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RAD Manufacturing, L.L.C. v. Advanced Fabrication Services, Inc.

United States District Court, M.D. Pennsylvania

June 20, 2017

RAD MANUFACTURING, L.L.C., formerly known as RAD Wood Work Company, et al., Plaintiffs,
v.
ADVANCED FABRICATION SERVICES, INC. t/d/b/a AFS ENERGY SYSTEMS, Defendant.

          MEMORANDUM

          MALACHY E. MANNION, United States District Judge.

         Before the court is the defendant's motion to dismiss. (Doc. 8). The defendant seeks to dismiss the plaintiffs' amended complaint. (Doc. 5). For the foregoing reasons, the defendant's motion is GRANTED.

         I. BACKGROUND

         The plaintiff RAD Manufacturing, L.L.C. (“RAD”) is an owner and operator of a wood floor manufacturing facility incorporated in Delaware with its principle place of business in Pennsylvania. The defendant Advanced Fabrication Services, Inc. (“AFS”) is in the business of designing, troubleshooting, installing, maintaining, servicing, and repairing boilers and boiler control systems. AFS is incorporated in Pennsylvania and has its principle place of business in Pennsylvania. The plaintiff Indiana Lumbermens Mutual Insurance Company (“Lumbermens”) insures and acts as subrogee to RAD. Lumbermens is incorporated in Indiana with its principle place of business in Indiana. The plaintiff The Travelers Indemnity Company (“Travelers”) reinsures and acts as subrogee to Lumbermens. Travelers is incorporated in Connecticut and has its principle place of business in Connecticut.

         Prior to November 2014, RAD hired and contracted with AFS to design, fabricate, construct, program, assemble, install, inspect, test, maintain, repair, and service a boiler control system on RAD's premises. On November 2, 2014, the boiler dry fired causing damage to RAD's real property. The boiler control system was supposed to prevent dry fires by monitoring the level of cooling water in the boiler and shutting off the boiler if the level of water was below predetermined levels. The boiler control system did not operate as intended, leading to the dry fire. RAD submitted a claim to Lumbermens following the real property loss. Lumbersmens and Travelers have paid and may continue to pay in excess of two million dollars as compensation for that loss. RAD also suffered additional property losses of approximately $431, 000.00 not covered by any insurance, which RAD seeks to recover. (Doc. 21 at 3).

         On October 24, 2016, the plaintiffs filed a complaint in this court. (Doc. 1). The plaintiffs filed an amended complaint on November 4, 2016 as a matter of right. (Doc. 5). The plaintiffs' amended complaint alleged four claims against the defendant: (1) negligence-Count I; (2) strict liability-Count II; (3) breach of warranty-Count III; and (4) breach of contract-Count IV. RAD also commenced a civil action against the defendant in the Luzerne County Court of Common Pleas by filing a praecipe for writ of summons. RAD Mfg. LLC v. AFS Energy Systems, No. 201600589 (Ct. Com. Pl. 2016). No complaint has been filed.

         On November 23, 2016, the defendant filed the current motion to dismiss the plaintiffs' claims. (Doc. 8). A brief is support was filed on December 6, 2016. (Doc. 9). The defendant's motion seeks dismissal of the plaintiffs' amended complaint primarily based on the court's alleged lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). In the alternative, the defendant seeks dismissal of the plaintiffs' strict liability claim (Count II) and breach of warranty claim (Count III) based on Federal Rule of Civil Procedure 12(b)(6) and the plaintiffs' failure to state a claim. The defendant also moves for a more definitive statement with respect to the negligence claim (Count I) pursuant to Federal Rule of Civil Procedure 12(e), also in the alternative. The plaintiffs filed a proper brief in opposition on December 27, 2016. (Doc. 13).

         On February 9, 2017, the court ordered the parties to submit supplemental briefs to aid the court's resolution of the jurisdictional issue. (Doc. 20). On February 23, 2017, the parties submitted their supplemental briefs per the court's order. (Docs. 21-22). The defendant's motion is now fully ripe for review.

