandy Lane Hotel
Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310,
316 (1945)). Requiring “minimum contacts” between the defendant and the forum state gives
“fair warning” to a defendant that he or she may be called to defend a lawsuit in that state. See
Marten v. Godwin, 499 F.3d 290, 296 (3d Cir. 2007) (quotation omitted).
Two types of personal jurisdiction comport with these notions of due process: specific
and general jurisdiction. Daimler AG v. Bauman, 134 S. Ct. 746 (2014). Specific jurisdiction
encompasses cases “in which the suit ‘aris[es] out of or relate[s] to the defendant’s contacts with
the forum.’” Id. at 754 (citations omitted). General jurisdiction, however, may be exercised by a
court when foreign corporations’ “affiliations with the State are so ‘continuous and systematic’
as to render them essentially at home in the forum State.” Id. (citations omitted). A corporate
defendant is usually found to be “at home” in the state of the corporation’s place of incorporation
or principal place of business. Id. at 760. However, a corporate defendant can sometimes be
found to be “at home” in another state where its operations in that state are “so ‘continuous and
systematic’ as to render [it] essentially at home in the forum State.” Id. at 761 (citation omitted).
C. Federal Rule of Civil Procedure 12(b)(6)

7

A motion filed pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency
of the complaint’s factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint
must contain “a short and plain statement of the claim showing that the pleader is entitled to
relief,” in order to “give the defendant fair notice of what the . . . claim is and the grounds upon
which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks
omitted) (interpreting Fed. R. Civ. P. 8(a)). Generally, a court considering a motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6) must determine whether the complaint
contains sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on
its face.” Iqbal, 556 U.S. at 678.
Consistent with the Supreme Court’s rulings in Twombly and Iqbal, the Third Circuit
requires district courts to engage in a two-part analysis when reviewing a Rule 12(b)(6) motion:
(1) first, a court should separate the factual and legal elements of a claim, accepting well-pleaded
factual matter and disregarding legal conclusions; (2) second, a court should determine whether
the remaining well-pled facts sufficiently demonstrate that a plaintiff has a “plausible claim for
relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (quoting Iqbal, 556
U.S. at 679). Facial plausibility exists when the plaintiff pleads factual content “that allows the
court to draw a reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (internal citations omitted).
In conducting its analysis, a court must accept all well-pleaded factual allegations in the
complaint as true for purposes of determining whether the complaint states a plausible claim for
relief, and must view the factual allegations in the light most favorable to the plaintiff. Phillips
v. Cty of Allegheny, 515 F.3d 234, 231 (3d Cir. 2008). The court’s determination on Rule
12(b)(6) review is not whether the non-moving party “will ultimately prevail,” but whether that

8

party is “entitled to offer evidence to support the claims.” United States ex rel. Wilkins v. United
Health Grp., Inc., 659 F.3d 259, 302 (3d Cir. 2011) (internal citations omitted). The court’s
analysis is a context-specific task requiring the court “to draw on its judicial experience and
common sense.” Iqbal, 556 U.S. at 663-64.
In ruling on a 12(b)(6) motion to dismiss for failure to state a claim, “a court must
consider only the complaint, exhibits attached to the complaint, matters of public record, as well
as undisputedly authentic documents if the complainant’s claims are based upon these
documents.” Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (citing Pension Benefit Guar.
Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993)). A court may also
consider “any ‘matters incorporated by reference or integral to the claim, items subject to judicial
notice, matters of public record, orders, [and] items appearing in the record of the case.’” Buck
v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006) (quoting 5B Charles A. Wright &
Arthur R. Miller, Federal Practice & Procedure § 1357 (3d ed. 2004)).
III. DISCUSSION
A. Requirements of Federal Rule of Civil Procedure 14
Before considering the substantive arguments contained in the Third-Party Defendants’
motions to dismiss the Third-Party Complaint, and despite the fact that the issue was not raised
by the parties, the Court first addresses whether UCCI’s filing of the Third-Party Complaint
comports with the requirements of Federal Rule of Civil Procedure 14. As stated above, Federal
Rule of Civil Procedure 14(a)(1) dictates the procedure applicable to use of Rule 14 as follows:
[a] defending party may, as third-party plaintiff, serve a summons and complaint
on a nonparty who is or may be liable to it for all or party of the claim against it.
But the third-party plaintiff must, by motion, obtain the court’s leave if it files the
third-party complaint more than 14 days after serving the original answer.

