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In re Lac Megantic Train Derailment Litigation

United States District Court, D. Maine

September 28, 2016

IN RE LAC MÈGANTIC TRAIN DERAILMENT LITIGATION

          ORDER ON THE PLAINTIFFS' MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT

          JON D. LEVY U.S. DISTRICT JUDGE

         This cases arises from a July 6, 2013, train derailment and explosion in Lac Mégantic, Quebec, as discussed in greater detail in this court's Order on Canadian Pacific Railway Company's Amended Motion to Dismiss. The derailment spawned litigation in both Illinois and Texas, with multiple plaintiffs (the “Plaintiffs”) asserting claims for negligence and wrongful death against a multitude of defendants, all of whom have since settled with the exception of Canadian Pacific Railway Company (“CP”).

         The cases which comprised the Illinois and Texas litigation are all now before this court, having been ordered transferred to the District of Maine by me pursuant to the authority established in 28 U.S.C. § 157(b)(5).[1] On April 26, 2016, all thirty-nine cases were consolidated into the instant case, and four fully-briefed substantive motions (the “Common Motions”) were deemed filed as to all parties. ECF No. 1 at 2. One of the Common Motions was the Plaintiffs' Motion for Leave to File a Second Amended Complaint (ECF No. 3), which was originally filed in December 2015 by the plaintiffs in Roy v. Western Petroleum Co., et al., 1:14-cv-00113, ECF No. 248; and Grimard v. Rail World, Inc., et al., 1:15-cv-00250, ECF No. 83. Oral argument on the Common Motions, including the Plaintiffs' Motion for Leave to File a Second Amended Complaint, took place on July 13, 2016.

         In their motion, the Plaintiffs seek to add CP's corporate parent and affiliates as defendants. For the reasons explained below, I deny the motion.

         I. LEGAL STANDARD

         Pursuant to Federal Rule of Civil Procedure 15(a)(2), the Court “should freely give leave [to amend] when justice so requires.” Accordingly, leave to amend should be granted where there is no “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility....” Foman v. Davis, 371 U.S. 178, 182 (1962); see also Chiang v. Skeirik, 582 F.3d 238, 244 (1st Cir. 2009). If leave to amend is sought before discovery is complete and neither party has moved for summary judgment, an amendment will be denied if the proposed amendment fails to state a claim and is, therefore, futile. See Hatch v. Dept. for Children, Youth and Their Families, 274 F.3d 12, 19 (1st Cir. 2001). “Futility” is gauged by the criteria of Rule 12(b)(6). Id.

         To survive a Rule 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In considering the merits of a motion to dismiss, the Court must accept as true all well-pleaded factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor. Gargano v. Liberty Intern. Underwriters, Inc., 572 F.3d 45, 48 (1st Cir. 2009). The Court must examine the factual content of the complaint and determine whether those facts support a reasonable inference “that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. The complaint must contain “sufficient factual matter . . . to state a claim to relief that is plausible on its face.” Id. (quoting Twombly, 550 U.S. at 570) (internal quotations omitted). “If the factual allegations in the complaint are too meager, vague, or conclusory to remove the possibility of relief from the realm of mere conjecture, the complaint is open to dismissal.” Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011) (internal citations omitted).

         II. ANALYSIS

         The proposed second amended complaint adds CP's Canadian parent corporation, Canadian Pacific Railway Limited (“CPL”), as a defendant. ECF No. 3-1 at 5, ¶ 2. CPL is headquartered in Calgary, Alberta, Canada. Id. The proposed second amended complaint also adds as defendants CP's three U.S. affiliates: the Soo Line Railroad Company (“CP-Soo”), which is incorporated in Minnesota; the Delaware and Hudson Railway Company, Inc. (“CP-D&H”), which is also incorporated in Minnesota; and the Dakota, Minnesota & Eastern Railroad Company (“CP-DM&E”), which is incorporated in Delaware. Id.

         The proposed second amended complaint also contains two new pertinent allegations: that CPL operates the four subsidiary corporations as a common enterprise under the “Canadian Pacific” brand, id. at 26, ¶ 156, and, that CPL “directly and/or through its subsidiaries, operates a transportation, logistics, and management company which maintains over 14, 000 miles of track extending throughout Canada and into the U.S. industrial centers of Chicago, Newark, Philadelphia, Washington, New York City, and Buffalo[, ]” id. at 26, ¶ 155; see also Id. at 5-6, ¶ 2.

         Throughout the proposed second amended complaint, “CP” is treated as including all five companies, and therefore, the remaining factual allegations contained in the proposed amendment relate to all of the CPL affiliates rather than any one company. See Id. at 26, ¶ 156. Thus, for example, alleging that “CP transported seventy-two DOT-111 tankers filled with mislabeled volatile crude oil from New Town, North Dakota to Cote Saint-Luc[, ]” id. at 27, ¶ 159, the proposed second amended complaint treats CPL, CP, CP-Soo, CP-D&H, and CP-DM&E as a single entity in the allegation. This is true for every allegation levied against “CP” in the proposed second amended complaint. See Id. at 26-35, ¶ ¶ 155 - 175.

         The proposed second amended complaint's treatment of all of the CPL-related entities as a single entity does not satisfy the Iqbal pleading standard because that treatment is not supported by any facts beyond the bare conclusory allegations that CPL “operates a transcontinental railway . . . through its subsidiaries[, ]” ECF No. 3-1 at 5, ¶ 2 (emphasis added); see also Id. at 26, ¶ 155, and that it operates such a railway “as a common enterprise under the ‘Canadian Pacific' brand, ” id. at 26, ¶ 156. Absent from the proposed amendment are factual allegations concerning CPL's corporate governance and operations, or that of its subsidiaries, or any other facts that would support a reasonable inference that the common enterprise assertion is true. See ECF No. 3-1.

         I also note that the Plaintiffs' Motion for Leave to File Second Amended Complaint contains no discussion of the common enterprise issue. See ECF No. 3. Instead, the Plaintiffs assert that “further investigation since the filing of the original complaint has revealed additional parties whom Plaintiff[s] believe[ ] are or may be responsible” for the derailment and explosion. Id. at 4. This assertion does not shed light on how the facts alleged in the proposed second amended complaint support the conclusion that CPL and its affiliates are in fact a common enterprise. The Plaintiffs also argue that their proposed second amendment is not futile because they have alleged that “Defendants breached [their] duty to Plaintiff[s] by taking certain actions inconsistent with [their] knowledge of . . . the known risks associated with DOT-111 tank cars or the explosive nature of [Bakken Formation oil].” Id. at 5. Yet the proposed second amended complaint does not allege which defendant or defendants had such knowledge, nor how their relationship to CPL constituted a common enterprise.

         Furthermore, at the July 13, 2016 hearing, the Plaintiffs argued that the purpose of the proposed amendment was “to capture those affiliates that we subsequently learned were the ones operating the train and join them in the complaint[, ]” ECF No. 25 at 82:2-4, and that “the allegations are that they acted as a common enterprise because Soo Line was the vehicle through which Canadian Pacific operated this train[, ]” id. at 83:3-5. Yet the proposed second amended complaint ...


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