Shoals Technologies Group, LLC v. Prysmian Cables and Systems USA, LLC
Filing
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MEMORANDUM OPINION OF THE COURT. Signed by Chief Judge William L. Campbell, Jr on 05/09/24. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(ad)
IN THE UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
SHOALS TECHNOLOGIES
GROUP, LLC
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Plaintiff,
v.
PRYSMIAN CABLES AND
SYSTEMS USA, LLC
Defendant.
NO. 3:23-cv-01153
JUDGE CAMPBELL
MAGISTRATE JUDGE HOLMES
MEMORANDUM
Defendant Prysmian Cables and Systems USA, LLC (“Prysmian”) manufactures specialty
wire. Plaintiff Shoals Technologies Group, LLC (“Shoals”) has purchased what the parties refer
to as “Prysmian red wire” from Prysmian since approximately 2014 or 2015. Shoals claims the
Prysmian red wire purchased between 2020 and approximately 2022 is defective. Shoals brings
claims against Prysmian to recover damages on a number of product liability and breach of
warranty theories, and for breach of contract, unjust enrichment, indemnity, intentional
misrepresentation, negligence, and gross negligence. Prysmian filed counterclaims for breach of
contract and defamation and seeks declaratory judgment on what appear to be all of the legal and
factual issues in this case. (Doc. No. 21).
Before the Court are Prysmian’s Motion to Dismiss (Doc. No. 17) and Shoals’ Motion to
Dismiss Defendants’ Counterclaim (Doc. No. 32). The motions are fully briefed and ripe for
review. (See Doc. Nos. 18, 30, 33, 34, 38, 40).
For the reasons stated herein, both motions to dismiss will be DENIED.
I.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) permits dismissal of a complaint for failure to
state a claim upon which relief can be granted. For purposes of a motion to dismiss, a court must
take all of the factual allegations in the complaint as true. Ashcroft v. Iqbal, 556 U.S. 662 (2009).
To survive a motion to dismiss, a complaint must contain sufficient factual allegations, accepted
as true, to state a claim for relief that is plausible on its face. Id. at 678. A claim has facial
plausibility when the plaintiff pleads facts that allow the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged. Id. In reviewing a motion to dismiss, the
Court construes the complaint in the light most favorable to the plaintiff, accepts its allegations as
true, and draws all reasonable inferences in favor of the plaintiff. Directv, Inc. v. Treesh, 487 F.3d
471, 476 (6th Cir. 2007). Thus, dismissal is appropriate only if “it appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”
Guzman v. U.S. Dep’t of Children’s Servs., 679 F.3d 425, 429 (6th Cir. 2012). In considering a
Rule 12(b)(6) motion, the Court may consider the complaint and any exhibits attached thereto,
public records, items appearing in the record of the case, and exhibits attached to a defendant’s
motion to dismiss provided they are referred to in the Complaint and are central to the claims.
Bassett v. National Collegiate Athletic Assn., 528 F.3d 426, 430 (6th Cir. 2008).
II.
ANALYSIS
A. Failure to State a Claim
Prysmian argues that all of Shoals’ claims fail because they do not allege that Prysmian
breached the applicable terms and conditions or that the product fails to meet applicable industry
standards. The emphasis on “applicable” is Prysmian’s own. Prysmian’s argument is not that
Shoals fails to identify the terms and conditions that it alleges govern the parties’ relationship, but
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that the terms and conditions Shoals identifies did not actually apply. Similarly, Prysmian’s
argument is not that Shoals failed to allege the product fails to meet industry standards, but that
the industry standards Shoals identifies do not govern the alleged defect or wires at issue.
The Court cannot make such merits determinations at this early stage in the litigation.
Having reviewed the Complaint and the parties’ arguments, the Court finds that the Complaint
states claims upon which relief may be granted.
B. Tort Claims
Prysmian next argues Shoals’ tort claims should be dismissed pursuant to the economic
loss rule because “Shoals does not allege that it suffered any damage apart from damage to the
allegedly defective wire itself” or “damages independent of those allegedly suffered due to
Prysmian’s alleged breach of contract.” (Doc. No. 18 at 11-12). The Complaint alleges other
property was or will be damaged by the defective wire. (See Compl., Doc. No. 1 ¶¶ 170, 178, 185).
At this stage of the case, these allegations are sufficient to state a claim for relief under the tort
theories.
C. Unjust Enrichment
Prysmian contends Shoals’ alternative claim for unjust enrichment must be dismissed
because an express contract governs the claims. (Id. at 12). Prysmian is correct that Shoals cannot
recover on both a breach of contract and an unjust enrichment theory. See McCarthy v. Ameritech
Pub., Inc., 763 F.3d 469, 487 (6th Cir. 2014). However, a plaintiff may plead alternative theories.
See Solo v. United Parcel Service Co., 819 F.3d 788, 796 (6th Cir. 2016) (“Rule 8(a)(3) permits
pleadings in the alternative ‘when, for instance, there is a dispute between the parties as to whether
an express agreement exists.’” (quoting Bowlers’ Alley, Inc. v. Cincinnati Ins. Co., 32 F. Supp. 3d
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824, 833-34 (E.D. Mich. 2014)). Accordingly, the motion to dismiss the unjust enrichment claim
will be denied.
D. Punitive Damages
Prysmian also seeks dismissal of the remedy of punitive damages. At this juncture, the
Court cannot determine the appropriate remedies and Plaintiff has pleaded claims that, if
successful, could serve as the basis for recovery of punitive damages. Accordingly, dismissal of
the remedy of punitive damages is not appropriate at this time.
E. Defamation Counterclaim
Shoals seeks dismissal of Prysmian’s defamation counterclaim based on various privilege
assertions, which it puts forward as affirmative defenses to that claim. (Doc. No. 33; see also,
Answer to Counterclaim, Doc. No. 31). Shoals also contends that Prysmian has failed to allege
facts to satisfy the basic elements of a defamation claim. (Id.).
In Tennessee, a claim for defamation must allege that “(1) a party published a statement;
(2) with knowledge that the statement was false and demeaning to the other; or (3) with reckless
disregard for the truth of the statement or with negligence in failing to ascertain the truth of the
statement.” Sullivan v. Baptist Memorial Hospital, 995 S.W.2d 569, 571 (Tenn. 1999). Prysmian
alleges that Shoals knowingly made untrue statements concerning Prysmian’s wire. (See
Counterclaim, Doc. No. 21 ¶¶ 43-45). Accepting these allegations as true, as the Court must at this
stage, Prysmian alleges a claim for defamation.
Similarly, it is too early to determine whether the various affirmative defenses raised by
Shoals foreclose the defamation claim. Generally, a plaintiff need not plead lack of affirmative
defenses to survive a motion to dismiss. Cataldo v. U.S. Steel Corp., 676 F.3d 542, 547 (6th Cir.
2012). However, if the complaint “contains facts which satisfy the elements of the defendant’s
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affirmative defense, the district court may apply the affirmative defense.” Estate of Barney v. PNC
Bank, Nat’l Assn., 714 F.3d 920, 926 (6th Cir. 2013). Here, the applicability of Shoals’ affirmative
defenses cannot be established from the allegations in the Counterclaim. Accordingly, the motion
to dismiss the defamation claim based on affirmative defenses will be denied.
III.
CONCLUSION
For the reasons stated, Prysmian’s motion to dismiss (Doc. No. 17) will be DENIED, and
Shoals’ motion to dismiss the counterclaim (Doc. No. 32) will also be DENIED.
An appropriate Order will enter.
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WILLIAM L. CAMPBELL, JR.
CHIEF UNITED STATES DISTRICT JUDGE
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