Opinion
1-23-CV-505-DII
05-15-2024
BERNARDO GARZA; ERIC GUTIERREZ; MIGUEL VILLARREAL; AND BLAINE STEWARD, Plaintiffs, v. GIBRALTAR U.S., INC.; GIBRALTAR FABRICATION, LLC; GIBRALTAR MATERIAL DISTRIBUTION GP, LLC; W.W. GRAINGER, INC.; AND B/A PRODUCTS CO., Defendants.
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
MARK LANE UNITED STATES MAGISTRATE JUDGE
TO THE HONORABLE UNITED STATES DISTRICT JUDGE:
Before the court is Defendant W.W. Grainger, Inc.'s Motion to Dismiss Plaintiffs' Amended Complaint and Memorandum in Support (Dkt. 40) and all related briefing. Having considered the pleadings, the relevant case law, and the entire case file, the undersigned submits the following Report and Recommendation to the District Court.
The motion was referred by United States District Judge Robert Pitman to the undersigned for a Report and Recommendation as to the merits pursuant to 28 U.S.C. § 636(b), Rule 72 of the Federal Rules of Civil Procedure, and Rule 1(d) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas. See Text Order dated January 10, 2024.
I. Background
Plaintiffs assert they were injured at work when the hooks of a hanging beam assembly failed and sheets of metal hanging from the hooks fell and severely injured them. Dkt. 39 (FAC) ¶¶ 13-15. The hooks were manufactured by a defendant who has already been dismissed from this case, and they were sold by Granger. Id. ¶ 14. Plaintiffs allege Granger “participated in the sale, marketing, and distribution of the [h]ooks” but “failed to provide adequate warnings regarding the . . . hook[s].” Id. Plaintiffs assert claims for strict product liability, id. ¶¶ 21-24, marketing defect and failure to warn, id. ¶¶ 25-34, and negligence, id. ¶¶ 35-41.
Grainger previously moved to dismiss Plaintiffs' original Complaint under Rule 12(c), arguing Grainger is an industrial distributor that does not design or manufacture products and is therefore immune from suit under the Texas Product Liability Statute. TEX. CIV. PRAC. & REM. CODE § 82.001, et seq. The statute lists seven circumstances in which a nonmanufacturing seller may be liable. TEX. CIV. PRAC. & REM. CODE § 82.003. Grainger argued Plaintiffs have pleaded no facts that show it could be liable under one of the seven circumstances listed in the statute.
Because Plaintiffs had failed to adequately plead their claims, the court could not determine whether Grainger was entitled to the Texas Products Liability Statute's protections for nonmanufacturing sellers. Accordingly, the undersigned recommended Grainger's motion be denied and Plaintiffs be allowed to replead their claims. Dkt. 31. The District Court adopted the Report and Recommendation. Dkt. 38.
Plaintiffs have now repleaded their claims, and Grainger has again moved to dismiss. Dkt. 39. Grainger argues Plaintiffs still have not pleaded any facts from which the court could conclude that Grainger is not entitled to immunity under the Texas Products Liability Statute.
II. Motion to Dismiss
A. Standard of Review
When evaluating a motion to dismiss for failure to state a claim under Rule 12(b)(6) the complaint must be liberally construed in favor of the plaintiff and all facts pleaded therein must be taken as true. Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). Although Federal Rule of Civil Procedure 8 mandates only that a pleading contain a “short and plain statement of the claim showing that the pleader is entitled to relief,” this standard demands more than unadorned accusations, “labels and conclusions,” “a formulaic recitation of the elements of a cause of action,” or “naked assertion[s]” devoid of “further factual enhancement.” Bell Atl. v. Twombly, 550 U.S. 544, 555-57 (2007). Rather, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Id. at 570. The Supreme Court has made clear this plausibility standard is not simply a “probability requirement,” but imposes a standard higher than “a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The standard is properly guided by “[t]wo working principles.” Id. First, although “a court must ‘accept as true all of the allegations contained in a complaint,' that tenet is inapplicable to legal conclusions” and “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678. Second, “[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. Thus, in considering a motion to dismiss, the court must initially identify pleadings that are no more than legal conclusions not entitled to the assumption of truth, then assume the veracity of well-pleaded factual allegations and determine whether those allegations plausibly give rise to an entitlement to relief. If not, “the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. at 679 (quoting FED. R. CIV. P. 8(a)(2)).
