United States District Court, W.D. Pennsylvania
R. Hornak, Chief United States District Judge
Defendant Sun Energy Services L.L.C., doing business as Deep
Well Services ("Deep Well"), moved to dismiss
Third-Party Plaintiff Consolidated Rig Works L.P.'s
("Consolidated Rig") Third-Party Complaint. Deep
Well's Motion to Dismiss ultimately depends on which
state's law applies to a contract it signed with
Consolidated Rig. The Parties' contract included a choice
of law provision-selecting Texas law. In almost every case, a
court should give effect to a choice of law provision. Deep
Well argues that this is the rare one, when the Court should
decline to enforce the Parties' choice of law provision.
It argues that Pennsylvania law should apply instead. The
Court agrees. Because the choice of law provision conflicts
with Pennsylvania's fundamental public policy-here, its
Workers' Compensation Act-the provision is unenforceable.
And Pennsylvania has a materially greater interest in
protecting workers injured within its borders. Thus,
Pennsylvania law applies. Under that law, Deep Well is immune
from liability stemming from personal injury lawsuits brought
by its employees. Deep Well's Motion to Dismiss (ECF No.
65), is GRANTED.
FACTS & PROCEDURAL HISTORY
main issues in this case are the Estate of Marc Jones's
wrongful death and other tort claims against several
defendants, including Consolidated Rig. This motion to
dismiss, however, does not directly implicate Jones's
claims. Instead, Deep Well's Motion to Dismiss is
something of a side dish to this wrongful death lawsuit's
main course, so the Court will refrain from fully detailing
all of Jones's allegations. Only three (3) facts are
relevant to the Court's task today. First, Deep Well
employed Jones at the time of his death. Second, Jones died
at a worksite in Pennsylvania. Third, Consolidated Rig sold a
hydraulic jack, which allegedly played a role in Jones's
death, to Deep Well under a contract that included a choice
of law provision-selecting Texas law to interpret the
estate first filed its Complaint in the Court of Common Pleas
of Allegheny County, Pennsylvania. (ECF No. 1-2.) That
Complaint named Swepi L.P. ("Swepi"), Shell Energy
Holding Group L.L.C. ("Shell Energy"), and two (2)
individuals as defendants. (Id.) Swepi and Shell
Energy later removed the case to this Court. (ECF No. 1.)
After voluntarily dismissing its claims against the two (2)
individual defendants, Jones's estate filed an Amended
Complaint. (ECF Nos. 19 and 36.) That Amended Complaint kept
Swepi and Shell Energy as defendants and added Consolidated
Rig as a third defendant. (ECF No. 36.)
Consolidated Rig impleaded Jones's employer, Deep Well.
(ECF No. 58.) Consolidated Rig's Third-Party Complaint
alleged that Deep Well contracted to indemnify it when
Consolidated Rig sold the hydraulic jack to Deep
Well-equipment allegedly involved in Jones's death. That
contract, Consolidated Rig argues, should be interpreted
using Texas law-the state named in the contract's choice
of law provision. Deep Well moved to dismiss Consolidated
Rig's Third-Party Complaint under Federal Rule of Civil
Procedure 12(b)(6). (ECF No. 65.) Deep Well's argument,
in sum and substance, is that Pennsylvania law, not Texas,
applies here. And as Jones's employer, Deep Well argues
that it is immune from liability for his workplace injury
under Pennsylvania's Workers' Compensation Act.
Consolidated Rig and Deep Well fully briefed the relevant
issues. (ECF Nos. 66, 72, 73, and 76.) And the Court heard
oral argument on the motion. (ECF No. 86.) The Court now
decides Deep Well's Motion to Dismiss.
may be dismissed for "failure to state a claim upon
which relief can be granted." Fed.R.Civ.P. 12(b)(6). Our
Supreme Court's decision in Ashcroft v. Iqbal
held that "[t]hreadbare recitals of the elements of a
cause of action, supported by mere conclusory
statements" are not enough to survive a Rule 12(b)(6)
motion. 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007)). Instead, to
survive a motion to dismiss, the plaintiffs factual
allegations must "raise a right to relief above the
speculative level" by stating a plausible claim for
relief. Twombly, 550 U.S. at 555. This plausibility
standard is not a "probability requirement."
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 556). Yet it requires "more than a sheer
possibility that a defendant has acted unlawfully."
Third Circuit has broken the Iqbal and
Twombly pleading standard into a three-part
framework. First, the Court must identify the elements of the
claims. Malleus v. George, 641 F.3d 560, 563 (3d
Cir. 2011). Second, the Court strikes conclusory allegations
from the complaint. Id. Third, the Court looks at
the remaining "well-pleaded" allegations in the
complaint and asks whether all of the elements identified in
the first step of the framework are sufficiently alleged.
Id. Along the same lines, the Third Circuit has held
that the complaint must "show" that the plaintiff
is entitled to relief based on the facts that the Court must
presume as true. See Fowler v. UPMC Shadyside, 578
F.3d 203, 210-11 (3d Cir. 2009). In the context of a Rule
12(b)(6) motion based on Workers' Compensation Act
immunity, the movant must show that it is entitled to that
their briefs and at oral argument, both Consolidated Rig and
Deep Well argued that this case presents a conflict of laws
question. Consolidated Rig argues that the Court should give
effect to the contract's choice of law provision, and
therefore apply Texas law. Deep Well argues that the choice
of law provision is unenforceable and that the Court should
therefore apply Pennsylvania law.
Court's discussion proceeds in two (2) parts. First, the
Court decides whether Pennsylvania or Texas law governs
Consolidated Rig's indemnity claim. Second, the Court
decides whether Consolidated Rig's indemnity claim can
stand under the applicable state's law. The Court
concludes that Pennsylvania law applies, and Consolidated
Rig's indemnity claim is barred by Pennsylvania's
Workers' Compensation Act. So Deep Well's Motion to
Dismiss is granted.
Choice of Law
diversity action such as this, a federal court must apply the
forum state's choice of law rules. See Klaxon Co. v.
Stentor Elec. Mfg. Co.,313 U.S. 487, 496-97 (1941). So
Pennsylvania's choice of ...