Kerns et al v. Range Resources - Appalachia, LLC

Filing 44

MEMORANDUM OPINION and ORDER denying Plaintiffs' Motion to Amend Complaint 35 , Denying Plaintiffs' Motion to Amend or Alter Order 36 and Dismissing Case Without Prejudice. Signed by District Judge Irene M. Keeley on 8/23/11. (mh)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
RALPH O. KERNS and
MARY JANE KERNS,
Plaintiffs,
v.

//

CIVIL ACTION NO. 1:10CV23
(Judge Keeley)

RANGE RESOURCES - APPALACHIA, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
I.

INTRODUCTION

Pending before the Court are the motions of the plaintiffs,
Ralph

O.

Kerns

and

Mary

Jane

Kerns

(collectively,

“the

plaintiffs”), to amend their complaint and to amend or alter the
Court’s order granting the motion to dismiss of the defendant,
Range Resources Appalachia, LLC (“Range”).

For the reasons that

follow, the Court DENIES the plaintiffs’ motions (dkt. nos. 35, 36)
and DISMISSES this case WITHOUT PREJUDICE.
II.

FACTUAL BACKGROUND

The Court discussed the factual background of this case in
detail in a prior order.

See Kerns v. Range Resources-Appalachia,

LLC, No. 1:10CV23, 2011 WL 197908, at *1-*2 (N.D.W. Va. Jan. 18,
2011) (unpublished). In brief summary, the plaintiffs allege that
they are the owners of surface rights and oil, gas, and other

KERNS, ET AL. V. RANGE RESOURCES

1:10CV23

MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
mineral rights, in Monongalia County, West Virginia. They contend
that, in the fall of 2008, representatives from Range approached
them to discuss the possible leasing of their gas reserves, and
that Range’s representatives presented them with various documents,
some of which constituted offers from Range that they accepted.
According to the plaintiffs, these offers formed a contract that
Range later breached, causing them various economic damages.
III.

PROCEDURAL HISTORY

On January 18, 2011, the Court granted Range’s motion to
dismiss the plaintiffs’ first complaint, which included claims for
1) breach of contract, 2) breach of the covenant of good faith and
fair

dealing,

3)

fraudulent

misrepresentation,

4)

negligent

misrepresentation, and 5) punitive damages.
The first complaint alleged that, in the early fall of 2008,
after Range presented them with a “Dear Property Owner” letter
(“the DPO letter”), the plaintiffs signed the DOP letter on
September 5, 2008 and returned it to Range. By signing the DPO
letter, the plaintiffs believed they had presented an offer to
Range, to which Range responded in a letter dated November 11, 2008
(“the November 11th letter”). Although that letter rejected the
plaintiffs’ offer, it stated that Range was open to an alternative
2

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
bargain. The first complaint alleged that the plaintiffs signed the
November 11th letter and returned it to Range in the belief that
they

had

formed

a

binding

contract

with

Range.

Range

has

consistently denied forming any contract with the plaintiffs.
Since the inception of this case, the plaintiffs have rested
their breach of contract claim entirely on the contention that the
November 11th letter was an “offer” from Range that they accepted.
In its previous Order, the Court concluded that the November 11th
letter was not an offer as it contained no definitive promises or
obligations from Range, fundamental components of any offer.

Id.

While the Court was considering Range’s motion to dismiss, the
plaintiffs moved to file an amended complaint. Because that motion
was pending when it dismissed the plaintiffs’ first complaint, the
Court directed the Clerk not to enter judgment until it ruled on
the motion to amend. Before it could do so, however, the plaintiffs
moved for leave to file a second amended complaint (dkt. no. 35),
and also moved to alter or amend the Order granting Range’s motion
to dismiss (dkt. no. 36).

In light of the filing of this second

motion to amend, the Court denied as moot the plaintiffs’ first
motion to amend (dkt. no. 38).

3

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
IV.
A.