9

Fed. R. Civ. P. 14(a)(1) (emphasis added). Upon motion, “[i]t is within the sound discretion of
the district court whether to allow a defendant to file a third-party complaint.” Sullivan v.
Limerick Golf Club, Inc., No. 06-4680, 2008 WL 2502133 at *1 (E.D. Pa. June 23, 2008) (citing
Somportex Ltd. v. Phila. Chewing Gum Corp., 453 F.2d 435, 439 (3d Cir. 1971.
Here, UCCI filed its answer and affirmative defenses to Bombardier’s complaint on
March 24, 2017 (Doc. No. 12), and filed its Third-Party Complaint on May 31, 2017 (Doc. No.
29), more than 14 days after serving its original answer, without obtaining leave of court to do
so. 3 Accordingly, “[t]he proper response by the third-party defendant in such a case is to move to
strike the third-party complaint.” 3 James Wm. Moore, Moore’s Federal Practice § 14.24 at 1463 (3d ed. 2013). Although neither Kawasaki nor NYCTA raised UCCI’s failure to comply with
Rule 14 by way of a motion to strike under Rule 14(a)(4), instead moving to dismiss the ThirdParty Complaint on Rule 12(b)(2) and 12(b)(6) grounds, the mandatory language of Federal Rule
of Civil Procedure 14(a)(1) applies here, and UCCI’s failure to move as required by the Rule
justifies striking the Third-Party Complaint. Sullivan, 2008 WL 2502133 at *2; Evans v. AllenWilliams Corp., No. 1988-75, 1997 WL 195449 at *3 n.3 (D. Vi. Mar. 7, 1997) (noting that “a
third-party complaint served without leave of court is subject to a motion to strike and that it is
within the court’s discretion to grant such a motion”) (quoting C. Wright, A. Miller & M. Kane,
6 Federal Practice and Procedure § 1454 (2d ed. 1990)). “[L]itigants must comply with the basic
edicts of both Federal Rule 14 [and any applicable local rule] that once a party fails to file a
third-party complaint within [the time frame provided by the Rule], the untimely party must
3

The Case Management Order entered by Judge Nora Barry Fischer on April 19, 2017 contains
no exception to Federal Rule of Civil Procedure 14’s requirement to seek leave of court to file a
third-party complaint under these circumstances. (Doc. No. 24.) That Case Management Order
provides that “[a]ny motion to add new parties shall be filed by no later than June 2, 2017. Any
motion to amend pleadings shall be filed by no later than June 2, 2017.” (Id. at 3.) The Local
Rules of Court for the United States District Court for the Western District of Pennsylvania
contain no rule modifying the dictates of Federal Rule of Civil Procedure 14.
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obtain leave from the court in order to file a third-party complaint against a third-party
defendant.” Roberts v. Leasure, No. 05-3495, 2006 WL 1967335, at *2 (E. D. Pa. July 11,
2006).
Based on the foregoing authorities, the Court would be inclined to strike the Third-Party
Complaint due to UCCI’s failure to comply with Federal Rule of Civil Procedure 14; however, it
declines to do so here, given the somewhat unique procedural posture of this case. Specifically,
at the time of the filing of the Third-Party Complaint, this case was assigned to a different judge
who subsequently conducted a status conference with the parties (Doc. No. 52), at which the
issue was apparently not raised and after which the parties and the court appear to have had a
shared understanding that the Third-Party Defendants intended to file motions to dismiss the
Third-Party Complaint on substantive grounds, rather than file motions to strike the Third-Party
Complaint pursuant to Federal Rule of Civil Procedure 14(a)(4) (id.). Accordingly, despite
UCCI’s failure to comply with Federal Rule of Civil Procedure 14, in light of the unique
procedural posture of this case, and the parties’ failure to raise any complaint regarding UCCI’s
delay in asserting its Third-Party Complaint, the Court declines to strike the Third-Party
Complaint and will consider the substance of NYCTA and Kawasaki’s motions to dismiss.
B. NYTCA’s Motion to Dismiss
As noted above, in its brief supporting its Motion to Dismiss the Third-Party Complaint,
Third-Party Defendant NYCTA first argues that this Court lacks personal jurisdiction over it.
(Doc. No. 62 at 2.) Specifically, NYCTA maintains that it is a public benefit corporation created
under the Public Authorities Law of New York and tasked with operating transit facilities within
the New York metropolitan area. (Id.) NYCTA maintains that it has no contacts with
Pennsylvania, and because none of the factual allegations giving rise to the Third-Party