B. Analysis
The Texas Products Liability Statute applies to “any action against a manufacturer or seller for recovery of damages arising out of personal injury, death, or property damage allegedly caused by a defective product whether the action is based in strict tort liability, strict products liability, negligence, misrepresentation, breach of express or implied warranty, or any other theory or combination of theories.” Green v. Toyota Motor Corp., No. 3:11-CV-0207-N, 2012 WL 13103033, at *2 (N.D. Tex. July 18, 2012) (quoting TEX. CIV. PRAC. & REM. CODE § 82.001(4)). The statute lists seven circumstances in which a nonmanufacturing seller may be liable. TEX. CIV. PRAC. & REM. CODE § 82.003. Those seven circumstances are:
(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;
(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.
TEX. CIV. PRAC. & REM. CODE § 82.003(a) (emphasis added).
Grainger concedes that Plaintiffs pleaded that “Grainger exercised substantial control over the content of warnings and/or instructions that accompanied the Hooks,” FAC ¶ 28, but argues this merely recites the statutory language and Plaintiffs pleaded no facts that support this assertion.
Grainger also argues Plaintiffs pleaded no facts as to what the inadequate warning stated or how it contributed to Plaintiffs' injuries.
Plaintiffs argue they pleaded that:
(1) Grainger exercised substantial control over the warnings and instructions for the hooks that failed and injured the plaintiffs, FAC ¶ 28;
(2) Grainger “failed to provide adequate warnings regarding the risk of hook failure, the intended purpose of the hooks, load limits, and/or the risk that the hooks would not properly secure items hanging from them in their intended and/or reasonably foreseeable uses,” FAC ¶ 14; and
(3) the plaintiffs' injuries were caused by Grainger's failure to warn, FAC ¶ 16-20.
Dkt. 42 at 3. Plaintiffs argue this satisfies Rule 12(b)(6) and attempt to distinguish the cases Grainger cites. Alternatively, Plaintiffs seek leave to amend one final time to adequately plead their claims. Grainger opposes allowing Plaintiffs a third try to plead their claims.
Plaintiffs' attempts to distinguish the cases on which Grainger relies fail. See Woodhouse v. Bird Rides, Inc., 2021 WL 1986427 at *6 (W.D. Tex. May 17, 2021); Harbuck v. Ford Motor Co., No. 4:18-CV-576-A, 2018 WL 4375079, at *3 (N.D. Tex. Sept. 13, 2018). Plaintiffs argue Woodhouse actually supports their position because the district court found that the complaint alleged Bird “exercised substantial control over the content of a warning or instruction that accompanied the product,” which satisfied the first requirement of Section 82.003(a)(4). Woodhouse, 2021 WL 1986427 at *6. But that complaint also alleged that “instead of providing the manufacturer's important safety warnings,” Bird “provided inadequate and incomplete warnings.” Id. Thus, Woodhouse pleaded some facts that supported Bird's control over the warnings that came with the scooters at issue. Woodhouse did not merely parrot the statutory language. Plaintiffs try to distinguish Harbuck because the district court applied Rule 9(b)'s higher pleading standard to plaintiff's assertion that defendant made factual misrepresentations about the product under Section 82.003(a)(5). But, citing Iqbal, the court held plaintiffs “have not pleaded any facts to identify the ‘who, what, when, where, and how' of the alleged misrepresentation by RLB. Instead, they merely recite the statutory language, which would not in any event be sufficient.” Harbuck, 2018 WL 4375079, at *3 (citing Iqbal, 566 U.S. at 679). Thus, Harbuck held that merely reciting the statutory language does not satisfy Rule 8's requirements as articulated in Iqbal and Twombly.
