United States District Court, E.D. Kentucky, Central Division, Lexington
RED HED OIL, INC., doing business as REDI MART NO. 9, et al. Plaintiffs,
THE H.T. HACKNEY CO., et al., Defendants.
MEMORANDUM OPINION & ORDER
M. Hood, Senior U.S. District Judge
things go awry and we know not why. Many times, we have an
inkling about what happened, but we cannot place our finger
on it. And still other times, we can narrow the possibilities
of what caused our misfortune to only a few options. A
teacher finding gum on the floor, for example, can discern
that one of his students must be responsible - even if he
does not know which particular student is at fault. And a
hunter in the woods struck by a pellet when several friends
fire upon a covey of quail flushed from the thicket knows a
co-hunter is to blame - though he might not know which person
had the errant aim.
case presents a similar “whodunit”: Plaintiffs
think one of several possible manufacturers is
responsible their injury, but Plaintiffs cannot say exactly
which Defendant should pay or exactly how Defendants caused
the harm. Instead, Plaintiffs point the finger at several
Defendants in hopes that discovery will unveil the culpable
party. The question for this Court is whether, when only one
Defendant could have caused the injury complained of,
Plaintiffs may pass the pleading stage and access discovery
without identifying which Defendant is responsible and
without specifying how the defendant's products harmed
Plaintiffs. The Court holds that Plaintiffs may not do so.
Thus, for the reasons stated herein, the defendants'
Motion to Dismiss [DE 12] is GRANTED.
FACTUAL AND PROCEDURAL HISTORY
many consumer products, electronic cigarettes have a shelf
life. After a certain amount of time, they go bad. And when
they go bad, e-cigarettes can no longer be used. So when Red
Hed Oil, Inc. (“Red Hed”) failed to sell the
stash of e-cigarettes in its convenience store before they
expired, the company placed the out-of-date products in a
storage room. [DE 1-1 at p. 9, ¶¶19-21]. Defendant
The H.T. Hackney Co. (“Hackney”) - the company
that sold the e-cigarettes to Red Hed - picked up expired
e-cigarettes on a bi-weekly basis. [Id., ¶20].
this time, before Hackney arrived for the pick-up, the
out-of-date e-cigarettes went up in smoke. [Id.,
¶21]. A fire tore through Red Hed's convenience
store and caused more than a quarter-million dollars in
damage. [DE 1-1 at p. 10, ¶30]. Red Hed seeks recovery
from the e-cigarette manufacturers in this products liability
owns and operates the convenience store and gas station in
Berea, Kentucky. [Id. at p. 5, ¶2]. Plaintiff
Federated Mutual Insurance Company (“Federated”)
holds a commercial policy on the store. [Id. at p.
9, ¶¶27-28]. Known as “Redi-Mart, ” the
store sold, among other products, e-cigarettes. [Id.
at pp. 6-9]. Red Hed purchased the e-cigarettes from Hackney,
a distributor and supplier of grocery products. [Id.
at p. 5, ¶4; p. 8, ¶17]. The manufacturing
defendants - Swisher International, Inc.
(“Swisher”), Logic Technology Development LLC
(“Logic”), Spark Industries LLC
(“Spark”), R.J. Reynolds Vapor Company
(“R.J. Reynolds”), NJoy Inc.
(“NJoy”), and Fontem Ventures B.V.
(“Fontem”) - produced e-cigarettes and supplied
them to Hackney. [Id. at p. 8, ¶14]. Hackney
then sold the e-cigarettes to Red Hed. [Id.,
of its sale to Red Hed, Hackney agreed to pick up expired
e-cigarettes on a bi-weekly basis. [Id. at p. 9,
¶20]. Red Hed placed the e-cigarettes in a box that
Hackney collected; Hackney did not provide any additional
instructions. [Id., ¶19]. Red Hed claims it was
never involved in delivery of the e-cigarettes to the
Redi-Mart and did not tamper with or alter the products.
