United States District Court,

M.D. Pennsylvania.

John GULA, Plaintiff,

v.

ADVANCED CARGO TRANSPORTATION, INC., and Washington Munozarevalo, Defendants.

 

Civil No. 3:13–CV–226.

May 7, 2013.

 

Michael Joseph Vazquez, Jr., O’Malley & Langan, Scranton, PA, Todd A. Romano, Romano Law Group, Lake Worth, FL, for Plaintiff.

 

Theodore M. Schaer, Philadelphia, PA, for Defendants.

 

MEMORANDUM

MALACHY E. MANNION, District Judge.

*1 Before the court is defendant Advanced Cargo Transportation’s motion to dismiss, (Doc. No. 5 ), those portions of the complaint containing requests for punitive damages and allegations of reckless conduct. (Doc. No. 1.) In his brief in opposition, plaintiff argues that he has stated sufficient facts at this stage of litigation and that a reasonable jury could find that defendants acted recklessly, thereby entitling him to punitive damages. (Doc. No. 8, at 9.) After reviewing the complaint and the parties’ briefs, the court has determined that defendants’ motion to dismiss will be DENIED.

 

BACKGROUND

On October 10, 2011, defendant Washington Munozarevalo was driving his tractor-trailer truck in the eastbound lane of Interstate 80 in Monroe County, Pennsylvania. (Doc. No. 1, at 2–3.) The truck was owned by defendant Munozarevalo but was “operated with the permission and consent of his employer, Advanced Cargo Transportation … under an owner-operator arrangement.” (Doc. No. 1, at 3.) At the time, plaintiff John Gula was a passenger in a vehicle being driven in the westbound lane of Interstate 80. (Doc. No. 1, at 3.) Although the precise chain of events are unclear from the complaint, defendant Munozarevalo appears to have struck the rear of two cars in the eastbound lane, crossed the highway median into the westbound lane, and collided with the vehicle in which plaintiff was a passenger. (Doc. No. 1, at 4.) As a result, plaintiff claims that he has sustained the following injuries: a jejunal perforation, a mesenteric hematoma, a splenic flexure, colonic ischemia, multiple acute left rib fractures, pleural effusion, numbness and coldness of both feet, occasional numbness of bilateral fingers, intermittent headaches, sensitivity to loud noises and light, fatigue, recurrent nightmares, and a left L5 radiculopathy, post-traumatic stress disorder and depressive disorder, slight bilateral tremor in the arms and mild psychomotor retardation, and intermittent left leg weakness. (Doc. No. 1, at 11,17–18.)

 

Investigation after the accident showed that defendant’s truck had a defective brake and relay valve on axle one and defective brakes on axle three. (Doc. No. 1, at 7–8, 15.) Plaintiff claims that defendant was driving over the speed limit while fatigued from operating his truck over the maximum legal operation time. (Doc. No. 1, at 7.) Plaintiff further claims that defendant Advanced Cargo failed to instruct defendant Munozarevalo how to safely operate the truck and did not provide Munozarevalo with proper training and supervision. (Doc. No. 1, at 6–7.) Finally, both Advanced and Munozarevalo failed to “maintain, inspect, and repair” the vehicle throughout its life of service. (Doc. No. 1, at 6, 14.)

 

Plaintiff filed suit against Munozarevalo for operating his truck in a “negligent, reckless and careless” manner. (Doc. No. 1, at 4.) He also sued Advanced Cargo under the alternative theories of direct liability and respondeat superior. (Doc. No. 1.) On February 25, 2013, defendants filed a consolidated motion to strike and motion to dismiss, arguing that the complaint fails to allege facts sufficient to support an award of punitive damages and that allegations of recklessness should therefore be stricken. (Doc. No. 6, at 2.) Defendants subsequently filed a third-party complaint against Trac Intermodal, the manufacturer of the truck, seeking indemnity or, in the alternative, contribution. (Doc. No. 13.) Plaintiff responded by filing an unopposed motion FN1 for leave to amend the complaint in order to add Trac Intermodal as a defendant to the case, (Doc. No. 15 ), which the court granted on April 30, 2013, (Doc. No. 20). The defendants Munozarevalo and Advanced Cargo withdrew their third party complaint on April 29, 2013. (Doc. No. 18.)