Here, Plaintiffs have merely recited the statutory language required for liability. They pleaded no facts that support their claim that Grainger had control over the warnings or instructions that accompanied the hooks. They pleaded no facts that support their assertion that the hooks were used in accordance with the warnings or instructions provided. Instead, Plaintiffs merely plead the conclusory statement that because of Grainger's failure to warn, they were injured. Compl. ¶¶ 16-19. This is not enough. Although Rule 8 only requires a “short and plain statement of the claim showing that the pleader is entitled to relief,” merely pleading “labels and conclusions,” “a formulaic recitation of the elements of a cause of action,” or “naked assertion[s]” devoid of “further factual enhancement” is not sufficient. Twombly, 550 U.S. at 555-57; Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Plaintiffs' Amended Complaint does state a claim to relief that is plausible on its face.
III. Leave to Amend
In the event the court is inclined to dismiss the Amended Complaint, Plaintiffs seek leave to amend their Complaint again to address its deficiencies. Grainger opposes this.
Rule 15 governs motions to amend made before trial and provides that “[t]he court should freely give leave when justice so requires.” Thomas v. Chevron U.S.A., Inc., 832 F.3d 586, 590 (5th Cir. 2016) (quoting FED. R. CIV. P. 15(a)(2)). “Rule 15(a) ‘evinces a bias in favor of granting leave to amend.'” Id. (quoting Herrmann Holdings Ltd. v. Lucent Techs. Inc., 302 F.3d 552, 566 (5th Cir. 2002)). A movant is required to give the court some notice of the nature of his or her proposed amendments. Id. (“it is clear that some specificity is required”). Even when proper notice is given, permissible reasons for denying a motion for leave to amend include “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.” Id. at 591 (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). Courts use the Rule 12(b)(6) standard to evaluate futility, and courts deny leave as futile when “the theory presented in the amendment lacks legal foundation or because the theory has been adequately presented in a prior version of the complaint.” Id. at 591-92; Jamieson By & Through Jamieson v. Shaw, 772 F.2d 1205, 1208 (5th Cir. 1985).
Plaintiffs do make seek leave to amend on a clean slate with the undersigned. Notably, the court previously recommended dismissal of some defendants who had been added to the statecourt Complaint to defeat diversity jurisdiction. While this is not unusual, the remarkable aspect about those defendants was that Plaintiffs had already recovered from them for their injuries through workers' compensation benefits. Dkt. 31 (R&R) at 7. It should have been apparent to Plaintiffs (and their attorneys) that could not recover again against their employers. See TEX. LABOR CODE § 408.001(a) (“Recovery of workers' compensation benefits is the exclusive remedy of an employee covered by workers' compensation insurance coverage.”). Although the court did not sanction Plaintiffs' counsel for suing entities Plaintiffs had already recovered from, the court did find their conduct so questionable that court felt compelled to remind Plaintiffs' counsel of their obligations under Rule 11 if they chose to amend their complaint. In the previous Report and Recommendation, the court also provided Plaintiffs' counsel with a reminder of the appropriate pleading standard, R&R at 9-10, and the statute under which Grainger could be sued, id. at 12 (citing TEX. CIV. PRAC. & REM. CODE § 82.003).
Notwithstanding this advice, Plaintiffs again sued Grainger with only a formulaic, conclusory allegations of liability. In response to Grainger's motion to dismiss, Plaintiffs provided no additional facts to support their claims. In seeking yet another chance to amend, they provide the court with no insight into what additional facts they could plead to support viable claims. Accordingly, because Plaintiffs have failed to show that amendment would not be futile, the undersigned will recommend that the Amended Complaint be dismissed with prejudice and Plaintiffs be denied leave to amend.
IV. Recommendations
The undersigned RECOMMENDS that the District Court GRANT Defendant W.W. Grainger, Inc.'s Motion to Dismiss Plaintiffs' Amended Complaint and Memorandum in Support (Dkt. 40) and DISMISS Plaintiffs' claims against W.W. Grainger, Inc. with prejudice and Plaintiffs be DENIED leave to amend.
As Grainger is the last defendant in the case, the case can be closed upon Grainger's dismissal.
V. Objections
The parties may file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are being made. The District Court need not consider frivolous, conclusive, or general objections. See Battles v. United States Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report and, except upon grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Services Auto. Ass'n, 79 F.3d 1415 (5th Cir. 1996)(en banc).