Guerrero et al v. PT.Multistrada Arah Sarana, TBK et al

Filing 28

ORDER denying 7 Motion to Dismiss; denying 9 Motion to Dismiss.(Signed by Judge Hilda G Tagle) Parties notified.(mserpa, 2)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
REYNALDO GUERRERO, et al,
Plaintiffs,
VS.
PT.MULTISTRADA ARAH SARANA,
TBK, et al,
Defendants.

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October 30, 2015
David J. Bradley, Clerk

CIVIL NO. 2:15-CV-152

ORDER
BE IT REMEMBERED that on October 30, 2015, the Court DENIED
Defendant American Tire Distributors, Inc.’s Motion to Dismiss and DENIED
Defendants Itochu International, Inc. and ITR USA, Inc.’s Motion to Dismiss.

I.

Background
On March 31, 2015, Reynaldo Guerrero and Amado Iglesias (collectively

“Plaintiffs”) filed a complaint against PT. Multistrada Arah Sarana, TBK (“MASA”),
American Tire Distributors, Inc. (“American Tire”), Itochu Corporation (“Itochu”),
Itochu International, Inc. (“Itochu International”), and ITR USA, Inc. d/b/a Itochu
Tire America (“ITR USA”). Compl., Dkt. No. 1. The case arises from a defective
automobile tire that resulted in a collision that injured both Plaintiffs. Compl., Dkt.
No. 1 at 7–8. The complaint alleges liability for all four Defendants under theories
of strict liability, negligence, breach of express warranty, breach of implied
warranty of merchantability, and violations of the Texas Deceptive Trade Practices
Act (DTPA). Compl., Dkt. No. 1 at 8–27.
On April 30, 2015, MASA filed an answer to Plaintiffs’ complaint. MASA’s
Answer, Dkt. No. 5. American Tire filed a motion to dismiss pursuant to Federal
Rule of Civil Procedure 12(b)(6) on May 5, 2015. Dkt. No. 7. Itochu International
and ITR USA filed a motion to dismiss on May 5, 2015.

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Dkt. No. 9.

Itochu

International, ITR USA, and American Tire’s (collectively “Movants”) motions to
dismiss are identical in substance, so the Court will analyze them together.
Movants also filed answers on May 5, 2015. Dkt. Nos. 8, 10, 11.
Plaintiffs filed a response to the two motions to dismiss on May 18, 2015.
Dkt. No. 12. Itochu International and ITR USA filed a supplemental motion to
dismiss on June 24, 2015. Dkt. No. 17. American Tire filed a supplemental motion
to dismiss on June 24, 2015. Dkt. No. 18. None of the Movants sought leave to file
the supplemental motion.

Nonetheless, the Court will consider the motions as

replies to Plaintiffs’ response.
On September 16, 2015, Judge Nelva Gonzales Ramos recused herself from
the case. Dkt. No. 21. The case was then reassigned to this Court. Dkt. No. 22. On
October 16, 2015, MASA filed a counterclaim against Amado Iglesias (“Iglesias”) in
which it claimed that all injuries and damages alleged by Plaintiff Reynaldo
Guerrero (“Guerrero”) were the result of negligent acts and/or omissions of Iglesias.
Countercl. Dkt. No. 24 at 1. American Tire, Itochu, Itochu International, and ITR
USA filed a notice joining the counterclaim. Dkt. No. 25. On October 16, 2015,
MASA also filed a Motion for Leave to Designate Wood Group PSN as a Responsible
Third Party. Dkt. No. 26. The Court does not consider this motion here because
Plaintiffs have not yet had the opportunity to respond. The Court only considers
Movants’ motions to dismiss.

II.

Legal Standard
Federal Rule of Civil Procedure 12(b)(6) states that a plaintiff’s claim may be

dismissed it if fails “to state a claim upon which relief can be granted.” Fed. R. Civ.
P. 12(b)(6).

For a complaint to be sufficient, it “requires more than labels and

conclusions, and a formulaic recitation of the elements of a cause of action . . . .”

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “A complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550
U.S. at 570).