 

FN1. Pursuant to Local Rule 7.1, a party filing a unopposed motion must attach a certificate of concurrence. While plaintiff does not attach a certificate, the court will nonetheless rule on the motion.

 

STANDARD OF REVIEW

*2 Defendant’s motion to dismiss is brought pursuant to the provisions of Fed.R.Civ.P. 12(b)(6). This rule provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated, ( Hedges v. United States, 404 F.3d 744, 750 (3d Cir.2005) ), and dismissal is appropriate only if, accepting all of the facts alleged in the complaint as true, the plaintiff has failed to plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007) (abrogating “no set of facts” language found in Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The facts alleged must be sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. 544, 127 S.Ct. at 1965, 167 L.Ed.2d 929. This requirement “calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of” necessary elements of the plaintiff’s cause of action. (Id.) Furthermore, in order to satisfy federal pleading requirements, the plaintiff must “provide the grounds of his entitlement to relief,” which “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir.2008) (brackets and quotations marks omitted) (quoting Twombly, 550 U.S. 544, 127 S.Ct. at 1964–65 ).

 

DISCUSSION

In his complaint, plaintiff requests punitive damages from defendants Washington and Advanced Cargo Transportation, Inc. for “acts [which] constitute a reckless indifference to the risk of injury to Plaintiff.” (Doc. No. 1, at 11, 17.) Defendant subsequently filed a Rule 12(b)(6) motion to dismiss, but asking for relief under either 12(b)(6) or 12(f). (Doc. No. 5, at 3.) In that motion, defendants argue, “[p]laintiff’s Complaint in this matter has done nothing more than make conclusory allegations of a reckless state of mind without alleging facts sufficient to support such a finding, even if taken as true.” (Doc. No. 5, at 3.)

 

In analyzing defendant’s motion, the court is cognizant that Rule 12(f) and 12(b)(6) serve different purposes and provide different relief. Rule 12(f) has “no application to a request for punitive damages, in that it does not constitute redundant, immaterial, impertinent, or scandalous matter.”   North Side Foods Corp. v. Bag–Pack, Inc., 06–CV–1612, 2007 WL 954106, *3 (W.D.Pa.2007); see also Jordan v. Wilkes–Barre General Hosp., 07–CV–390, 2008 WL 3981460, *4 (M.D.Pa.2008) (court should not use 12(f) to eliminate request for punitive damages). Rather, rule 12(b)(6) provides the appropriate remedy when challenging a request for punitive damages. K.E.K. ex rel. Kauffman v. The Grier School, 05–CV–386, 2005 WL 2028700, *2 (M.D.Pa.2005) (analyzing punitive damages under Rule 12(b)(6)). On the other hand, “[t]o the extent plaintiffs wish to excise individual allegations, Rule 12(f) provides the appropriate vehicle for doing so.” North Side Foods Corp., v. Bag–Pack, 06–CV–1612, 2007 WL 954106, *3 (W.D.Pa.2007); Fed.R.Civ.P. 12(f). Because defendants ask the court to strike particular allegations and dismiss the request for punitive damages, the court will analyze defendants motion under both rules. Jordan v. Wilkes–Barre General Hosp., 07–CV–390, 2008 WL 3981460, *5 (M.D.Pa.2008) (recognizing court’s authority to interpret a motion and construe it according to the substance of the motion itself).

 

*3 As an initial matter, an award of punitive damages in a diversity case is governed by state law. Bridges v. Ashland Borough, 10–CV–1065, 2011 WL 5826676 (M.D.Pa.2011). Under Pennsylvania law, a party may recover punitive damages if “(1) a defendant had a subjective appreciation of the risk of harm to which the plaintiff was exposed and that (2) he acted, or failed to act, as the case may be, in conscious disregard of that risk.” Hutchison ex rel. Hutchison v. Luddy, 870 A.2d 766, 124 (2005). The Pennsylvania Supreme Court has said:

 

The standard governing the award of punitive damages in Pennsylvania is settled. Punitive damages may be awarded for conduct that is outrageous, because of the defendant’s evil motive or his reckless indifference to the rights of others. As the name suggests, punitive damages are penal in nature and are proper only in cases where the defendant’s actions are so outrageous as to demonstrate willful, wanton or reckless conduct. Hutchison ex rel. Hutchison v. Luddy, 582 Pa. 114, 870 A.2d 766, 770 (2005).

