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Fairmont Supply Co. and Cnx Gas Company, LLC v. Cressman Tubular Products Corp.

April 6, 2011

FAIRMONT SUPPLY CO. AND CNX GAS COMPANY, LLC,
PLAINTIFFS,
v.
CRESSMAN TUBULAR PRODUCTS CORP., THYSSENKRUPP MATERIALS, N.A., THYSSENKRUPP MANNEX GMBH, AND ISMT LTD,
DEFENDANTS.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

ELECTRONICALLY FILED

MEMORANDUM OPINION

Before the Court is a Motion to Dismiss Plaintiffs‟ Second Amended Complaint filed on behalf of Defendant, ThyssenKrupp Materials, N.A. ("ThyssenKrupp-Materials"). Doc. no. 37. Plaintiffs filed a Brief in Opposition to the Motion (doc. no. 44), and after seeking leave of Court, Defendant ThyssenKrupp-Materials filed an eight-page Reply Brief. Doc. no. 52. For the reasons set forth in greater detail below, Defendant‟s Motion to Dismiss Plaintiffs‟ Second Amended Complaint shall be denied.

I. Background

This Court writes primarily for the parties who are familiar with the facts of this case and thus, will not restate any factual allegations that are not germane to the resolution of this most recent Motion to Dismiss filed by Defendant ThyssenKrupp-Materials. See the Court‟s prior Memorandum Opinion of March 10, 2011, filed at doc. no. 26.

The following facts are accepted as true for solely for the purposes of this Motion to Dismiss.

Christiane Stuart, General Manager of ThyssenKrupp-Materials‟ Houston office, and Carsten Konig, head of the Oil and Gas division of ThyssenKrupp Mannex GmbH, attended a meeting held on June 26, 2009, at Plaintiff-Fairmont‟s office in Canonsburg, Pennsylvania, on behalf of Defendant. Doc. no. 32 at ¶¶ 16, 18-19, 21. During the meeting, Konig said that ISMT‟s new steel mill in India was producing steel pipes that were "suitable for use in Marcellus shale gas drilling . . . and that complied with standards published by the American Petroleum Institute . . . ("API")." Id. at ¶ 23.

Stuart and Konig represented that Defendant Cressman Tubular Products Corporation ("Cressman") was ThyssenKrupp-Materials‟ and ThyssenKrupp-Mannex‟s sole point of contact in the United States for purchasing ISMT steel. Id. at 25. Stuart and Konig also advised Plaintiff-Fairmont that ISMT‟s 51/2 inch P110 steel pipe, purchased through Defendant-Cressman, would include an express warranty from Defendants that the pipe complied with API specifications. Id. at ¶ 26. Stuart and Konig never indicated that Cressman would warrant the goods as API compliant, or that Fairmont could not look to the Co-Defendants to make warranty claims. Id. at ¶ 27. To the contrary, Stuart and Konig merely represented that all orders needed to go through Cressman, and that Cressman had the authority to warrant the pipe Stuart was marketing. Id. at ¶28.

It was apparent to Plaintiff Fairmont that Cressman was acting as agent or sub-agent, or in the alternative, apparent agent and/or sub-agent, for Defendants for the purposes of warranting ISMT-manufactured pipe as API compliant. Id. at ¶ 29.

II. Standard of Review

In considering a Rule 12(b)(6) motion, federal courts require notice pleading, as opposed to the heightened standard of fact pleading. Federal Rule of Civil Procedure 8(a)(2) requires only " "a short and plain statement of the claim showing that the pleader is entitled to relief,‟ in order to "give the defendant fair notice of what the . . . claim is and the grounds on which it rests.‟ " Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

To survive a motion to dismiss, plaintiff must allege sufficient facts that, if accepted as true, state "a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 at 570). A claim has facial plausibility when a plaintiff pleads facts that allow the court to draw the reasonable inference that the defendant may be liable for the misconduct alleged. Id. at 1949. However, the court is ""not bound to accept as true a legal conclusion couched as a factual allegation.‟ " Iqbal, 129 S.Ct. at 1950 (quoting Twombly, 550 U.S. at 555). In deciding a motion to dismiss, a court must determine whether the complaint "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." PA Prison Soc. v. Cortes, 622 F.3d 215, 233 (3d Cir. 2010), citing Iqbal, 129 S.Ct. at 1949. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id.; see also Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009).

As explained succinctly by the United States Courts of Appeals for the Third Circuit:

Pursuant to Ashcroft v. Iqbal, [citation omitted], district courts must conduct a two-part analysis when presented with a motion to dismiss. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.2009). "First, the factual and legal elements of a claim should be separated." Id. "The District Court must accept all of the complaint‟s well-pleaded facts as true, but may disregard any legal conclusions." Id. at 210-11. "Second, a District Court must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a "plausible ...


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