         II. STANDARD OF REVIEW

         Rule 12(b)(1) provides for the dismissal of a complaint based on a “lack of subject-matter jurisdiction.” Fed.R.Civ.P. 12(b)(1). “A motion to dismiss under Rule 12(b)(1) challenges the jurisdiction of the court to address the merits of the plaintiff's complaint.” Vieth v. Pennsylvania, 188 F.Supp.2d 532, 537 (M.D. Pa. 2002). Because the district court is a court of limited jurisdiction, the burden of establishing subject matter jurisdiction always rests upon the party asserting it. See Kokkonen v. Guardian Life. Ins. Co. of America, 511 U.S. 375, 377 (1994). Generally, however, district courts “enjoy substantial flexibility in handling Rule 12(b)(1) motions.” McCann v. Newmann Irrevocable Trust, 458 F.3d 281, 290 (3d Cir. 2006).

         An attack on the court's jurisdiction may be either “facial” or “factual” and the “distinction determines how the pleading must be reviewed.” Const. Party of Pa. v. Aichele, 757 F.3d 347, 357 (3d Cir. 2014). A facial attack tests the sufficiency of the pleadings, while a factual attack challenges whether a plaintiff's claims fail to comport factually with jurisdictional prerequisites. Id. at 358; see also S.D. v. Haddon Heights Bd. of Educ., 833 F.3d 389, 394 n. 5 (3d Cir. 2016). If the defendant brings a factual attack, the district court may look outside the pleadings to ascertain facts needed to determine whether jurisdiction exists, which is distinct from a facial attack. Id. If there are factual deficiencies, the court's jurisdictional determination may require a hearing, particularly where the disputed facts are material to finding jurisdiction. McCann, 458 F.3d at 290. Here, the defendant complains of factual deficiencies. The plaintiffs do not dispute these facts and, instead, argue that jurisdiction is proper despite these deficiencies as a matter of law. The court disagrees.

         III. DISCUSSION

         The district court is a court of “limited jurisdiction.” Exxon Mobile Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005) (Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). It “possess[es] only that power authorized by Constitution and statute.” Id. “[A] federal court always has jurisdiction to determine its jurisdiction.” Zambelli Fireworks Mfg. Co., Inc. v. Wood, 592 F.3d 412, 418 (3d Cir. 2010). When the court's jurisdiction is at issue, however, “it is incumbent upon the courts to resolve such doubts . . . before proceeding to a disposition on the merits.” Id. (quoting Carlsberg Res. Corpo. v. Cambria Sav. & Loan Ass'n, 554 F.2d 1254, 1256 (3d Cir. 1977)).

         District courts have original jurisdiction over federal question cases-those involving the Constitution, federal law, or treaties of the United States. 28 U.S.C. §1331. The district court also has original jurisdiction and serves as neutral forum for disputes between citizens of different states, between U.S. citizens and foreign citizens, and between U.S. citizens and foreign states where the amount in controversy exceeds $75, 000.00-i.e., diversity cases. 28 U.S.C. §1332. A district court may also exercise supplemental jurisdiction over claims “so related to claims in the action within [the court's] original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. §1367(a). Because the plaintiffs' claims present no federal question, this court's jurisdiction must be premised on either diversity of citizenship or supplemental jurisdiction. Neither form of jurisdiction is appropriate here. Further, the court cannot cure the jurisdictional defect.

         A. The Court Lacks Diversity and Supplemental Jurisdiction.

         Diversity jurisdiction requires complete diversity between the parties in the action. Otherwise stated, “presence in the action of a single plaintiff from the same State as a single defendant deprives the district court of original jurisdiction over the entire action.” Exxon Mobile, 545 U.S. at 553. Complete diversity is an essential component of jurisdiction. Without it, the principle reason for conferring jurisdiction-to serve as a neutral forum and not favor home-state litigants-is eliminated. Id. at 553-54.

         RAD's presence in this action destroys complete diversity in this action. For jurisdictional purposes, a corporation is deemed to be a citizen of its place of incorporation and its principle place of business. 28 U.S.C. §1332(c)(1). Based on allegations within the amended complaint, RAD is incorporated in Delaware, but has its principle place of business in Pennsylvania. Thus, RAD is deemed a citizen of both Delaware and Pennsylvania. Also based on allegations in the amended complaint, AFS is incorporated in and has its principle place of business in Pennsylvania and is, therefore, also deemed ...


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