United States District Court, D. Delaware
M. Seaman, ABRAMS & BAYLISS LLP, Wilmington, DE Jon C.
Weingrat, Jonathan L. Greenbalt, Keith R. Palfin, SHEARMAN
& STERLING, Washington DC Attorneys for Plaintiff Arcelik
Moskow-Schnoll, BALLARD SPAHR LLP, Wilmington, DE Peter L.
Haviland, Scott S. Humphreys, BALLARD SPAHR LLP, Los Angeles,
CA Attorneys for Defendant E.I. du Pont De Nemours and
U.S. District Judge
Arcelik A.§. ("Arcelik") sued Defendant E.I.
du Pont de Nemours and Company ("DuPont"), seeking
damages related to Arcelik's recall of its faulty
clothing dryers sold to the public. (D.I. 29 at 1; D.I. 1)
Pending before the Court is DuPont's renewed motion to
dismiss Arcelik's amended complaint under Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim and
Rule 12(b)(7) for failure to join foreign non-parties Epcos
AG and/or Epcos India as necessary and indispensable parties.
(D.I. 28) The Court will grant in part and deny in part
is a Turkish company. (D.I. 1 ¶ 8) DuPont is a Delaware
corporation. (D.I. 1 ¶ 9) Arcelik manufactured electric
tumble dryers for drying clothes that used capacitors
containing DuPont's "Zytel" product, which is a
plastic resin having certain electrical insulation
properties. (D.I. 1 ¶ 2-3) A number of these dryers
caught fire in the homes of customers, "subjecting
Arcelik to significant remediation expenses."
(Id. ¶¶ 1-3) Arcelik alleges that the
cause of the fires was defects in DuPont's Zytel.
(Id.) Arcelik purchased the capacitors containing
the allegedly defective batches of Zytel from a third-party
German manufacturer, Epcos AG ("Epcos").
(Id. ¶ 16) In turn, Epcos bought those Zytel
batches from DuPont and its global subsidiaries.
(Id. ¶ 17)
initially asserted six claims against DuPont: (1) negligent
misrepresentation; (2) fraudulent misrepresentation; (3)
breach of implied warranty; (4) violation of the Delaware
Consumer Fraud Act; (5) negligent manufacture of a defective
product; and (6) tortious interference with a contract
between Arcelik and Epcos AG. (See D.I. 1
¶¶ 103-10) The Court granted DuPont's motion to
dismiss Arcelik's breach of implied warranty claim with
prejudice and dismissed all of the other claims without
prejudice, due to Arcelik's failure to "adequately
allege agency relationships between DuPont and any entities
under its direction or control." (D.I. 16 at 6) The
Court did "not decid[e] . .. whether or not the facts
currently in Plaintiffs complaint would be sufficient to
state claims if sufficient agency relationship(s) were
alleged." (Id.) The Court granted Arcelik leave
to file an amended complaint and directed the parties to
conduct limited discovery "regarding the corporate
relationships between DuPont and its subsidiaries, and
regarding the involvement of the Epcos entities (Epcos AG and
Epcos India)" in the events relating to the allegations
in the complaint. (Id. at 2, 6)
filed an amended complaint, reasserting the five claims that
had been dismissed without prejudice. (D.I. 19) In the
amended complaint, Arcelik added allegations regarding the
agency relationship between DuPont and its subsidiaries,
including that DuPont's global subsidiaries, E.I. DuPont
India Private Ltd. ("DuPont India") and E.I. DuPont
China Holding Co. Ltd. ("DuPont China"),
"acted under the direction and control of DuPont and
were agents of DuPont at all relevant times."
(Id. ¶ 17) Arcelik contends that Epcos bought
the purportedly defective Zytel at issue from DuPont India,
which acted as a sales agent for and under the control and
direction of DuPont. (Id. ¶ 18) While
acknowledging DuPont's representation in this litigation
that the Zytel at issue was manufactured at DuPont China,
Arcelik emphasizes that Zytel is still a DuPont product
manufactured under the direction and control of DuPont at
various manufacturing sites. (Id. ¶ 19)
parties then agreed that instead of conducting limited
discovery along the lines of what the Court had permitted,
DuPont would accept, for purposes of a further motion to
dismiss, that DuPont China and DuPont India are its agents.
(D.I. 27) The parties further agreed that DuPont would file a
renewed motion to dismiss on the limited questions of (1)
whether Epcos AG and/or Epcos India are necessary and
indispensable parties whose joinder would require dismissal
of Arcelik's amended complaint, and (2) assuming that
DuPont's subsidiaries are agents of DuPont, whether
Arcelik has stated any claim upon which relief may be granted
in its amended complaint. (See id. at 3) The parties
have completed briefing on DuPont's renewed motion. (See
D.I. 29, 31, 34)
Motion to Dismiss for Failure to State a Claim
a motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) requires the Court to accept as true all material
allegations of a complaint. See Spruill v. Gillis,
372 F.3d 218, 223 (3d Cir. 2004). "The issue is not
whether a plaintiff will ultimately prevail but whether the
claimant is entitled to offer evidence to support the
claims." In re Burlington Coat Factory Sec.
