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Bombardier Transportation Holdings USA, Inc. v. United Chemi-Con, Inc.

United States District Court, W.D. Pennsylvania

March 22, 2018

UNITED CHEMI-CON, INC., Defendant UNITED CHEMI-CON, INC., Third-Party Plaintiff


         Before the Court are: (1) Third-Party Defendant New York City Transit Authority (“NYCTA”)'s Motion to Dismiss Third-Party Complaint (Doc. No. 61), and (2) Third-Party Defendant Kawasaki Rail Cars, Inc. (“Kawasaki”)'s Motion to Dismiss Third-Party Complaint (Doc. No. 58). For the following reasons, the Court will grant the motions to dismiss.

         I. BACKGROUND [1]

         Sometime in 2010, Kawasaki contracted with NYCTA to build rail cars for a project known as the R188 Car Build (“Rail Car Contract”). (Doc. No. 42 ¶ 8.) The Rail Car Contract required Kawasaki to build 23 rail cars, with NYCTA retaining an option to require Kawasaki to build up to 120 additional rail cars. (Id. ¶ 9.) Subsequently, Kawasaki, as general contractor, entered into an agreement with Bombardier for the supply of propulsion systems for 23 new rail cars (the “Kawasaki Subcontract”). (Id. ¶¶ 11-12.) The Kawasaki Subcontract incorporated the terms of the Rail Car Contract and included an option for Kawasaki to purchase additional propulsion units from Bombardier. (Id. ¶ 13.) The Kawasaki Subcontract contained technical specifications for aspects of the propulsion units, including capacitors, a key component of the propulsion systems. (Id. ¶ 14.) Specifically, Technical Specification 9.5.3 addressed the capacitors and stated that “Filter capacitors shall be oil filled or electrolytic with 15 years minimum design life.” (Id. ¶ 15.)

         Bombardier contracted with UCCI by way of purchase orders to design and fabricate capacitors for the Rail Car Project (the “UCCI Subcontract”). (Id. ¶ 17.) The UCCI Subcontract incorporated the technical specifications in the Rail Car Contract and the Kawasaki Subcontract. (Id.) Bombardier alleges that UCCI was “aware that the life span for the capacitors was a material term and that Bombardier would not have entered into the UCCI Subcontract if UCCI had not agreed to provide a capacitor with the required lifespan.” (Id. ¶ 18.) By way of eight purchase orders, Bombardier ordered approximately 5, 439 capacitors. (Id. ¶ 19.)

         After UCCI fabricated the capacitors, UCCI shipped them to a Bombardier subcontractor for assembly into a “containment unit, ” each containing eight capacitors. (Id. ¶ 20.) Each rail car contained four containment units, or a total of 32 capacitors in each rail car. (Id.) The containment units underwent further assembly by Bombardier to become “weldments, ” which were then shipped to Kawasaki in Yonkers, New York for inclusion in the rail cars. (Id. ¶ 21.)

         Bombardier alleges that the capacitors began to fail in October of 2015. (Id. ¶ 22.) At that time, 31 rail cars contained weldments with capacitors manufactured by UCCI, 99 additional weldments containing UCCI capacitors were delivered but not yet installed, and the remaining capacitors had been delivered to Bombardier's subcontractor for assembly into containment units. (Id. ¶ 23.) As a result, Bombardier alleges that it was forced to retrofit the 31 cars containing weldments using UCCI capacitors and change out the 99 weldment units containing UCCI capacitors. (Id. ¶ 24.) Bombardier alleges that it provided UCCI with notice of the failures and that UCCI failed to take remedial action, resulting in damages to Bombardier in excess of $800, 000 due to the capacitor failures. (Id. ¶¶ 24, 26-27.)

         On December 22, 2016, Bombardier filed a complaint in the United States District Court for the Western District of Pennsylvania (Doc. No. 1), against UCCI alleging claims of: breach of express warranty (Count 1); breach of implied warranty (Count 2); Breach of Contract pursuant to the Pennsylvania Uniform Commercial Code and common law (Counts 3 and 4); Indemnification by Contract and under common law (Counts 5 and 6); Unjust Enrichment (Count 7); and Negligence (Count 8). UCCI filed its Answer to the Complaint with Affirmative Defenses on March 24, 2017. (Doc. No. 12.) Subsequently, Judge Nora Barry Fischer issued a Case Management Order setting case management deadlines, including a deadline of June 2, 2017 for motions to amend or add parties (Doc. No. 24), and simultaneously referred this case to mediation (Doc. No. 25).