 

The complaint contains numerous allegations indicating that defendant Munozarevalo acted negligently and violated several Pennsylvania and federal regulations. (Doc. No. 1, at 13–17.) Allegations of negligence, however, are insufficient to survive a motion to dismiss a request for punitive damages under Pennsylvania law because punitive damages may not be awarded for simple negligence. Kempson v. American Honda Motor Co., 09–CV–0118, 2009 WL 744115, *5 (M.D.Pa.2009). Furthermore, allegations that a party violated state or federal law are legal conclusions to which the court need not give a presumption of truth. For the purpose of defendants’ Rule 12(b)(6) motion, the court will only consider factual allegations from which the court can draw an inference of a plausible claim for reckless conduct and, therefore, punitive damages.

 

Plaintiff first states that defendant Munozarevalo “[operated] his vehicle when he was so fatigued as to make it unsafe for him to operate the tractor trailer” and also “[operated] his vehicle in excess of the applicable Hours of Service.” (Doc. No. 1, at 14.) The complaint indicates that defendant failed to “maintain, inspect and repair his vehicle” and “[operated] the tractor on public highways with inoperative or defective brakes and a relay valve on axle 1[and] inoperative or defective brakes on axle 3.” (Doc. No. 1, at 14–15.) While these allegations may not conclusively establish recklessness, the court’s obligation is merely to determine whether they create a plausible inference of recklessness, one which discovery will further substantiate.   Williams v. Beard, 10–CV–979, 2012 WL 463441, *2 (M.D.Pa.2012) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). The court has determined that, in the aggregate, these allegations allow an inference that defendant Munozarevalo had a “subjective appreciation of the risk” he posed to other drivers. Hutchison ex rel. Hutchison v. Luddy, 582 Pa. 114, 870 A.2d 766, 770 (2005). The fact that he nonetheless operated his truck under these conditions indicates that he acted with “conscious disregard of that risk.” Id. Therefore, plaintiff’s allegations suffice to survive a motion to dismiss with regard to defendant Munozarevalo.

 

*4 As to defendant Advanced Cargo Transportation, plaintiff raises two theories of liability—vicarious and direct. (Doc. No. 1, 4–8.) Looking at vicarious liability under respondeat superior, the court has already determined that plaintiff may go forward with his claim for punitive damages against Munozarevalo. Plaintiff claims that Munozarevalo was acting within the scope of employment at the time of the accident, and neither defendant disputes this in the motion. Brezenski v. World Truck Transfer, Inc. 755 A.2d 36, 39 (Pa.Super.Ct.2000) (“An employer is vicariously liable for the wrongful acts of an employee if that act was committed during the course of and within the scope of employment.”) Therefore, plaintiff has averred sufficient facts to survive a motion to dismiss against Advanced Cargo under a theory of respondeat superior. The question remains, however, as to whether plaintiff has alleged sufficient facts to support a claim of direct liability.

 

Plaintiff alleges that Advanced Cargo allowed Munozarevalo to operate his truck with “inoperative or defective brakes and a relay valve on axle 1,” “inoperative or defective brakes on axle 3,” and “a missing registration lamp lens [sic] cover.” (Doc. No. 1, at 7–8.) Furthermore, the complaint indicates that Advanced Cargo permitted Munozarevalo to operate the truck when he was fatigued, in excess of the permissible time limit, and without proper training or supervision. (Doc. No. 1, at 6–7.) Finally, Advanced Cargo failed to “maintain, inspect, and repair” the vehicle. (Doc. No. 1, at 6.) Like the allegations against Munozarevalo, these allegations, while not conclusive as to recklessness, are sufficient to survive defendants’ motion to dismiss because they allow the court to make an inference of reckless conduct.