11

Complaint occurred in Pennsylvania, the Court lacks both general and specific personal
jurisdiction over it. (Id.) In addition, NYCTA argues that UCCI’s Third-Party Complaint
against it fails to state a claim upon which relief can be granted because: (1) to the extent
UCCI’s Third-Party Complaint alleges that NYCTA’s alleged negligence caused Bombardier’s
damages, and not that NYCTA is directly liable to UCCI, UCCI’s claims are not permissible
under Federal Rule of Civil Procedure 14(a); (2) UCCI cannot state a viable claim for
contribution because UCCI’s duty to Bombardier arises out of a contractual relationship between
those parties, and contribution applies only to the relationship between joint tortfeasors; (3)
UCCI cannot state a viable claim for indemnification because there is no legal relationship
(contractual or otherwise) between UCCI and NYCTA; and (4) UCCI’s Third-Party Complaint
is derivative of Bombardier’s contractual relationship with UCCI, so any claims that UCCI may
have against NYCTA are barred by the economic loss doctrine and gist of the action doctrine.
(Doc. No. 62 at 3.) The Court first addresses NYCTA’s jurisdictional argument.
Pursuant to the legal standards articulated above, NYCTA argues that UCCI’s ThirdParty Complaint fails to assert any allegations establishing a prima facie case of general or
specific jurisdiction over it, pointing out that the Third-Party Complaint is “completely silent on
the issue of jurisdiction,” and merely “adopts the allegations contained within Bombardier’s First
Amended Complaint,” in which Bombardier alleges that the Court has personal jurisdiction over
UCCI. (Doc. No. 82 at 2.) Given that fact, and the fact that NYTCA’s motion has challenged
this Court’s personal jurisdiction over it, NYCTA correctly notes that UCCI bears the burden to
“establish[] jurisdictional facts through sworn affidavits or other competent evidence,” and
cannot “rely on the bare pleadings alone in order to withstand a defendant’s Rule 12(b)(2)

12

motion to dismiss for lack of in personam jurisdiction.” Time Share Vacation Club, 735 F.2d at
66 n.9.
In opposition to NYCTA’s motion, while Third-Party Plaintiff UCCI speculates about
scenarios under which discovery may reveal NYCTA contacts with this forum sufficient to
establish personal jurisdiction over it, UCCI fails to even attempt to “establish[] jurisdictional
facts through sworn affidavits or other competent evidence,” Time Share, 735 F.2d at 66 n.9, as
it is required to do when facing a Rule 12(b)(2) motion to dismiss. 4 Despite UCCI’s failure to
meet its burden, Third-Party Defendant NYCTA in reply proffers the affidavit of Aubrey
Douglas, Director of Car Equipment in NYCTA’s Department of Subways, in support of its
contention that this Court lacks personal jurisdiction over it. (Doc. No. 72-1.)
In his affidavit, Douglas, who states that he has been responsible for managing the Rail
Car Contract awarded to Kawasaki (id. ¶ 1), represents that NYCTA is a public benefit
corporation organized and existing pursuant to the laws of the state of New York, with a
principal place of business located at Two Broadway, New York, New York (id. ¶ 3). He further
states that “[u]pon information and belief, Kawasaki is a corporation incorporated under the laws
of New York, with its principal place of business located at 29 Wells Avenue, Building No. 4,
Yonkers, New York.” (Id. ¶ 4.) He states that the Rail Car Contract, awarded to Kawasaki on
May 28, 2010, provides that it “shall be deemed to be executed in the City of New York, State of
New York . . . and shall be governed by and construed in accordance with the laws of the State
4

