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Lane v. BP p.l.c.

United States District Court, N.D. Oklahoma

July 21, 2017

STEPHEN D. LANE AND RACHEL L. LANE; individually, and as parents and next of kin of C.R.L. and N.J.L., minor children; Plaintiffs,
v.
BP p.l.c.; MARATHON OIL CORPORATION; MARATHON PETROLEUM CORPORATION; and KINDER MORGAN, INC., Defendants.

          OPINION AND ORDER

          TERENCE KERN UNITED STATES DISTRICT JUDGE.

         Before the Court are (1) Defendant BP p.l.c.'s Motion to Reconsider (Doc. 84); (2) Defendant BP p.l.c.'s Motion to Strike Portions of the Amended Complaint (Doc. 87); (3) Defendant Kinder Morgan, Inc.'s Motion to Strike Portions of the Amended Complaint (Doc. 89); (4) Defendant BP p.l.c.'s Partial Motion to Dismiss (Doc. 88); (5) Defendant Kinder Morgan, Inc.'s Partial Motion to Dismiss (Doc. 90); and (6) Defendants Marathon Oil Corporation and Marathon Petroleum Corporation's Partial Motion to Dismiss (Doc. 92).

         I. Background

         Plaintiffs Stephen D. Lane, Rachel L. Lane, and their children, C.R.L. and N.J.L., purchased certain real property in Creek County, Oklahoma (the “Property”). On June 24, 2015, Plaintiffs filed a Petition in the District Court of Creek County, Oklahoma, alleging claims of negligence, nuisance, unjust enrichment, strict liability, and fraud, among others, against Defendants BP, p.l.c. (“BP”), Marathon Oil Corporation, Marathon Petroleum Corporation, and Kinder Morgan, Inc. (collectively, “Operational Defendants”) and several individuals and companies who allegedly were prior interest owners and predecessors of title to the Property (collectively, “Non-Operational Defendants”). Plaintiffs allege the Operational Defendants formerly operated an oil refinery and “tank farm” on the Property and that they abandoned such refinery “without assuring their operations had not and would not affect the environment or the persons and property” and “covered up and buried refinery products and chemicals” without notice to Plaintiffs. (Am. Compl. ¶ 7.) On September 14, 2015, Defendant Kinder Morgan, Inc. (“Kinder Morgan”) removed the case to this Court.

         On September 28, 2016, the Court entered an Opinion and Order (Doc. 74) (“9/28/16 Opinion and Order”) (1) denying Plaintiffs' Motion to Remand and dismissing the Non-Operational Defendants as fraudulently joined; (2) denying BP's Motion to Dismiss for insufficient service of process pursuant to Federal Rule of Civil Procedure Rule 12(b)(5) (“Rule 12(b)(5)”); and (3) granting BP's Motion to Dismiss pursuant to Federal Rule of Civil Procedure Rule 12(b)(6) (“Rule 12(b)(6)”) with respect to Plaintiffs' negligence per se, private nuisance, strict liability, and fraud claims. The Court's 9/28/16 Opinion and Order granted leave for Plaintiffs to amend their claims for negligence per se, strict liability, and fraud. On October 12, 2016, Plaintiffs filed an Amended Complaint (Doc. 76). On October 26, 2016, BP filed a Motion to Reconsider the denial of BP's Motion to Dismiss pursuant to Rule 12(b)(5). On November 4, 2016, BP filed a Motion to Strike Portions of the Amended Complaint and a Partial Motion to Dismiss. On November 7, 2016, Kinder Morgan also filed a Motion to Strike Portions of the Amended Complaint and a Partial Motion to Dismiss adopting and supplementing BP's Motion to Dismiss. On November 7, 2016, Defendants Marathon Oil Corporation and Marathon Petroleum Corporation (collectively, “Marathon Defendants”) filed a Partial Motion to Dismiss adopting and supplementing the Motions to Dismiss filed by BP and Kinder Morgan.