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“A claim has facial plausibility when the plaintiff pleads factual

content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556).
In evaluating a plaintiff’s complaint in light of a defendant’s motion to
dismiss under Rule 12(b)(6), a court may “begin by identifying pleadings that,
because they are no more than conclusions, are not entitled to the assumption of
truth.” Id. at 679. Then the court may determine whether the plaintiff’s wellpleaded facts allow the court to infer the plausibility of misconduct.

See id.

“Factual allegations must be enough to raise a right to relief above a speculative
level on the assumption that all the allegations in the complaint are true (even if
doubtful in fact).” Twombly, 550 U.S. at 555 (internal citations omitted).

III.

Analysis
Movants seek dismissal under Federal Rule of Procedure 12(b)(6). Dkt. Nos.

7, 9.

This Court has diversity jurisdiction over this case under 28 U.S.C. §

1332(a)(2). Compl., Dkt. No. 1 at 3–4. This Court will therefore apply substantive
Texas state law. See Van Dusen v. Barrack, 376 U.S. 612, 637 (1964) (“[F]ederal
courts in diversity of citizenship cases are to apply the laws ‘of the states in which
they sit.’ ”) (citing Griffin v. McCoach, 313 U.S. 498, 503 (1941)).
Section 82 governs all products liability actions in Texas. Tex. Civ. Prac. &
Rem. Code. Ann. § 82 (West 2015). “Products liability action” is defined broadly
under the statute and includes actions “based in strict tort liability, strict products
liability, negligence, misrepresentation, breach of express or implied warranty, or
any other theory or combination of theories.”

§ 82.001.

Section 82.033 grants

immunity to nonmanufacturing sellers in products liability actions but provides the
following seven exceptions:
(a) A seller that did not manufacture a product is not liable for harm caused
to the claimant by that product unless the claimant proves:
(1) that the seller participated in the design of the product;
(2) that the seller altered or modified the product and the claimant’s
harm resulted from that alteration or modification;

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(3) that the seller installed the product, or had the product installed,
on another product and the claimant’s harm resulted from the
product’s installation onto the assembled product;
(4) that:
(A) the seller exercised substantial control over the content of a
warning or instruction that accompanied the product;
(B) the warning or instruction was inadequate; and
(C) the claimant’s harm resulted from the inadequacy of the
warning or instruction;
(5) that:
(A) the seller made an express factual representation about an
aspect of the product;
(B) the representation was incorrect;
(C) the claimant relied on the representation in obtaining or
using the product; and
(D) if the aspect of the product had been as represented, the
claimant would not have been harmed by the product or would
not have suffered the same degree of harm;
(6) that:
(A) the seller actually knew of a defect to the product at the time
the seller supplied the product; and
(B) the claimant’s harm resulted from the defect; or
(7) that the manufacturer of the product is:
(A) insolvent; or
(B) not subject to the jurisdiction of the court.
§ 82.003.

The purpose of Chapter 82 is “to protect innocent sellers” and place

primary liability on manufacturers that “are usually in a better position to
recognize and remedy product defects.” Mix v. Target Corp., 759 F. Supp. 2d 876,
879 (W.D. Tex. 2010).

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Under this provision, plaintiffs have the burden to prove that one of the
exceptions apply. See § 82.003(a) (“[A] seller that did not manufacture a product is
not liable for harm caused by that product unless the claimant proves [one of the
seven exceptions].”). At the motion to dismiss stage, the court examines only the
face of the complaint to determine whether there exists a reasonable inference that
the defendant is liable. Twombly, 550 U.S. at 556. Plaintiffs’ claims do not need to
cite with specificity any of the seven exceptions, as long as their claim fairly states
any one or more of the exceptions. Casas v. The Tire Corral, Inc., No. M-04-123,
2005 WL 6773889, at *3 (S.D. Tex. Mar. 31, 2005).
Movants state that Plaintiffs have not alleged that they are manufacturers of
the tire in question; rather, they are nonmanufacturing sellers entitled to immunity
under § 82.003(a). Dkt. No. 7 at ¶¶ 6–7; Dkt. No. 9 at ¶¶ 6–7. Movants state that
MASA is the alleged manufacturer of the tire, and it subjected itself to the Court’s
jurisdiction by filing an answer. Dkt. No. 7, ¶ 6; Dkt. No. 9, ¶ 6. Movants argue
that because MASA is the manufacturer and is subject to the Court’s jurisdiction,
none of the exceptions apply. Dkt. No. 7, ¶ 7, Dkt. No. 9, ¶ 7.
In response, Plaintiffs acknowledge that the tire in question was
manufactured by MASA, Dkt. No. 12, ¶ 6, and that the Movants are
nonmanufacturing sellers, Dkt. No. 12, ¶ 8.