DISCUSSION

Plaintiffs’ Motion to Alter the Court’s Prior Order
Although the plaintiffs filed their motion to alter or amend

the Court’s prior Order granting Range’s motion to dismiss pursuant
to Fed. R. Civ. P. 59(e), Range has correctly observed that the
plaintiffs’ reliance on Fed. R. Civ. P. 59(e) is premature. Because
the Court has not yet entered judgment, the plaintiffs’ motion is
more properly cast as one for reconsideration pursuant Fed. R. Civ.
P. 54(b).
The plaintiffs complain that the Court’s prior Order placed
too much emphasis on the phrase “would consider” as it appears in
the November 11th letter. They also contend that the Court failed
to adequately address additional terms in that letter, including
“proposal,” “offer,” and “alternative.”

They argue that the

Court’s conclusion that the letter is unambiguous was erroneous. In
their

view,

Range

used

these

terms

inconsistently

in

its

correspondence, thus raising factual questions that need to be
resolved by a jury.1 Finally, they argue that the holding in
1

Before the Court granted Range’s motion to dismiss, the
plaintiffs had contended that the November 11th letter was
unambiguous. See Pls.’ Resp. in Opp. to Def.’s M.T.D. at 12 (dkt.
no. 14) (“The [plaintiffs] contend that the ‘alternative
counterproposal offer’ made by Range [in the November 11th letter]
4

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
Fleming Co. Of Nebraska, Inc. v. Michals, 230 Neb. 753, 433 N.W.2d
505 (Neb. 1988), a case cited by the Court, is inapposite because
it involved communications between lawyers, not laypersons, as is
the case here.
The November 11th letter is not ambiguous. See Kerns, 2011 WL
197908, at *4 (holding that “the November 11th letter is an
unambiguous writing ripe for applying the plain and ordinary
meaning of its terms”). Furthermore, the Court did not err when it
cited Fleming for the basic proposition of contract law that, to
constitute an offer, a communication must contain a definitive
promise signaling that assent to its terms will conclude the
bargain.

That Fleming involved an exchange of letters between

lawyers is of no legal consequence to the analysis here.
When it granted Range’s motion to dismiss, in addition to
Fleming, the Court noted that Range’s November 11th letter could
not constitute an offer because it lacked any definitive promises
from Range. In seeking reconsideration, the plaintiffs ignore the

is unambiguous[.]”). Now, they argue that the November 11th letter
is ambiguous. See Pls.’ Reply to Def.’s Opp. to Pls.’ M. Amend.
Order at 4 (dkt. no. 41) (“[A]t the heart of the [plaintiffs’]
argument is that the Letter from Range to the [plaintiffs] . . .[,]
at a minimum, was so ambiguous as to present a question of fact for
a jury.” (emphasis in original)).
5

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
absence of such promises and fail to recognize that the mere use of
the

words

“offer”

and

“proposal”

is

not

dispositive;

inclusion, standing alone, cannot generate a promise.
v. FDIC, 42 F.3d 704, 709 (1st Cir. 1994).
official

commentary

to

the

Second

their

See Borque

Moreover, as the

Restatement

of

Contracts

recognizes, when a party such as Range uses words of reservation
like “would consider” in a communication, such language generally
will

not

constitute

an

offer.

See

Restatement

(Second)

of

Contracts § 26, cmt. d. (1981) (emphasis added).
Thus, despite including words such as “proposal” and “offer,”
Range’s November 11th letter contained no promises. At most, words
such as “offered” to “consider” served only to continue the
parties’ negotiations, not to create an offer.
B.