         II. BP's Motion to Reconsider

         BP seeks reconsideration of the Court's denial of its motion to dismiss for insufficient service of process under Federal Rule of Civil Procedure 12(b)(5). Plaintiffs attempted to serve BP America, Inc., which was identified on BP's 2014 Annual Report as its agent in the United States, although process was addressed to “BP America Production Company.” While BP disputed that either BP America, Inc. or BP Production Company was its designated service agent, BP did not identify its service agent in the United States, leaving the Court unable to determine how closely Plaintiffs' attempt came to perfecting service of process on BP. Given the information before it, the Court found Plaintiffs' service attempt had a reasonable probability of affording BP with notice and therefore was in substantial compliance with the statutory scheme, as permitted under Graff v. Kelly, 814 P.2d 489 (Okla. 1991).

         In its motion for reconsideration, BP does not point to any intervening change in the controlling law or new evidence previously unavailable to warrant reconsideration. Rather, BP now informs the Court that it does not have a service agent in the United States and contends that it must be served abroad in compliance with the Hague Convention.[1] BP concedes that its 2014 Annual Report designated BP America, Inc., as its agent for inquiries regarding the report but argues that BP America, Inc., is at most its “general agent, ” which BP contends is insufficient to be considered an agent for service of process.

         BP relies primarily on Hukill v. Okla. Native Am. Domestic Violence Coalition, 542 F.3d 794 (10th Cir. 2009) and Graff, both of which the Court considered and cited in its 9/28/16 Opinion and Order. BP contends the Court misapprehended the controlling law as set forth in those cases because Graff and Hukill, as well as Ferguson Enterprises, Inc. V. H. Webb Enterprises, Inc., 13 P.3d 480 (Okla. 2000), stand for the proposition that actual notice of the lawsuit to the defendant is not sufficient to satisfy the Oklahoma statutory scheme. However, the Court's decision in the 9/28/16 Opinion and Order was not based on BP's having received actual notice of this proceeding. Rather, the Court found that Plaintiffs' attempted service was in substantial compliance with Oklahoma's statutory scheme, which is sufficient under Graff and Hukill. As noted in Hukill, “[t]he adopted test requires that under all the circumstances present in a case there be a reasonable probability the service of process employed apprizes its recipient of the plaintiff's pressed demands and the result attendant to default.” Hukill, 542 F.3d at 799 (citing Vance v. Fed. Nat'l Mortgage Ass'n, 988 P.2d 1275, 1279-80 (Okla. 1999)) (emphasis in original).

         BP cites Corraro v. Moody International for its argument that BP must be served abroad. However, the court in Corraro noted that “in lieu of service abroad, the Due Process Clause of the Fourteenth Amendment requires service on a domestic agent that complies with the laws of the forum state.” Corraro v. Moody Int'l, No. 11-CV-0455-CVE-PJC, 2012 U.S. Dist. LEXIS 103896, at *7 (N.D. Okla. July 26, 2012) (emphasis in original). BP has not pointed to any other cases warranting a change in the Court's determination that Plaintiffs substantially complied with the statutory scheme. Therefore, the Court will not vacate its decision denying BP's motion to dismiss for insufficient service of process.

         III. BP's and Kinder Morgan's Motions to Strike

         BP and Kinder Morgan contend portions of Plaintiffs' Amended Complaint should be stricken. Specifically, BP and Kinder Morgan argue that (1) the Non-Operational Defendants were improperly named and should be stricken, and (2) Plaintiffs' claims against the Operational Defendants for private nuisance and against all defendants for declaratory judgment/indemnification/contribution should be stricken.

         Rule 12(f) of the Federal Rules of Civil Procedure permits “any redundant, immaterial, impertinent or scandalous matters” to be stricken from a pleading. “Striking a pleading or part of a pleading is a drastic remedy and because a motion to strike may often be made as a dilatory tactic, motions to strike under Rule 12(f) generally are disfavored.” Oilfield Improvements, Inc. v. Coston, No. 10-CV-577-TCK-TLW, 2012 WL 1752994, at *1 (N.D. Okla. May 15, 2012) (citing Sai Broken Arrow C, LLC v. Guardian Emergency Vehicles, Inc., No. 09-CV-0455-CVE-FHM (N.D. Okla. Jan. 8, 2010) (internal citation omitted)); see 5C Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1382 (3d. ed. 2012) (noting that “because federal judges have made it clear . . . that Rule 12(f) motions to strike . . . are not favored, often being considered purely cosmetic or ‘time wasters, ' there appears to be general judicial agreement, as reflected in the extensive case law on the subject, that they should be denied unless that the challenged allegations have no possible relation or logical connection to the subject matter of the controversy and may cause some form of significant prejudice to one or more of the parties to the action”).