         On May 31, 2017, without filing a motion seeking leave of court to file a third-party complaint as required by Federal Rule of Civil Procedure 14(a)(1), UCCI filed a Third-Party Complaint against Kawasaki and NYCTA, alleging counts of common law indemnification and contribution against both Kawasaki and NYCTA, because “[i]f the UCC capacitors failed, then the cause of any failure in the UCC capacitors is caused by the propulsion mechanism present in the propulsion system designed by Kawasaki and/or the misapplication of excessive amounts of voltage by NYTA.” (Doc. No. 29 at 2.)

         Meanwhile, on June 2, 2017, Bombardier filed a Motion for Leave to File a First Amended Complaint. (Doc. No. 30.) The Court granted Bombardier's motion by Order dated June 13, 2017, and directed the filing of a First Amended Complaint by June 20, 2017. (Doc. No. 38.) On June 15, 2017, Bombardier filed its First Amended Complaint, which asserts the same causes of action contained in its original Complaint, with the addition of some factual allegations. (Doc. No. 42.) UCCI filed its Answer to the First Amended Complaint on July 6, 2017. (Doc. No. 50.)

         After the case failed to resolve through mediation, Judge Fischer issued an Amended Case Management Order on July 14, 2017, setting a close of fact discovery date for March 30, 2018. (Doc. No. 52.) On August 17, 2017, Kawasaki filed a Motion to Dismiss the third-party claims asserted against it, with a supporting brief. (Doc. Nos. 58, 59.) In its moving papers, Kawasaki argues that UCCI's claims against it fail as a matter of law because: (1) claims of contribution and common law indemnity are available only between defendants liable to a plaintiff in tort, and Bombardier's claim of negligence against UCCI is barred by the economic loss and gist of the action doctrines; and (2) UCCI does not allege a legal relationship with Kawasaki that is a necessary predicate for an indemnity claim. (Doc. No. 59 at 2.)

         On August 18, 2017, NYCTA filed its Motion to Dismiss the third-party claims asserted against it, with a supporting brief. (Doc. Nos. 61, 62.) In its moving papers, NYCTA argues that UCCI's claims against it should be dismissed: (1) pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction over NYCTA; and (2) pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (Doc. No. 62 at 2-3.) UCCI filed briefs in opposition to both motions to dismiss (Doc. Nos. 65, 66), and Bombardier also filed briefs responding to both motions to dismiss (Doc. Nos. 64, 69). Kawasaki and NYCTA filed reply briefs in further support of their motions in late September 2017. (Doc. Nos. 72, 73.) On September 28, 2017, this case was reassigned to the undersigned. (Doc. No. 74.) On October 10, 2017, this Court issued an Order providing that all case-related deadlines remained in effect. (Doc. No. 75.)[2] The pending motions to dismiss are ripe for disposition.


         A. Federal Rule of Civil Procedure 14

          Federal Rule of Civil Procedure 14 provides as follows:

[a] defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it. But the third-party plaintiff must, by motion, obtain the court's leave if it files the third-party complaint more than 14 days after serving the original answer.

Fed. R. Civ. P. 14(a)(1). The Rule also provides that “[a]ny party may move to strike the third-party complaint.” Fed.R.Civ.P. 14(a)(4).

         In order for a third-party claim to be valid, there must be a basis for liability between the defendant/third-party plaintiff and the third-party defendant. See C. Wright, A. Miller, & M. Kane, 6 Federal Practice and Procedure § 1446 (3d ed.) (“A third-party claim may be asserted under Rule 14(a)(1) only when the third party's liability is in some way dependent on the outcome of the main claim or when the third party is secondarily liable to the defending party.”). A defendant may not assert a third-party claim under Rule 14 against a party that is solely liable to the plaintiff. See, e.g., Herndon Borough Jackson Twp. Joint Mun. Auth. v. Pentair Pump Grp., Inc., No. 4:12-cv-01116, 2015 WL 2166097, at *2 (M.D. Pa. May 8, 2015); O'Mara Enter., Inc. v. Mellon Bank, N.A., 101 F.R.D. 668, 670 (W.D. Pa. 1983).