Plaintiffs’ Motion for Leave to File Second Amended Complaint
The plaintiffs seek to add Range’s parent company, Range

Resources Corporation, as a defendant, and to plead claims for 1)
breach of a contract formed by the DPO letter, 2) breach of a
contract

formed

by

the

November

11th

letter,

3)

specific

performance of any contract the parties formed, 4) violations of
the West Virginia Antitrust Act (“WVATA”), 5) violations of the
Sherman Antitrust Act, 6) fraud and civil conspiracy, 7) tortious
6

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
interference

with

misrepresentation.

prospective

contract,

and

8)

negligent

Range opposes the motion on the grounds that

the plaintiffs filed it with “undue delay,” and in “bad faith,” and
also because the amendment would be futile.
Pursuant to Fed. R. Civ. P. 15, a party seeking to amend a
pleading under circumstances such as those here, “may amend its
pleading only with the opposing party's written consent or the
court's leave.”

Fed. R. Civ. P. 15(a)(2).

granted freely “when justice so requires.”

Such leave should be
Id.

Such a motion may

be denied, however, when a plaintiff moves to amend with undue
delay, in bad faith, or when allowing the amendment would be
futile.

See Glaser v. Enzo Biochem, Inc., 464 F.3d 474, 480 (4th

Cir. 2006) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).
Nevertheless, a district court should deny leave to amend on the
basis of futility only “when the proposed amendment is clearly
insufficient or frivolous on its face.”

Johnson v. Oroweat Foods

Co., 785 F.2d 503, 510 (4th Cir. 1986).
As discussed below, the Court concludes that each of the
plaintiffs’ proposed amendments is clearly insufficient on its face
and would not survive a motion to dismiss brought under Fed. R.
Civ.

P.

12(b)(6).

It

therefore

7

need

not

decide

whether

the

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1:10CV23

MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
plaintiffs filed their motion to amend with undue delay or in bad
faith.
1.

Claim for Breach of the “Dear Property Owner” Contract

The fundamental contract theory articulated in the plaintiffs’
first complaint was that they had submitted an offer to Range when
they signed and returned the DPO letter, and that Range’s response
in the November 11th letter constituted a counteroffer. See Compl.
at 2 (dkt. no. 8-3). In their proposed second amended complaint,
however, the plaintiffs assert that they received an offer from
Range in the DPO letter.

They candidly admit that this change is

an attempt to model their allegations after those pled in the cases
of Backwater Properties, LLC, et al. v. Range Resources-Appalachia,
LLC, et al., 2011-1 Trade Cases P 77,479, 2011 WL 1706521 (N.D.W.
Va. May 5, 2011); and Windstar Holdings LLC v. Range Resources
Corporation, et al., No. 1:10CV204, 2011 WL 2709849 (N.D.W. Va.
July 12, 2011) (unpublished).

Critically, however, the contract

theories advanced in those two cases rested on alleged oral
representations of Range’s landmen, coupled with the presentation
of documents, including the DPO letters, that the plaintiffs claim
presented actual and definitive offers.

Here, by contrast, the

plaintiffs have never alleged that Range’s oral representations
8

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
formed part of any offers they received.

Count One of their

proposed amended complaint, for example, alleges only that the
offer the plaintiffs received took the form of the DPO letter
itself.
While the proposed amended complaint generally alleges that
the plaintiffs relied on representations by Range and its employees
when they accepted and signed a form lease, it never alleges that
such representations constituted or formed a part of any offers
from

Range.

It

also

fails

representations made by Range.

to

allege

any

specific

oral

These failures are fatal to any

contract claim based on the DPO letter, which
stating that Range’s assent to finalizing any

contains provisions
deal was “subject

to: 1) approval of title, and 2) management approval of the
lease.”2

DPO Letter at 1 (dkt. no. 8-3).

2

Although the plaintiffs reference the DPO and November 11th
letters and purport to attach the DPO letter as an exhibit to their
proposed second amended complaint, they did not actually attach
these documents. They did, however, attach them to their first
complaint. Given their express reliance on, and reference to, the
DPO and November 11th letters, the Court may consider them without
looking beyond their pleadings.
See Clark v. BASF Salaried
Employees' Pension Plan, 329 F. Supp.2d 694, 699 (W.D.N.C. 2004)
(recognizing that, when ruling on a motion to dismiss, a district
court may consider a document incorporated by reference in a
plaintiff’s complaint, or a document the plaintiff relies on in the
complaint that is “‘central to the plaintiff’s claim.’” (quoting
GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381,
9

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
To rely on the DPO letter as an offer, the plaintiffs must
plead that they were justified “in understanding that [their]
assent”

to

conclude”

the
a

DPO

bargain

letter’s
between

terms
the

was

“invited

parties.