         A. Re-Joinder of Non-Operational Defendants

         The 9/28/16 Opinion and Order dismissed the Non-Operational Defendants because Kinder Morgan had shown “with complete certainty” that Plaintiffs could not recover against the Non-Operational Defendants on (1) their claim of declaratory judgment/indemnity/contribution or (2) their proposed claim of constructive fraud. With respect to the declaratory judgment/indemnity/contribution claim, Plaintiffs had no possibility of recovery because they could point to no actual dispute or demand from any third party that would potentially expose Plaintiffs to liability. In the absence of any such underlying dispute, a declaratory judgment or judgment of indemnification or contribution would constitute an impermissible advisory opinion. Accordingly, the Court found the Non-Operational Defendants were fraudulently joined and dismissed them without prejudice.

         In the Amended Complaint, Plaintiffs again named the dismissed Non-Operational Defendants, re-asserting and amending their original claims. (See, e.g., Am. Compl. ¶¶ 9, 12 (newly alleging that the Non-Operational Defendants are liable as successors in ownership to the Operational Defendants).) Plaintiffs explained in a footnote to the Amended Complaint that they re-alleged their claims against the Non-Operational Defendants in order to preserve them for review and to avoid any assertion of waiver or abandonment. (Id. at ¶ 14 n.5.) Plaintiffs apparently interpreted the Court's dismissal as requiring them to re-assert and amend their claims against the Non-Operational Defendants or risk waiving their right to appeal or assert claims against the Non-Operational Defendants. Contrary to Plaintiffs' contention, the “without prejudice” designation did not constitute leave to re-assert the same allegations against the Non-Operational Defendants. Rather, the Court recognized the possibility that if Plaintiffs find themselves subject to liability in a future dispute, Plaintiffs may seek to assert their claim of declaratory judgment/indemnity/contribution against the Non-Operational Defendants and dismissed those defendants without prejudice to any claims that may arise against those defendants in the future.

         While improper, the re-joining of the Non-Operational Defendants could have resulted from a misinterpretation of the 9/28/16 Opinion and Order and out of an abundance of caution to ensure Plaintiffs preserved any right to seek review. Accordingly, the Court does not find that it was “impertinent” to have re-joined the Plaintiffs. Nor have BP and Kinder Morgan shown that they are significantly prejudiced by the re-assertion of claims against the Non-Operational Defendants.[2]Nevertheless, the Non-Operational Defendants are not properly joined here for the reasons set forth in the 9/28/16 Opinion and Order. The Non-Operational Defendants were dismissed based on fraudulent joinder, and the re-assertion of claims against them, even if made solely to preserve Plaintiffs' right to seek review of the Court's decision, necessarily destroys complete diversity of citizenship between the parties. The amendment of Plaintiffs' allegations with respect to the Non-Operational Defendants was also improper, particularly after the Court addressed Plaintiffs' proposed addition of a constructive fraud claim against the Non-Operational Defendants “solely to avoid [a request to add such a claim] following issuance of this Opinion and Order.” (9/28/16 Op. and Ord., Doc. 74, at 4 n.2.)

         The Non-Operational Defendants (in other words, all named defendants other than the Operational Defendants, as defined herein) have been dismissed from this proceeding and are stricken from the Amended Complaint pursuant to Federal Rule of Civil Procedure Rule 12(f). All allegations against the Non-Operational Defendants are also stricken. All further documents filed by any participant in this proceeding shall reflect the dismissal of the Non-Operational Defendants.

         B. Private Nuisance Claim

         The 9/28/16 Opinion and Order dismissed Plaintiffs' claim for private nuisance without leave to amend. Plaintiffs nevertheless re-stated their private nuisance allegations against the Operational Defendants in the Amended Complaint. Plaintiffs do not contend that the Amended Complaint revives their private nuisance claim; rather, Plaintiffs included the allegations relating to private nuisance in order “to preserve those claims for review and to avoid any assertion of waiver or abandonment of pleadings.” (Am. Compl. at 14 n.6.) Plaintiffs' claim for private nuisance will not be stricken because BP and Kinder Morgan have not shown that they are significantly ...


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