Instead, UCCI relies solely on its argument that NYCTA did not discharge its burden to submit
“affidavits or other competent evidence” in support of its motion, which UCCI argues relieves it
of its burden to produce any such evidence in support of its claim of jurisdiction. However,
UCCI misconstrues the burdens applicable to the parties in connection with a Rule 12(b)(2)
motion to dismiss. It is Third-Party Plaintiff UCCI’s burden to submit “sworn affidavits or other
competent evidence” in support of its assertion of jurisdiction in response to Third-Party
Defendant NYCTA’s motion challenging that jurisdiction, especially where, as here, the ThirdParty Complaint (and the Amended Complaint) contain no allegations as to the basis for this
Court’s personal jurisdiction over NYCTA.
13

of New York.” (Id. ¶¶ 4-5.) Further, he clarifies that Bombardier is a subcontractor to Kawasaki
with no contractual relationship with NYCTA under the Rail Car Contract, which calls for
Kawasaki to incorporate the requirements of that contract into its own subcontracts and to
manage and control its subcontractors’ performance. (Id. ¶ 8.) Douglas further provides that
NYCTA is similarly not a party to any contract that Kawasaki’s subcontractor Bombardier may
have with any other third parties, including UCCI, nor was NYCTA involved in any negotiations
with Bombardier in connection with the Rail Car Contract. (Id. ¶¶ 9-10.)
Additionally, Douglas states that “[u]pon information and belief, all pre-contractual
negotiations and communications between NYCTA and Kawasaki relating to the [Rail Car]
Contract occurred in New York State;” and further, that the Rail Car Contract “requires that
monthly project progress meetings be held in New York City and all such meetings were, in fact,
held in New York.” (Id. ¶¶ 11-12.) Douglas attests that the Rail Car Contract makes clear that
Kawasaki is an independent contractor, explicitly stating “that Kawasaki is not NYCTA’s agent,
and that no agency relationship between NYCTA and Kawasaki is to be deemed created by the
execution of the [Rail Car Contract],” and “that nothing contained therein shall be deemed to
give any third party a claim or cause of action against NYCTA.” (Id. ¶¶ 13-14.) Finally,
Douglas attests that, upon information and belief, “NYCTA did not place any advertisement
relating to the solicitation of bids for the [Rail Car Contract] in any Pennsylvania publication;”
“NYCTA does not maintain any bank accounts in the state of Pennsylvania;” “NYCTA is not
registered as a business entity with the Pennsylvania Department of State;” and “NYCTA does
not pay any taxes in the Commonwealth of Pennsylvania.” (Id. ¶¶ 15-18.)
In their briefing, both parties appear to accept the fact that specific jurisdiction is the only
possible basis for this Court to assert personal jurisdiction over NYCTA, as NYCTA does not

14

have “affiliations with [Pennsylvania that] are so ‘continuous and systematic’ as to render [it]
essentially at home” in Pennsylvania. Daimler, 134 S. Ct. at 754. As noted above, specific
jurisdiction is established where (1) a defendant purposely directs its activities at the forum state;
(2) the plaintiff’s claim arises out of or relates to at least one of those specific activities; and (3)
the exercise of jurisdiction is consistent with traditional notions of fair play and substantial
justice. O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 317 (3d Cir. 2007). However, as
noted above, UCCI presents no sworn affidavits or other competent evidence to satisfy its burden
to establish a prima facie case of personal jurisdiction over NYCTA here, instead arguing that
discovery may reveal that NYCTA purposefully directed activities toward Pennsylvania, and that
UCCI’s claim relates to those specific activities. (Doc. No. 67.)
Upon consideration of the relevant authorities, and the representations contained in the
Douglas Affidavit submitted by NYCTA in reply to UCCI’s opposition brief, this Court
concludes that NYCTA does not have sufficient minimum contacts with the forum state to
support this Court’s exercise of personal jurisdiction over it. Accordingly, the Court will grant
NYCTA’s motion to dismiss UCCI’s Third-Party Complaint for lack of jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(2).
C. Kawasaki’s Motion to Dismiss 5
As noted above, in its brief in support of its motion to dismiss, Kawasaki argues that
UCCI’s claims against it fail as a matter of law because: (1) claims of contribution and common
5