See

and

[would]

Verizon

West

Virginia, Inc. v. West Virginia Bureau of Employment Programs, 586
S.E.2d 170, 205 n.11 (W. Va. 2003) (Davis, J., dissenting) (quoting
National

Educ.

Association-Rhode

Island

by

Scigulinsky

v.

Retirement Bd. of Rhode Island Employees’ Retirement System, 890 F.
Supp. 1143, 1157 (D.R.I. 1995) (quoting Restatement (Second) of
Contracts, § 24 (1981) (internal quotation marks omitted)).
Nowhere, however, does the plaintiffs’ proposed second amended
complaint allege that Range had already satisfied the DPO letter’s
express

requirements

of

“management

approval”

or

“title

verification” when the plaintiffs signed it, or, indeed, that the
plaintiffs relied on oral representations that led them to believe
such requirements were mere formalities. Given this language in the
DPO letter, and their failure to allege that oral representations
constituted part of the offers they received, the plaintiffs have
not stated a plausible claim for breach of contract.

Accord

1384 (10th Cir. 1997)), aff'd as modified sub nom Clark v. BASF
Corp., 142 Fed. Appx. 659, 661 (4th Cir. 2005).
10

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
Hollingsworth v. Range Resources-Appalachia, LLC, No. 3:09CV838,
2009 WL 3601586, at *4 (M.D. Pa. Oct. 28, 2009) (unpublished)
(holding that the plaintiffs failed to state a plausible breach of
contract claim based on their signing of a DPO letter because the
letter was subject to further review and approval by Range); Lyco
Better Homes inc. v. Range Resources - Appalachia, LLC, No.
4:09CV249, 2009 U.S. Dist. LEXIS 110425 (M.D. Pa. May 21, 2009)
(unpublished) (holding that the plaintiff made an offer to Range
when it signed and returned an identical DPO letter). Accordingly,
granting the plaintiffs leave to amend their complaint to pursue
this contract claim would be futile.
2.

Claim for Breach of the November 11th Contract

As an alternative theory, the plaintiffs’ proposed second
amended complaint pleads that the plaintiffs accepted an offer from
Range when they signed and returned the November 11th letter.
However, as the Court discussed in its earlier Order granting
Range’s motion to dismiss (dkt. no. 34), as a matter of law this
letter could not constitute an offer from Range. See Kerns, 2011 WL
197908, at *3-*5. Accordingly, it would be futile to grant the

11

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
plaintiffs leave to file an amended complaint in reliance on such
a theory.3
3.

Claim for Specific Performance

Because

the

plaintiffs’

proposed

claim

for

specific

performance rests on the existence of a contract, their failure to
plead a plausible contract claim necessarily dooms any claim for
specific performance.
4.

Federal and State Antitrust Claims

The plaintiffs also seek to add claims under the WVATA and the
Sherman Antitrust Act. Specifically, under the WVATA, they allege
a claim for Range’s entry into a combination or conspiracy to
restrain trade in violation of W. Va. Code § 47-18-3, and for its
attempt to maintain or establish a monopoly of trade or commerce in
violation of W. Va. Code § 47-18-4. These claims correspond to the
plaintiffs’ claims under Sections 1 and 2 of the Sherman Antitrust
Act, the main difference being that the Sherman Act forbids

3

Although the plaintiffs also assert that they are entitled
to relief on both contract claims under theories of “detrimental
reliance” and “promissory estoppel,” they fail to support these
alternative theories with adequate factual allegations. To state
a claim for “promissory estoppel,” a plaintiff must establish that
he reasonably relied on a promise to his detriment. See Syl. Pt.
The plaintiffs,
3, Everett v. Brown, 321 S.E.2d 685 (1984).
however, fail to establish that Range promised them anything.
12

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
restraints on trade affecting interstate commerce, while the WVATA
forbids restraints on trade within West Virginia.

