Opinion
Civil Action No. 05-1914 Section "R" (5).
June 24, 2005
ORDER AND REASONS
Defendants SFJ Management, Inc., d/b/a Six Flags New Orleans and Six Flags, Inc. move to dismiss plaintiff Clean Right, Inc.'s claim under Federal Rule of Civil Procedure 12(b) (6) for failure to state a claim upon which relief can be granted. For the following reasons, the Court GRANTS defendants' motion.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs Bobby and Yvonne Chaten assert that they were injured when a power outage stopped an amusement park ride at Six Flags New Orleans. Mr. Chaten alleges that he was jerked forward when the ride stopped, which caused him to suffer pain and injury to his neck, back and shoulder. Mrs. Chaten alleges that she suffered emotional distress.
On May 10, 2005, plaintiffs sued defendants for negligence in Louisiana state court. Mr. Chaten claims damages for injuries to his neck, back, and shoulder, pain and suffering, loss of enjoyment of life, temporary and permanent disabilities, medical expenses, loss of earnings and other damages. Mrs. Chaten claims damages for emotional distress and loss of consortium. Finally, Clean Right, Inc., which plaintiffs allege is a corporation wholly owned by Mr. Chaten, claims damages for economic losses that it sustained as a result of Mr. Chaten's injuries.
On May 20, 2005, defendants removed the case to this Court asserting diversity jurisdiction under 28 U.S.C. § 1441(a) and 28 U.S.C. § 1332(a) (1). Defendants now move to dismiss Clean Right, Inc.'s claim, asserting that, under Louisiana law, Clean Right, Inc. has failed to state a claim upon which relief can be granted.
II. LEGAL STANDARD
In a motion to dismiss for failure to state a claim under Rule 12(b) (6), the Court must accept all well-pleaded facts as true and view the facts in the light most favorable to the plaintiff. See Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996); Am. Waste Pollution Control Co. v. Browning-Ferris, Inc., 949 F.2d 1384, 1386 (5th Cir. 1991). The Court must resolve doubts as to the sufficiency of the claim in plaintiff's favor. Vulcan Materials Co. V. City of Tehuacana, 238 F.3d 382, 387 (5th Cir. 2001). Dismissal is warranted only if it appears certain that the plaintiff cannot prove any set of facts in support of his claim that would entitle him to relief. Id.; Piotrowski v. City of Houston, 51 F.3d 512, 514 (5th Cir. 1995) (quoting Leffall v. Dallas Indep. Sch. Dist., 28 F.3d 521, 524 (5th Cir. 1994)).
III. DISCUSSION
Defendants argue that Clean Right, Inc. does not have a claim against them for economic losses it sustained as a result of injury to Mr. Chaten, its president, manager and employee. In this diversity case, Louisiana law governs this question. See Woodfield v. Bowman, 193 F.3d 354, 359 n. 7 (5th Cir. 1999). Under Louisiana law, it is well established that "a corporation has no claim against a tortfeasor for the corporation's lost profits or other consequential damages that result from injury to the corporation's employee." Fuller v. United States, No. Civ.A. 00-2791, 2001 WL 699036, at *2 (E.D. La. June 20, 2001); Evans Vending Serv., Inc. v. Raymond, 666 So. 2d 334, 336 (La.Ct.App. 1996); Peterson v. W. World Ins. Co., 491 So. 2d 78, 80 (La.Ct.App. 1986); Baughman Surgical Assocs., Ltd. v. Aetna Cas. Sur. Co., 302 So. 2d 316, 318 (La.Ct.App. 1974). Louisiana courts routinely hold that the duty violated by the tortfeasor does not encompass the risk of indirect economic loss to a corporation from injury to one of its employees, because such damage "is too remote and indirect to be the subject of an action ex delicto." Evans Vending, Inc., 666 So. 2d at 336. This principle applies even when the employee at issue is closely associated with the corporation, such as when he or she is the owner, president or sole shareholder of the corporation. See Fuller, 2001 WL 699036, at *2 (corporation has no claim for economic losses resulting from injury to its majority shareholder, president and chief executive officer); Peterson, 491 So. 2d at 79-80 (corporation has no claim for economic losses resulting from injury to its president and sole shareholder); Fuksman v. Gen. Motors Corp., 447 So. 2d 74, 75 (La.Ct.App. 1984) (corporation has no claim for economic losses resulting from injury to its owner and operator). Here, the corporation Clean Right, Inc. attempts to recover damages it sustained as a result of injury suffered by its president, manager and employee, Mr. Chaten. Louisiana law clearly forecloses such a claim.
Furthermore, plaintiffs' new contention that Clean Right, Inc. is actually a sole proprietorship, not a corporation, does not salvage this claim. First, the assertion that Clean Right, Inc. is a sole proprietorship flatly contradicts the allegation plaintiffs made in the complaint that "Clean Right, Inc. is a legal corporation wholly owned by Bobby Chaten." (Pls.' Compl. at ¶ 1). Second, even if Clean Right, Inc. is a sole proprietorship, plaintiffs' argument is self-defeating. Under Louisiana law, a sole proprietorship is not legally distinct from the individual who is the sole proprietor, and it has no separate and distinct legal status that would allow it pursue damages on its own behalf. See Robinson v. Heard, 809 So. 2d 943, 946 (La. 2002) ("A sole proprietorship is not a person . . . It is not a corporation, partnership or other juridical person. It cannot sue or be sued.").
Finally, plaintiffs cite no authority that supports their argument. Indeed, none of the cases they cite extends a tort duty to a business enterprise under the circumstances presented here. See, e.g., Cleco Corp. v. Johnson, 795 So.2d 302, 307 (La. 2001) (allowing company to recover for physical damage to company's customers' equipment that was directly caused by defendant's backing into company's utility pole).
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS defendants' motion to dismiss plaintiff Clean right, Inc.'s claims.