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Kostmayer Construction LLC v. Port Pipe & Tube Inc.

United States District Court, W.D. Louisiana, Lake Charles Division

November 1, 2017

KOSTMAYER CONSTRUCTION, LLC
v.
PORT PIPE & TUBE, INC.

          MEMORANDUM RULING

          ELIZABETH ERNY FOOTE UNITED STATES DISTRICT JUDGE

         Before the Court are a Motion to Dismiss, or, Alternatively, Motion to Strike, filed by Defendant Port Pipe & Tube, Inc. ("Port Pipe") [Record Document 34] and an Appeal of the Magistrate Judge's Order Granting Plaintiffs Motion for Enlargement of Time Frame for Filing Motion for Class Certification, also filed by Port Pipe [Record Document 28]. The respective parties have filed opposition and reply briefs to the motion and appeal, all of which have been reviewed by the undersigned. For the reasons set forth below, the Motion to Dismiss, or, Alternatively, Motion to Strike is DENIED, and the Magistrate Judge's Memorandum Order of September 30, 2016 [Record Document 27] is AFFIRMED.

         I. BACKGROUND

         On March 28, 2016, Kostmayer Construction, LLC ("Kostmayer") filed a putative class action in the Eastern District of Louisiana ("Complaint") against Port Pipe for violations of the Telephone Consumer Protection Act ("TCPA") as amended by the Junk Fax Prevention Act of 2005 ("JFPA"). [Record Document 1]. Kostmayer alleged it personally received from Port Pipe unsolicited faxes that violated the TCP A, the JFPA, and FCC regulations. [Id. at 9]. Kostmayer also alleged that the unsolicited faxes "caus[ed] Plaintiff and Plaintiff Class to sustain statutory damages, in addition to actual damages, including but not limited to those contemplated by Congress and the FCC." [Id] The complaint did not further explain the alleged damages.

         On June 10, 2016, Port Pipe moved to dismiss the action on two grounds: (1) lack of subject matter jurisdiction because the Complaint did not allege concrete facts that would give rise to standing; and (2) improper venue because the Complaint did not allege that any action giving rise to the claims occurred in the Eastern District of Louisiana. [Record Document 8-1 at 3, 5-6]. In the alternative, Port Pipe moved to transfer the case to the Western District of Louisiana or the Southern District of Texas. [Id. at 7-8]. Kostmayer opposed Port Pipe's motion on both grounds, but subsequently consented to transfer; the case was transferred to this Court on July 7, 2016. [Record Documents 10, 15, and 17].

         On August 18, 2016, Port Pipe filed a Motion for Protective Order Staying Discovery, pending the disposition of its Federal Rule of Civil Procedure 12(b)(1) Motion to Dismiss. [Record Document 20]. On August 22, 2016, Kostmayer filed a motion for an extension of time ("Motion for Enlargement of Time Frame"), requesting thirty days from the disposition of the Motion to Dismiss to move for class certification. [Record Document 22], The Magistrate Judge granted both Port Pipe's Motion for Protective Order Staying Discoveiy and Kostmayer's Motion for Enlargement of Time Frame. [Record Document 27]. In granting Kostmayer's motion, the Magistrate Judge found that, while the motion itself was untimely, "the circumstances surrounding the failure to timely file the motion excuse this inadvertence." [Id. at 3]. Port Pipe appealed the decision of the Magistrate Judge in granting Kostmayer's Motion for Enlargement of Time Frame ("Appeal of the Magistrate's Order"), arguing that the Magistrate Judge did not apply the correct legal standard. [Record Document 28].

         On October 19, 2016, the Court granted Port Pipe's motion to dismiss for lack of subject matter jurisdiction because the Complaint failed to state a concrete injury. [Record Document 30]. The Court dismissed Kostmayer's claims with leave to amend. [Record Document 31]. Kostmayer then filed Plaintiffs First Amended Complaint ("Amended Complaint"), which alleged the following:

Plaintiff wasted valuable time reviewing the fax, time that was taken away from its construction business, and time that it could have otherwise spent performing construction work. Additionally, Defendant's junk faxes tied up the fax line Plaintiff relies on for business use and misappropriated and converted Plaintiffs paper and toner. Further, Plaintiff has suffered an injury, created by Congress, in that it has been deprived of its right to receive the required opt-out notice disclosures on facsimile advertisements governed by the TCP A.