See Kessel, 648

S.E.2d at 375.
a.

Combination or Conspiracy to Restrain Trade

The Supreme Court of Appeals of West Virginia has clarified
that courts should analyze the WVATA “under the guidance provided
by federal law.”

Kessel v. Monongalia County General Hosp. Co.,

220 W. Va. 602, 617, 648 S.E.2d 366, 381 (W. Va. 2007); see also W.
Va. Code § 47-18-16.

Accordingly, the adequacy of the plaintiffs’

WVATA claim rises or falls on the viability of their federal
antitrust claims.
To state a claim under 15 U.S.C. § 1, a plaintiff must
establish the following two elements: “(1) an agreement between at
least two legally distinct persons or entities; and (2) that the
agreement imposed an unreasonable restraint on trade.”

Patel v.

Scotland Memorial Hosp., 91 F.3d 132, 1996 WL 38920, at *2 (4th
Cir. 1996) (table case) (citing Estate Constr. Co. v. Miller &
Smith Holding Co., 14 F.3d 213, 220-21 (4th Cir. 1994)). Satisfying
the first element “requires evidence of a relationship between at
least two legally distinct persons or entities.”

Oksanen v. Page

Memorial Hosp., 945 F.2d 696, 702 (4th Cir. 1991).
13

Within this

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
context, a “parent and subsidiary are treated as a single firm.”
Harvird Oil Co., Inc. v. Marathon Oil Co., Inc., 149 F.3d 283, 292
(4th Cir. 1998) (citing Copperweld Corp. v. Independence Tube
Corp., 467 U.S. 752, 771-77 (1984)).
The plaintiffs’ proposed second amended complaint alleges that
Range is a wholly owned subsidiary of Range Resources Corporation,
and that Range’s actions were controlled and influenced by its
parent. Aside from these allegations, they never assert that Range
conspired with another, legally distinct entity or that entity’s
employees and agents.

Their proposed antitrust theory alleging

Range’s combination or conspiracy to restrain trade under the WVATA
and Sherman Act thus is legally insufficient, and any amendment to
the complaint to add these claims would be futile.
b.

Monopoly Claims

The proposed second amended complaint also alleges that Range
executed an “Exclusionary Scheme” to maintain or acquire monopoly
power in violation of the WVATA and Sherman Act.

Aside from a bald

allegation that Range maintained or attempted to obtain monopoly
power, however, the proposed amendment pleads no facts describing
the circumstances or extent of Range’s power in the relevant
market.
14

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
In order to state a monopoly claim under 15 U.S.C. § 2, “a
plaintiff must establish two elements: (1) the possession of
monopoly power; and (2) willful acquisition or maintenance of that
power–-

as

accidents.”

opposed

to

simply

superior

products

or

historic

E.I. du Pont de Nemours and Co. v. Kolon Industries,

Inc., 637 F.3d 435, 441 (4th Cir. 2011) (citing Eastman Kodak Co.
v. Image Technical Servs., Inc., 504 U.S. 451, 480 (1992)). The
failure to include any specific allegations regarding Range’s
possession of monopoly power dooms the proposed claims. Because
they are legally insufficient on their face, they would not survive
a motion to dismiss. See Dickson v. Microsoft Corp., 309 F.3d 193,
201-02 (4th Cir. 2002); Oksanen, 945 F.2d at 710.
5.