State law governs UCCI’s contribution and common law indemnity claims. EQT Prod. Co. v.
Terra Servs. LLC, 179 F. Supp. 3d 486, 493 (W.D. Pa. 2016). In a diversity action, the Court
must apply the forum state’s choice of law rules. Hammersmith v. TIG Ins. Co., 480 F.3d 220,
226 (3d Cir. 2007). Under Pennsylvania choice of law rules, a court must first determine if there
is an actual conflict between the potentially applicable laws, here, Pennsylvania and New York,
as Kawasaki is a New York corporation. Id. at 230. If there are no relevant differences, no
conflict exists. Id. Here, both parties agree that there are no material distinctions between
Pennsylvania and New York law, and so have applied Pennsylvania law to their analyses. The
Court does the same.
15

law indemnity are available only between defendants liable to a Plaintiff in tort, and
Bombardier’s claim of negligence against UCCI is barred by the economic loss and gist of the
action doctrines; and (2) UCCI does not allege a legal relationship with Kawasaki that is a
necessary predicate for an indemnity claim. (Doc. No. 59 at 2.)
In opposition to Kawasaki’s motion, UCCI acknowledges that claims of contribution and
common law indemnity are available only between joint tortfeasors, but argues that, in the
absence of discovery illuminating the basis for Bombardier’s claims against UCCI (i.e., whether
those claims sound in contract or in tort), it is premature for the Court to make any determination
as to the applicability of the economic loss or gist of the action doctrines to Bombardier’s tort
claims. (Doc. No. 65 at 4.) UCCI maintains that courts routinely deny motions to dismiss
premised on the gist of the action or economic loss doctrines prior to discovery because they lack
a factual record upon which to make such a determination. As to the existence of a legal
relationship between UCCI and Kawasaki that may justify the shifting of any liability from
UCCI to Kawasaki pursuant to indemnification, UCCI says only that “[a]ll suppliers of a product
in the chain of distribution, whether a partmaker or assembler, are potentially liable in
indemnification,” citing a Pennsylvania Superior Court case, Burch v. Sears, Roebuck and Co.,
467 A.2d 615 (Pa. Super. 1983).
As noted above, in order for a third-party claim to be valid, there must be a basis for
liability between the defendant/third-party plaintiff and the third-party defendant. See Wright,
Miller & Kane, 6 Federal Practice and Procedure § 1446 (3d ed.) In order to make such a
determination as to a basis for liability, the Court refers to Pennsylvania’s substantive law
governing contribution and common law indemnity claims. EQT Prod. Co.,179 F. Supp. 3d at
493 (citation omitted).

16

1. Contribution and Common Law Indemnity
Under Pennsylvania law, the right of contribution is governed by the Pennsylvania
Uniform Contribution Among Tortfeasors Act, 42 Pa. C.S. §§ 8322-8327. Pursuant to the
statute, contribution is available only among joint tortfeasors, who are “two or more persons
jointly or severally liable in tort for the same injury to persons or property.” 42 Pa.C.S. §§ 8322,
8324(a). Contribution is not available for breach of contract claims. EQT Prod. Co. 179 F.
Supp. 3d at 493.
By contrast,
[c]ommon law indemnity is not a fault-sharing mechanism that allows a party,
whose negligence was minor, to recover from the tortfeasor whose negligence
was dominant. It is a fault-shifting mechanism that comes into play when a
defendant held liable by operation of law seeks to recover from a defendant
whose conduct actually caused the loss.
City of Wilkes-Barre v. Kaminski Bros., 804 A.2d 89, 92 (Pa. Commw. Ct. 2002). Indemnity
“is appropriate when a defendant’s liability ‘arises not out of its own conduct, but out of a
relationship that legally compels the defendant to pay for the act or omission of a third party.’”
Bank v. City of Phila., 991 F. Supp. 2d 523, 530 (E.D. Pa. 2014) (quoting Morris v. Lenihan, 192
F.R.D. 484, 489 (E.D. Pa. 2000)). The central focus of common law indemnity is the idea of
secondary liability on the part of the party seeking indemnity:
But the important point to be noted in all the cases is that secondary as distinguished
from primary liability rests upon a fault that is imputed or constructive only, being
based on some legal relation between the parties, or arising from some positive rule
of common or statutory law or because of a failure to discover or correct a defect or
remedy a dangerous condition caused by the act of the one primarily responsible.
Builders Supply Co. v. McCabe, 366 Pa. 322, 77 A.2d 368, 371 (1951). Similar to contribution,
common law indemnity is available only for liability sounding in tort, not liability based in
contract. EQT Prod. Co., 179 F. Supp. 3d at 493-94.