Plaintiffs argue that Movants fall

under one of the seven exceptions under § 82.003.

Focusing on § 82.003(a)(7),

Plaintiffs contest that MASA’s answer did not mean it was subject to the Court’s
jurisdiction. Dkt. No. 12, ¶ 1. In their supplemental motions, Movants state that
MASA conceded that the Court’s jurisdiction in the joint discovery/case
management plan.

Dkt. No. 17, ¶ 3; Dkt. No. 18, ¶ 3.

Indeed, in the joint

discovery/case management plan, MASA states, “Defendant MASA does not contest
personal jurisdiction in this case based on the facts and circumstances of this case.”
Dkt. No. 14 at 2–3. The parties also are in agreement that the Court has diversity
jurisdiction.

Dkt. No. 14 at 3.

Accordingly, the Court finds that Plaintiffs’

argument concerning MASA’s personal jurisdiction is moot.

Therefore, the

exception to nonmanufacturing seller immunity under § 82.003(a)(7) does not apply.

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Nevertheless, as Plaintiffs note in their response, six of the other exceptions
in § 82.003 may apply such that Movants may be held liable. Plaintiffs state that
they have reason to believe that § 82.003(a)(4)–(6) may apply, as well as other the
other three exceptions.

Dkt. No. 12 at 10–11.

Plaintiffs request a reasonable

opportunity to conduct discovery to determine whether an exception applies. Dkt.
No. 12 at 10–11.
The Court finds that Plaintiffs have sufficiently alleged that Movants may
fall under one of the exceptions. At this stage in the litigation, Plaintiffs need only
allege enough facts in support of their legal conclusions to give rise to a reasonable
inference that Movants are liable. Twombly, 550 U.S. at 556. Plaintiffs’ allegations
must fairly state that Movants fall under one of the exceptions, even if Plaintiffs do
not explicitly cite to the exceptions.

In their complaint, Plaintiffs state that

American Tire, Itochu International, and ITR USA “represented, via the printing on
the sidewall, that said tire was comprised of two nylon plies” and that the
representation “was false in that said tire only comprised of one nylon ply.” Compl.,
Dkt. No. 1, ¶¶ 55, 61, 67. The Court reads these claims as sufficiently alleging that
Movants may be liable under § 82.003(a)(4)–(6). Further, Plaintiffs’ claims under
the DTPA sufficiently allege Movants’ liability under § 82.003(a)(4)–(6). Compl.,
Dkt. No. 1, ¶¶ 57, 63, 69.
The three remaining exceptions impose liability when the seller participated
in the design of the product; altered or modified the product; or installed the
product, and the harm resulted from the product’s installation. § 82.003(a)(1)–(3).
In their response, Plaintiffs do not specifically argue that these three exceptions
may apply; rather, they request a reasonable opportunity to conduct discovery to
determine if they do apply. Plaintiffs’ complaint does not contain any allegations
that Movants designed the tire in question, altered or modified it, or installed it.
Thus, the Court finds that Plaintiffs’ complaint gives rise to a plausible claim that
Movants fall under one of the exceptions stated in § 82.003(a)(4)–(6).

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IV.

Conclusion
Accordingly, the Court DENIES American Tire’s Motion to Dismiss, Dkt. No.

7. The Court also DENIES Itochu International and ITR USA’s Motion to Dismiss,
Dkt. No. 9.
SIGNED this 30th day of October, 2015.

___________________________________
Hilda Tagle
Senior United States District Judge

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