Claims for Fraud and Civil Conspiracy

The

plaintiffs

seek

to

add

claims

for

fraud

and

civil

conspiracy based on allegations that Range and its agents conspired
to carry out an “Exclusionary Scheme” intended to mislead the
plaintiffs and others into believing they had solid deals to lease
their gas reserves to Range when, in fact, Range never intended to
honor such agreements. The plaintiffs assert that Range did so for
the purpose of tying up their gas reserves and preventing them from
leasing those reserves to Range’s competitors.
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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
Pursuant to Fed. R. Civ. P. 9(b), a claim of fraud must be
pled by stating with particularity the “circumstances constituting
fraud or mistake." Fed. R. Civ. P. 9(b). "[T]he ‘circumstances'
required to be pled with particularity under Rule 9(b) are ‘the
time, place, and contents of the false representations, as well as
the identity of the person making the misrepresentation and what he
obtained thereby.'" Harrison v. Westinghouse Savannah River Co.,
176 F.3d 776, 784 (4th Cir. 1999) (quoting 5 Charles Alan Wright
and Arthur R. Miller, Federal Practice and Procedure: Civil § 1297,
at 590 (2d ed. 1990)).
Under West Virginia law, a plaintiff may pursue a fraud claim
by establishing:
“(1) that the act claimed to be fraudulent was
the act of the defendant or induced by him;
(2) that it was material and false; that
plaintiff relied on it and was justified under
the circumstances in relying upon it; and (3)
that he was damaged because he relied on it.”
Syl. Pt. 1, Lengyel v. Lint, 280 S.E.2d 66, 69 (W. Va. 1981)
(quoting Horton v. Tyree, 139 S.E. 737 (W. Va. 1927)). Here, the
proposed

second

amended

complaint

includes

only

conclusions regarding the plaintiffs’ fraud claim.
generally

alleging

that

Range

and

its

agents

bare

legal

Aside from
made

false

representations, it provides no details concerning the content or
16

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MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
nature of those false representations.

In that respect, it

contrasts starkly with the fraud allegations in Backwater and
Windstar, which included detailed facts regarding the nature of
Range’s

allegedly

false

statements.

See

Backwater,

2011

WL

1706521, at *6-*7; Windstar, 2011 WL 2709849, at *4. The bare legal
conclusions that are pled in the plaintiffs’ proposed second
amended complaint fail to satisfy the requirements of Fed. R. Civ.
P. 9(b).
Furthermore,

in

their

attempt

to

state

a

civil

fraud

conspiracy claim, the plaintiffs allege only that Range and its
parent corporation, agents or both, acted to defraud them. As noted
earlier in this opinion, however, under West Virginia law a
corporation

cannot

conspire

employees.4

See Ridgeway Coal Co. v. FMC Corp., 616 F. Supp. 404,

409 (S.D.W. Va. 1985).

with

itself,

its

agents,

or

its

The plaintiffs’ claims for fraud or civil

conspiracy, therefore, are clearly insufficient as a matter of law.
Allowing them to amend their complaint to add such claims would be

4

While there may be an exception to this general rule when
an employee has a personal stake in the outcome of an alleged
conspiracy, Ridgeway Coal, 616 F. Supp. at 409 n.3 (citing
Greenville Publishing Co., Inc. v. Daily Reflector, Inc., 496 F.2d
391 (4th Cir. 1974)), that exception does not apply to the facts as
alleged in the plaintiffs’ proposed second amended complaint.
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1:10CV23

MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
futile.

See Dunn v. Rockwell, 689 S.E.2d 255, 268 (2009) (holding

that a conspiracy is a combination of two or more persons to
accomplish an unlawful purpose or to accomplish a lawful purpose
through unlawful means).
6.

Claim for Tortious Interference with Prospective Contract

The plaintiffs propose to add a claim that Range tortiously
interfered with their prospective contracts through implementation
of an “Exclusionary Scheme” that prevented them from “accepting
bona fide offers from other oil and gas companies.”