Litig., 114 F.3d 1410, 1420 (3d Cir. 1997) (internal
quotation marks omitted). Thus, the Court may grant such a
motion to dismiss only if, after "accepting all
well-pleaded allegations in the complaint as true, and
viewing them in the light most favorable to plaintiff,
plaintiff is not entitled to relief." Maio v. Aetna,
Inc., 221 F.3d 472, 481-82 (3d Cir. 2000) (internal
quotation marks omitted).
"[t]o survive a motion to dismiss, a civil plaintiff
must allege facts that 'raise a right to relief above the
speculative level on the assumption that the allegations in
the complaint are true (even if doubtful in fact).'"
Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir.
2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007) (internal citations and quotation marks
omitted)). A claim is facially plausible "when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged." Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). "The complaint must state
enough facts to raise a reasonable expectation that discovery
will reveal evidence of [each] necessary element" of a
plaintiff s claim. Wilkerson v. New Media Tech. Charter
Sch. Inc., 522 F.3d 315, 321 (3d Cir. 2008) (internal
quotation marks omitted).
Court is not obligated to accept as true "bald
assertions, " Morse v. Lower Merion Sch. Dist.,
132 F.3d 902, 906 (3d Cir. 1997) (internal quotation marks
omitted), "unsupported conclusions and unwarranted
inferences, " Schuylkill Energy Res., Inc. v.
Pennsylvania Power & Light Co., 113 F.3d 405, 417
(3d Cir. 1997), or allegations that are "self-evidently
false, " Nami v. Fauver, 82 F.3d 63, 69 (3d
Motion to Dismiss for Failure to Join a Necessary and
to Federal Rule of Civil Procedure 12(b)(7), a party may seek
dismissal for failure to join a party under Rule 19. In
deciding whether to grant such a dismissal, the Court must
first determine whether the party is a necessary party under
Rule 19(a). See generally Refractories Co. v. First State
Ins. Co., 500 F.3d 306, 312 (3d Cir. 2007). A party is
necessary if, in the absence of the party, (1) complete
relief cannot be afforded to the present parties, (2) the
disposition of the action would impair the party's
ability to protect its own interest, or (3) any of the
present parties would be subject to a substantial risk of
multiple or inconsistent obligations. See Fed. R.
Civ. P. 19(a). If the party is necessary under Rule 19(a),
the party must be joined, if joinder is feasible. If joinder
is necessary, but infeasible, the Court must then determine
whether the party is "indispensable" under Rule
19(b). This inquiry requires a balancing of the interests of
the plaintiff, the defendant, the absent party, the courts,
and the public. See Feriozzi Co. v. Ashworks, Inc.,
130 Fed.Appx. 535, 538-39 (3d Cir. 2005) (citing
Provident Tradesmens Bank & Trust Co. v.
Patterson, 390 U.S. 102, 109-11 (1968))). If an absent
party is indispensable, the Court must dismiss the action.
See Gen. Refractories Co., 500 F.3d at 312.
movant "bears the burden of showing why an absent party
should be joined under Rule 19." Disabled in Action
of Pa. v. Se. Pa. Transp. Auth., 635 F.3d 87, 97 (3d
Cir. 2011); see also Camacho v. Major League
Baseball, 297 F.R.D. 457, 461 (S.D. Cal. 2013);
Cephalon, Inc. v. Watson Pharm., Inc., 629 F.Supp.2d
338, 346 (D. Del. 2009). "When making a Rule 19
determination, the Court may consider evidence outside the
pleadings." Jurimex Kommerz Transit G.m.b.H. v. Case
Corp., 201 F.R.D. 337, 340 (D. Del. 2001).
Epcos AG And Epcos India Are Not Necessary Parties
argues that the "Court cannot grant complete relief here
without Epcos AG and Epcos India." (D.I. 29 at 6) In
DuPont's view, because "Epcos India purchased Zytel
as a raw material and then allegedly used it as a component
part in its manufacture of electrical capacitors that its
German affiliate, Epcos AG, sold to Arcelik, . . . this case
implicates the raw material/component part supplier defenses,
which cannot be litigated without Epcos." (Id.
6-7) (citing Cropper v. Rego Distribution Ctr.,
Inc., 542 F.Supp. 1142, 1156 (D. Del. 1982) ("It is
well established that a manufacturer who merely supplies a
component part subsequently assembled by another in a manner
creating a dangerous condition is not liable to one injured
thereby.")). To DuPont, the determination of whether
Zytel was defective "turns, at least in part, on the
purpose for which" Epcos bought Zytel, "the extent
of DuPont India's involvement, if any, in Epcos's
decision, as well as factual issues concerning Epcos's
incorporation of [Zytel] in its manufacture of the
capacitors." (Id. 6-7)
Court disagrees with DuPont. The raw material/component part
supplier defense is not implicated where the raw material or
component is itself alleged to be defective. See Apperson
v. E.I. du Pont de Nemours & Co.,41 F.3d 1103, 1106
(7th Cir. 1994) ("Strict liability may extend to
manufacturers of component parts for injuries caused by
design or manufacturing defects in the component part
itself"); Restatement (Second) of Torts § 402A,
cmt. p (1965) ("If for example, raw coffee beans are
sold to a buyer who roasts and packs them for sale to the
ultimate consumer, it ...