         Rule 14 is the proper procedure by which to implead a third-party defendant when “state substantive law recognizes a right of contribution and/or indemnity.” In re One Meridian Plaza Litig., 820 F.Supp. 1492, 1496 (E.D. Pa. 1993) (citing Smith v. Whitmore, 270 F.2d 741 (3d Cir. 1959)). Further, “[i]n general, whether a particular third-party defendant may be impleaded is a question which ‘rests with the sound discretion of the trial court.'” State Coll. Area Sch. Dist. v. Royal Bank of Can., 825 F.Supp.2d 573, 579 (M.D. Pa. 2011) (quoting Hartford Casualty Ins. Co. v. ACC Meat Co., No. 1:10-cv-1875, 2011 WL 398087, at *1 (M.D. Pa. Feb. 2, 2011)).

         B. Federal Rule of Civil Procedure 12(b)(2)

         Federal Rule of Civil Procedure 12(b)(2) permits a defendant to bring a motion challenging the court's right to exercise personal jurisdiction over it. Fed.R.Civ.P. 12(b)(2). Once “the defendant raises the question of personal jurisdiction, the plaintiff bears the burden to prove, by a preponderance of the evidence, facts sufficient to establish personal jurisdiction.” Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992). On a motion to dismiss pursuant to Rule 12(b)(2), the plaintiff must “establish[] jurisdictional facts through sworn affidavits or other competent evidence.” Time Share Vacation Club v. Atl. Resorts, 735 F.2d 61, 66 n.9 (3d Cir. 1984). “[A]t no point may a plaintiff rely on the bare pleadings alone in order to withstand a defendant's Rule 12(b)(2) motion to dismiss for lack of in personam jurisdiction.” Id.

         “A federal court may assert personal jurisdiction over a nonresident of the state in which the court sits to the extent authorized by the law of the state.” Carteret Sav. Bank, 954 F.2d at 144-45 (quoting Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d 434, 436 (3d Cir. 1987)). Pennsylvania's long-arm statute permits the Court to exercise personal jurisdiction “to the fullest extent allowed under the Constitution of the United States.” 42 Pa. Cons. Stat. § 5322(b). Therefore, in its exercise of personal jurisdiction, this Court is constrained only by the Due Process Clause of the United States Constitution, which requires that a defendant has “certain minimum contacts with [the forum state] such that maintenance of the suit does not offend traditional notions of fair play and substantial justice.” O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Requiring “minimum contacts” between the defendant and the forum state gives “fair warning” to a defendant that he or she may be called to defend a lawsuit in that state. See Marten v. Godwin, 499 F.3d 290, 296 (3d Cir. 2007) (quotation omitted).

         Two types of personal jurisdiction comport with these notions of due process: specific and general jurisdiction. Daimler AG v. Bauman, 134 S.Ct. 746 (2014). Specific jurisdiction encompasses cases “in which the suit ‘aris[es] out of or relate[s] to the defendant's contacts with the forum.'” Id. at 754 (citations omitted). General jurisdiction, however, may be exercised by a court when foreign corporations' “affiliations with the State are so ‘continuous and systematic' as to render them essentially at home in the forum State.” Id. (citations omitted). A corporate defendant is usually found to be “at home” in the state of the corporation's place of incorporation or principal place of business. Id. at 760. However, a corporate defendant can sometimes be found to be “at home” in another state where its operations in that state are “so ‘continuous and systematic' as to render [it] essentially at home in the forum State.” Id. at 761 (citation omitted).

         C. Federal Rule of Civil Procedure 12(b)(6)

         A motion filed pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint's factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint must contain “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 upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks omitted) (interpreting Fed.R.Civ.P. 8(a)). Generally, a court considering a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) must ...

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