17

Pennsylvania courts apply two different doctrines to determine whether tort claims that
accompany contract claims are permissible as independent causes of action: the gist of the action
doctrine and the economic loss doctrine. Bohler-Uddeholm Am Inc. v. Ellwood Grp., Inc., 247
F.3d 79, 103 (3d Cir. 2001).
2. Gist of the Action Doctrine
Pursuant to Pennsylvania’s gist of the action doctrine,
an alleged tort claim against a party to a contract, based on the party’s actions
undertaken in the course of carrying out a contractual agreement, is barred when
the gist or gravamen of the cause of action stated in the complaint, although
sounding in tort, is, in actuality, a claim against the party for breach of its
contractual obligations.
Bruno v. Erie Ins. Co., 106 A.3d 48, 53 (Pa. 2014). As noted by Kawasaki, “[t]he doctrine seeks
to prevent plaintiffs from repackaging breach of contract claims as tort claims.” See EQT Prod.
Co., 179 F. Supp. 3d at 494. Accordingly, to evaluate the “gist” of claims at issue, courts look to
the nature of the duty alleged – if the duty is created by the terms of the parties’ contract, then
the claim sounds in contract, but if the duty is imposed as a matter of law by virtue of social
policy, then the claim sounds in tort. Bruno, 106 A.3d at 67. 6
3. Economic Loss Doctrine
Under Pennsylvania law, the economic loss doctrine “prohibits plaintiffs from recovering
in tort economic losses to which their entitlement flows only from contract.” Werwinski v. Ford
Motor Co., 280 F.3d 661, 671 (3d Cir. 2002) (quoting Duquesne Light Co. v. Westinghouse
Elec. Corp., 66 F.3d 604, 618 (3d Cir. 1995)). Under this doctrine, “no cause of action exists for
6

While New York courts have not explicitly adopted the gist of the action doctrine, those courts,
like Pennsylvania courts, look to the nature of the duty alleged to see if a tort claim is viable in
the presence of a contract. See Clark-Fitzpatrick, Inc. v. Long Island R. R. Co., 516 N.E. 2d 190,
193-94 (N.Y. 1987) (citations omitted) (“[A] simple breach of contract is not to be considered a
tort unless a legal duty independent of the contract itself has been violated. This legal duty must
spring from circumstances extraneous to, and not constituting elements of, the contract.”).
18

negligence that results solely in economic damages unaccompanied by physical injury or
property damage.” Sunshine v. Reassure Am. Life Ins. Co., 515 F. App’x 140, 144 (3d Cir.
2013). 7
The gist of the action and economic loss “doctrines are very closely related, and share the
common purpose of maintaining the distinction between contract and tort law.” Wilmington
Fin., Inc. v. Am. One Fin., Inc., No. 06-5559, 2007 WL 2221424, at *2 n.1 (E.D. Pa. July 31,
2007). However, they are distinct, in that the economic loss doctrine “developed in the context
of . . . products liability . . . cases where one party contracts for a product from another party and
the product malfunctions, injuring only the product itself.” Bohler-Uddeholm Am., Inc., 247
F.3d at 104 n.11. On the other hand, the gist of the action doctrine “is more applicable to nonproducts liability cases in which the key question is the ‘duty owed between the parties,’ as
opposed to the extent of the property damage.” N. H. Inc. Co. v. Dielectric Commc’ns, Inc., 872
F. Supp. 2d 458, 463 (E.D. Pa. 2012) (quoting Laura A. Wagner, Note, The Economic Loss
Doctrine: A Recommendation for the Supreme Court of Pennsyvlania, 72 U. Pitt. L. Rev. 825,
830 (2011)).
4. Discussion
The Court first addresses Kawasaki’s argument regarding UCCI’s claim for common law
indemnification asserted against it. Kawasaki persuasively argues that the Third-Party
Complaint “fails to allege any relationship between UCC and Kawasaki from which a common
law duty to indemnify could arise.” (Doc. No. 59 at 10.) The entirety of UCCI’s
indemnification allegations against Kawasaki consist of the following: “[i]f the UCC capacitors
7

