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Jones v. Swepi L.P.

United States District Court, W.D. Pennsylvania

January 16, 2020

ROSA JONES, Plaintiff,
v.
SWEPI L.P. et al., Defendants.

          OPINION

          Mark R. Hornak, Chief United States District Judge

         Third-Party 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.

         I. FACTS & PROCEDURAL HISTORY

         The 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 agreement.

         Jones's 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.)

         Later, 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.

         II. LEGAL STANDARD

         A claim 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." Id.

         The 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 immunity.

         III. DISCUSSION

         In 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.

         The 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.

         A. Choice of Law

         In a 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 ...


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