Proposed

Amend. Compl. at ¶ 121 (dkt. no. 35-1). To state a claim for
intentional interference with a prospective business contract under
West Virginia law, a plaintiff must establish the following:
(1) existence of a contractual or business
relationship or expectancy . . . ; (2) an
intentional act of interference by a party
outside that relationship or expectancy . . .;
(3) proof that the interference caused the
harm sustained; and (4) damages.
Torbett v. Wheeling Dollar Sav. & Trust Co., 314 S.E.2d 166, 173
(W. Va. 1983).
While the complaints in Backwater and Windstar adequately
alleged that Range committed intentional acts that interfered with
their ability to accept offers to lease from Range’s competitors,
and fraudulently misled them into believing they had solid deals
18

KERNS, ET AL. V. RANGE RESOURCES

1:10CV23

MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
with Range so they would not entertain those other offers, the
plaintiffs’ proposed second amended complaint fails to include
factual allegations regarding fraud or Range’s acts of intentional
interference with any prospective leases. Aside from generally
alleging

that

Range’s

interference

“actually

prevented

the

[plaintiffs] from accepting bona fide offers from other oil and gas
companies,”

the

proposed

complaint

plaintiffs ever received such offers.
¶ 121 (dkt. no. 35-1).

fails

to

allege

that

the

Proposed Amend. Compl. at

Failing to allege that Range interfered

with specific prospective business opportunities offered to them is
a fatal oversight that dooms any prospects the plaintiffs might
have had to state a claim for tortious interference with a business
relationship.
7.

Claim for Negligent Misrepresentation

Finally, the plaintiffs seek to add a claim for negligent
misrepresentation based on conclusory allegations that Range made
“certain misrepresentations” to them in a “negligent . . . manner.”
Proposed Amend. Compl. at ¶ 121 (dkt. no. 35-1). To state a claim
for negligent misrepresentation under West Virginia law, however,
a plaintiff must establish that a defendant represented a matter as
being true, that the defendant had no knowledge of the truth of his
19

KERNS, ET AL. V. RANGE RESOURCES

1:10CV23

MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
representation, that the representation was false, and that the
plaintiff relied on the false representation to his detriment.
Folio v. City of Clarksburg, 655 S.E.2d 143, 151 (W. Va. 2007)
(citing Osborne v. Holt, 114 S.E. 801 (W. Va. 1923)); James v.
Piggott, 74 S.E. 667, 668 (W. Va. 1912) (citing

Crislip v. Cain,

19 W. Va. 438 (1882)); Mason v. Chappell, 15 Grat. (Va.) 572
(1860)).

A

non-fraud

claim,

including

one

of

negligent

misrepresentation, must satisfy the pleading requirements of Fed.
R. Civ. P. 8(a), which requires “a short and plain statement of the
claim showing that the pleader is entitled to relief.”

See

Baltimore County v. Cigna Healthcare, 238 F. App’x 914, 922 (4th
Cir. 2007) (unpublished). A claim consisting only of “threadbare
recitals of the elements of a cause of action, supported by mere
conclusory

statements”

requirements.
Here,

fails

to

satisfy

those

pleading

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009).

the

plaintiffs’

proposed

claim

for

negligent

misrepresentation consists of bare legal conclusions unsupported by
adequate factual allegations to state a plausible claim.

By

failing to include any allegations regarding the nature or content
of misrepresentations made by Range, the plaintiffs’ state law
claim for negligent misrepresentation is insufficient on its face.

20

KERNS, ET AL. V. RANGE RESOURCES

1:10CV23

MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO AMEND COMPLAINT [DKT. NO. 35],
DENYING PLAINTIFFS’ MOTION TO AMEND OR ALTER ORDER
[DKT. NO. 36], AND DISMISSING CASE WITHOUT PREJUDICE
V.

CONCLUSION

For the reasons discussed, the Court DENIES the plaintiffs’
motion to amend or alter the Court’s prior order (dkt. no. 36),
DENIES their motion for leave to file a second amended complaint
(dkt. no. 35), and, for the reasons stated, DISMISSES this case
WITHOUT PREJUDICE.
It is so ORDERED.
The Court directs the Clerk to enter a separate judgment
order, and to transmit copies of both orders to counsel of record.
DATED: August 23, 2011.

/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE

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