Similarly, New York’s economic loss rule precludes a plaintiff from recovering in tort for
economic losses “where a product fails to perform as promised due to negligence in either the
manufacturing or installation process.” Suffolk Laundry Servs., Inc. v. Redux Corp., 238 A.D.2d
577, 578 (N.Y. App. Div. 1997).
19

failed, then the cause of any failure in the UCC capacitors is caused by the propulsion
mechanism present in the propulsion system designed by Kawasaki”; and “[w]ithout admitting
any liability, UCC asserts that, if found liable for Bombardier’s damages, such liability was
vicarious, passive and secondary and that it was the liability of Kawasaki that was the active,
primary and proximate case[sic] of Bombardier’s claimed damages.” (Doc. No. 29 ¶¶ 10, 12.)
Pursuant to the legal standards articulated above, in order for it to succeed on a common
law indemnity claim against Kawasaki, UCCI would have to prove both that Kawasaki was at
fault and that UCCI was not, and, therefore, Kawasaki’s negligence would provide a full defense
to any liability to Bombardier. However, UCCI has not articulated a scenario where it could be
held liable to Bombardier for Kawasaki’s negligence. If UCCI’s negligence contributed to the
failure of the capacitors in any way, then common law indemnity is not available to it, “as
indemnification is a method of fault shifting, not sharing.” Unique Techs., Inc. v.
Microstamping Corp., et al., No. 02-cv-6649, 2003 WL 21652284, at *3 (E.D. Pa. Apr. 15,
2003). Moreoever, if UCCI is not found negligent in the failure of the capacitors, then it would
be successful in the defense of Bombardier’s claims against it, and would therefore have no
liability for Kawasaki to indemnify. See EQT Prod. Co., 179 F. Supp. 3d at 495 (granting
motion to dismiss third-party common law indemnity claim against third-party defendant where
third-party complaint pled no special legal relationship of any kind between third-party plaintiff
and third-party defendant that would result in secondary liability to third-party plaintiff for any
harm caused by negligence of third-party defendant); Unique Techs., Inc., 2003 WL 21652284,
at *3 (concluding that third-party claim for common law indemnity failed because the defendant
would either prevail against the plaintiff or be found to have some degree of fault). 8
8

As noted above, in response to Kawasaki’s arguments about the lack of a special relationship
supporting an indemnification claim, UCCI argues that “[a]ll suppliers of a product in the chain
20

Accordingly, UCCI’s Third-Party Complaint fails to state a plausible claim for relief for
common law indemnity, as it does not plead facts allowing “the court to draw a reasonable
inference that the [third-party] defendant is liable” for such a claim. See Iqbal, 556 U.S. at 678
(internal citations omitted).
The Court next turns to Kawasaki’s argument regarding UCCI’s claim for contribution
asserted against it. Kawasaki argues that because contribution is available only between joint
tortfeasors, UCCI’s claim for contribution against it is dependent on the viability of
Bombardier’s tort claim against UCCI. (Doc. No. 59 at 5.) Kawasaki argues that Bombardier’s
negligence claim against UCCI is barred as a matter of law by the economic loss and/or gist of
the action doctrines. As noted above, UCCI argues that in the absence of discovery regarding the
basis for Bombardier’s claims against it, it is premature for the Court to make a determination as
to the potential applicability of the economic loss or gist of the action doctrines to Bombardier’s
tort claims. (Doc. No. 65 at 4.)
However, the Court need not assess whether those doctrines bar Bombardier’s tort claims
against UCCI at this juncture in order to determine that UCCI cannot maintain a viable claim for
contribution against Kawasaki. Because a claim for contribution lies between joint tortfeasors,
in order for UCCI to plead a contribution claim raising a reasonable inference of an entitlement
to relief against Kawasaki, the Court must examine the nature of the duty between Bombardier
and Kawasaki as alleged in the Third-Party Complaint. In this context, the Court finds the
district court’s reasoning in EQT Prod. Co. v. Terra Servs. LLC, 179 F. Supp. 3d 486 (W.D. Pa.

of distribution, whether a partmaker or assembler, are potentially liable in indemnification.”
(Doc. No. 65 at 8.) In support of this statement, UCCI cites Burch v. Sears, Roebuck and Co.,
467 A.2d 615 (Pa. Super. 1983); Moran v. G. & W. H. Carson, Inc., 586 A.2d 416, 428 (Pa.
Super. 1991); and Tromza v. Tecumseh Prods. Co., 378 F.2d 601, 605 (3d Cir. 1967). These
cases are distinguishable from the instant case as they involve products liability claims by injured
plaintiffs.
21