[Id. at p. 9, ¶¶22-23]. The manufacturing
defendants sold their products to Hackney, and Hackney sent
the e-cigarettes to the Redi-Mart. The manufacturing
defendants did not directly sell e-cigarettes to Red Hed.
fire at issue in this case occurred in late April 2016 at the
Berea Redi-Mart. [Id. at p. 9, ¶21]. The blaze
damaged Red Hed's building, equipment, and land,
resulting in $258, 353.42 in insurance payments by Federated
to Red Hed. [Id. at p. 10, ¶30]. Red Hed argues
that expired e-cigarettes, sitting in the storage room
awaiting pickup from Hackney, were defective and sparked the
fire. [Id. at p. 9, ¶21]. The claimed defect in
the e-cigarettes existed at the time of manufacture and was
undiscoverable by Red Hed, according to Plaintiffs'
Complaint. [Id. at p. 9, ¶25].
and Federated filed this products liability lawsuit in March
2017 in Madison County Circuit Court against Hackney and the
manufacturing defendants. [DE 1-1]. Red Hed seeks recovery
from the manufacturing defendants on state-law claims of
negligence, defective manufacture and design, inadequate
warning, breach of express warranty, and breach of implied
warranties. [Id. at pp. 16-22]. Red Hed asserted
similar claims against Hackney. [Id. at pp. 10-14].
Hackney and Spark filed answers in state court. [DE 1-1 at
pp. 25, 39]. Defendant Logic removed the case to federal
court in April 2017 on the basis of diversity jurisdiction
pursuant to 28 U.S.C. §§ 1441 and 1332. [DE 1-1].
R.J. Reynolds and Logic filed answers shortly after removal.
[DE 8; 9]. Before it answered, Swisher filed a Motion to
Dismiss pursuant to Fed.R.Civ.P. 12(b)(6) on May 1, 2017. [DE
12]. After Swisher's motion, NJoy notified the Court that
it filed for Chapter 11 bankruptcy, and the Court stayed this
mater as to NJoy only. [DE 16]. Defendants R.J. Reynolds,
Logic, and Spark then filed motions pursuant to Fed.R.Civ.P.
10(c) to incorporate Swisher's Motion to Dismiss. [DE 18;
19; 20]. Because R.J. Reynolds, Logic, and Spark had already
filed answers, however, they could not move under Rule
12(b)(6) and instead sought judgment on the pleadings
pursuant to Fed.R.Civ.P. 12(c), which applies the same
standard of review as Rule 12(b)(6). Plaintiffs did not
oppose any of the joinder motions.
argue that Plaintiffs' Complaint does not adequately
plead that any Defendant's product caused the fire or
that any product had a defect. [DE 12 at p. 4-8]. Indeed,
according to Defendants, Plaintiffs can only speculate about
the cause of the fire, and they can only speculate that some
e-cigarette was defective.
responded to Defendants' Motion to Dismiss [DE 25], and
Swisher replied [DE 26]. Spark, R.J. Reynolds, and Logic all
moved pursuant to Fed.R.Civ.P. 10(c) to incorporate, join in,
and adopt Swisher's reply to Plaintiffs' response.
[DE 27; 28; 29]. Defendant Fontem then moved under Rule 10(c)
to join Swisher's Motion to Dismiss. [DE 34]. Again,
Plaintiffs did not oppose Defendants' joinder motions.
Defendant Hackney has not joined any motion before the Court
and is thus not affected by this Memorandum Opinion and
the present motion before the Court asks for dismissal for
failure to state a claim as to Defendants Swisher and Fontem
and judgment on the pleadings as to Defendants R.J. Reynolds,
Spark, and Logic. Plaintiffs have asked for oral argument
pursuant to Local Rule 7.1(f). These matters are fully
briefed and ripe for the Court's review.
STANDARD OF REVIEW
initial matter, the parties dispute what standard applies to
Defendants' motion. Plaintiffs urge the Court to apply
the state “notice pleading” standard because they
filed the Complaint in state court. [DE 25]. According to
Plaintiffs, this Court “does not apply the federal
pleading standard” when sitting in diversity
jurisdiction. [DE 25 at p. 2].
is a notice pleading jurisdiction, where the ‘central
purpose of pleadings remains notice of claims and
defenses.'” Pete v. Anderson, 413 S.W.3d
291, 301 (Ky. 2013) (quoting Hoke v. Cullinan, 914
S.W.2d 335, 339 (Ky. 1995)). “Notice pleading”
imposes a less-demanding review of a complaint than the
“plausibility” standard under the federal rules.
See Williams v. Altman McGuire, McClelland & Crum,
P.S.C., No. Civ. 12-131-ART, 2013 WL 28378, at *3 (E.D.
Ky. Jan. 2, 2013). Thus, if Kentucky law applies, Plaintiffs