         [Record Document 32 at 3-4]. In response, Port Pipe filed a Motion to Dismiss Amended Complaint, or, Alternatively Motion to Strike ("Second Motion to Dismiss"), claiming that the Amended Complaint still failed to allege a concrete injury and thus that Kostmayer lacked standing to sue. [Record Document 34], In the alternative, Port Pipe asks the Court to strike the class allegations from the Amended Complaint, reiterating the arguments raised in its Appeal of the Magistrate's Order. [Id. at p. 8], II. LAW AND ANALYSIS

         As discussed below, the Court construes one of Port Pipe's arguments in its Second Motion to Dismiss as an argument that the Amended Complaint fails to state a claim upon which relief can be granted (a Rule 12(b)(6) motion), rather than as an argument that Kostmayer lacks standing (properly raised by a Rule 12(b)(1) motion). Additionally, Port Pipe's Motion to Strike overlaps with its Appeal of the Magistrate's Order. Therefore, the Court addresses Port Pipe's arguments in the following manner: (1) Port Pipe's 12(b)(1) Motion to Dismiss; (2) Port Pipe's 12(b)(6) Motion to Dismiss; (3) Port Pipe's 12(f) Motion to Strike and its Appeal of the Magistrate's Order.

         A. Port Pipe's 12(b)(1) Motion to Dismiss

         In its 12(b)(1) motion, Port Pipe argues that Kostmayer has insufficiently pleaded facts that state an actual, concrete injury and thus that Kostmayer does not meet the injury in fact requirement for standing. [Record Document 34-1 at 1]. In opposition, Kostmayer contends that it has pleaded a cognizable injury under the TCP A and the JFPA as well as facts identifying actual, concrete injuries. [Record Document 39 at 9].

         1. Federal Rule of Civil Procedure 12(b)(1) Standard

         Federal Rule of Civil Procedure 12(b)(1) allows a defendant to move for the dismissal of a plaintiffs claims for lack of subject matter jurisdiction. '"A case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case.'" Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998) (quoting Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182, 1187 (2d Cir. 1996)). The plaintiff bears the burden of establishing subject matter jurisdiction. In re FEMA Trailer Formaldehyde Prods. Liab. Litig., 668 F.3d 281, 286 (5th Cir. 2012) (citing Castro v. United States, 560 F.3d 381, 386 (5th Cir. 2009)). To determine whether it has subject matter jurisdiction, the Court can look to "the complaint alone, the complaint supplemented by the undisputed facts as evidenced in the record, or the complaint supplemented by the undisputed facts plus the court's resolution of the disputed facts." Id. at287(citing Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001)).

         A defendant's Rule 12(b)(1) motion is a "facial attack" if it is not supplemented with affidavits, testimony, or other evidentiary materials. Pater son v. Weinberger, 644 F.2d 521, 523 (5 th Cir. 1981). In considering a "facial attack, " the Court "is required merely to look to the sufficiency of the allegations in the complaint because they are presumed to be true. If those jurisdictional allegations are sufficient the complaint stands." Id. Because Port Pipe submitted no evidence with its Rule 12(b)(1) motion, it has raised a "facial attack;" thus, the Court need only determine whether the Amended Complaint sufficiently alleges the necessary jurisdictional facts.

         2. Standing Requirement for Federal Subject Matter Jurisdiction

         The jurisdiction of federal courts is limited to "cases" and "controversies" that are "amenable to, and resolved by, the judicial process." Steel Co. v. Citizens for a Better Env 't, 523 U.S. 83, 102 (1998) (citing Muskrat v. United States, 219 U.S. 346, 356-57 (1911)). For acase to be justiciable, the plaintiff must have standing. Id. (citing Whitmore v. Arkansas, 495 U.S. 149, 155 (1990)). Standing requires that the plaintiff have: "(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (citing Lujan v. Defs. Of Wildlife, 504 U.S. 555, 560-61 (1992); Friends of the Earth v. Laidlaw Envt'l Servs., Inc., 528 U.S. 167, 180-81 (2000)). At the pleading stage, the plaintiff must "clearly . . . allege facts demonstrating each element." Id. (citing Warth v. Seldin, 422 U.S. 490, 518 (1975)). Here, the parties dispute whether Kostmayer has adequately alleged that it suffered an injury in fact. [Record Documents 34-1 at 4-8 and 39 at 8-16].

         When alleging injury caused by the violation of a statutory right, a plaintiff must allege an injury that is both "concrete" and "particularized." Id. at 1549. A particularized injury is one that "affects the plaintiff in a personal and individual way." Id. at 1548 (citing Lujan, 504 U.S. at 560 n.l). A concrete injury is one that exists, whether tangible or intangible. Id. at 1548-49. Thus, a plaintiff cannot survive a 12(b)(1) dismissal through "[a]negations of a bare procedural violation, divorced from any concrete harm." Id. at 1549 (citing Summers v. Earth Island Inst.,555 U.S. 488, 490 (2009)). While a mere procedural violation is insufficient, the Supreme Court has cautioned that "[t]his does not ...


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