2016), instructive. In that case, the operator of a natural gas well brought a diversity action
against a contractor who designed and installed a system for handling fluids at the well site,
alleging claims of breach of contract, breach of express warranty, contractual indemnification,
and in the alternative, common law indemnification, arising out of leaks at the well site. Id. at
488-90. The design contractor asserted a third-party complaint for contribution and common law
indemnity against a contractor who excavated the site and a contractor who installed a liner at the
site. Id. at 490. In granting a motion to dismiss the third-party claims for contribution and
common law indemnification against the excavating contractor, the court found that the “gist” of
any action concerning the duties owed by the third-party defendant to the plaintiff would be
governed by the contract between the parties; accordingly, the gist of the action doctrine would
render any tort claim brought against the third-party defendant contractual in nature. Id. at 49497. Therefore, it granted the third-party defendant’s motion to dismiss the third-party claims of
contribution and indemnity. Id. at 497-98. The same analysis applies to UCCI’s contribution
and common law indemnity claims against Kawasaki.
A review of the relatively summary Third-Party Complaint filed by UCCI reveals that the
“gist” of any action that Bombardier could maintain against Kawasaki, and therefore, the “gist”
of any potential liability that Kawasaki could have to Bombardier, would be contractual.
Accordingly, it follows that Kawasaki cannot be liable to UCCI for contribution as a joint
tortfeasor. In its Third-Party Complaint, UCCI alleges that Kawasaki entered into the Kawasaki
Subcontract with Bombardier pursuant to which Bombardier would supply propulsion systems
for use in the rail cars Kawasaki was building under the Rail Car Contract. (Doc. No. 29 ¶¶ 5-6.)
It further alleges that Bombardier contracted with UCCI for the design and manufacture of
capacitors to be incorporated into the propulsion systems. (Id. ¶ 7.) The Third-Party Complaint

22

alleges that if the capacitors failed, the cause of such failure was at least in part “the propulsion
mechanism present in the propulsion system designed by Kawasaki.” (Id. ¶ 10.) If there was a
failure in the propulsion mechanism designed by Kawasaki, Kawasaki’s potential liability to
Bombardier would be determined by reference to the terms of the Kawasaki Subcontract. The
Third-Party Complaint offers no allegations supporting a reasonable inference that Kawasaki’s
potential liability to Bombardier would be governed by any duty other than that owed by virtue
of the Kawasaki Subcontract. See EQT Prod. Co., 179 F. Supp. 3d at 497; Higgins Erectors &
Haulers, Inc. v. E.E. Austin & Son, Inc., 714 F. Supp. 756, 759 (W.D. Pa. 1989) (dismissing
fifth-party complaint where although “couched in negligence terms, it is actually based upon an
alleged breach by [Fifth-Party Defendant] of its contract with [Third-Party Defendant]”); Bruno,
106 A.3d at 69 (determining gist of claims according to the origin of the duty at issue). 9 Because
Kawasaki’s only potential liability to Bombardier is contractual, it cannot be held liable to UCCI
for contribution as a joint tortfeasor. Therefore, Kawasaki’s motion to dismiss UCCI’s ThirdParty claims against it will be granted.

9

The Court is not persuaded by UCCI’s argument that a determination of the applicability of the
gist of the action doctrine must await discovery, as
[t]he gist of the action test requires the court to determine from the complaint the
essential nature of the claim alleged by distinguishing between contract and tort
claims on the basis of source of the duties allegedly breached; if the claim
essentially alleges a breach of duties that flow from an agreement between the
parties, the claim is contractual in nature, whereas if the duties allegedly breached
were of a type imposed on members of society as a matter of social policy, the
claim is essentially tort-based.
Good v. Am. Heritage Life Ins. Co., No. 02-cv-3725, 2002 WL 31385820, at *2 (E.D. Pa. Sept.
26, 2002) (emphasis added).
23

IV. CONCLUSION
For the foregoing reasons, the Court will grant Third-Party Defendant NYCTA’s motion
to dismiss, and grant Third-Party Defendant Kawasaki’s motion to dismiss. An Order consistent
with this Memorandum follows.

24