 

Having disposed of the first part of the motion, the court must now look at the motion to strike. Under Rule 12(f), “the court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). While this rule gives the court significant discretion, “striking a pleading is a drastic remedy and should be sparingly used by the courts.” Conklin v. Anthou, 10–CV–2501, 2011 WL 1303299, *1 (M.D.Pa.2011); see also Zaloga v. Provident & Acc. Ins. Co. of America, 671 F.Supp.2d 623, 633 (M.D.Pa.2009) (acknowledging court’s discretion to strike). In this case, defendants ask the court to strike the words “outrageous, careless, willfully, wantonly, reckless, and reckless indifference.” (Doc. No. 6, at 2.) This language precisely mirrors the standard for punitive damages enunciated by the Pennsylvania Supreme Court. Hutchison ex rel. Hutchison v. Luddy, 582 Pa. 114, 870 A.2d 766, 770 (2005). Because the court will deny the motion to dismiss plaintiff’s request for punitive damages, this language is not immaterial nor impertinent. Furthermore, the court does not perceive the allegations to be scandalous. Allegations are scandalous if they “improperly cast[ ] a derogatory light on someone, most typically on a party to the action.” Zaloga v. Provident Life & Acc. Ins. Co. of America, 671 F.Supp.2d 623, 633 (M.D.Pa.2009). Furthermore, “[s]candalous pleading must reflect cruelly upon the defendant’s moral character, use repulsive language or detract fro the dignity of the court. Id. The court is not prepared to find the terms “outrageous, careless, willfully, wantonly, reckless, and reckless indifference” scandalous, especially considering they are the terms used by the Supreme Court of Pennsylvania in the standard governing punitive damages. Finally, defendants make no claim that the language is redundant, instead requesting to have it totally stricken. (Doc. No. 6, at 3–4.) Therefore, the motion to strike will be DENIED.

 

ORDER

*5 IT IS HEREBY ORDERED:

 

(1) Defendants’ motion to strike, (Doc. No. 5 ), allegations in the complaint of the culpability of defendants’ alleged conduct, (Doc. No. 1 ), is DENIED.

 

(2) Defendants’ motion to dismiss, (Doc. No. 5 ), plaintiff’s request for punitive damages is DENIED.

United States District Court,

E.D. Michigan,

Southern Division.

ESSEX INSURANCE COMPANY, Plaintiff,

v.

DETROIT BULK STORAGE, INC., the Morton Salt Company, United States Steel Corp., and Praxair, Inc., Defendants.

 

Civil Action No. 11–cv–13277.

May 7, 2013.

 

Michael I. Goldman, Goldman and Hellman, Brookline, MA, Mary C. Rentz, Plunkett & Cooney, Detroit, MI, for Plaintiff.

 

Avery K. Williams, Lisa M. Gardner, Williams Acosta, PLLC, Kevin S. Hendrick, Stuart M. Schwartz, Clark Hill PLC, Detroit, MI, Richard T. Urbis, Urbis & Associates, P.C., Rochester, MI, Dane A. Lupo, Kenneth L. Lupo, Lupo & Koczkur, Sterling Heights, MI, for Defendants.

 

REVISED FN1 OPINION AND ORDER (1) GRANTING MORTON SALT’S MOTION TO VOLUNTARILY DISMISS ITS COUNTERCLAIM AGAINST ESSEX AND DISMISSING MORTON’S COUNTERCLAIM WITH PREJUDICE IF MORTON DOES NOT WITHDRAW THE MOTION WITHIN 14 DAYS OF THE DATE OF THIS OPINION AND ORDER (Dkt. No. 124), (2) DENYING PLAINTIFF’S MOTION FOR CLARIFICATION (Dkt. No. 128), (3) GRANTING MORTON SALT’S MOTION FOR EXTENSION OF DISCOVERY DEADLINE (Dkt. No. 139), and (4) ORDERING THAT THE DISCOVERY CLOSURE DATE BE EXTENDED BY 30 DAYS FROM THE DATE OF ENTRY OF THIS OPINION AND ORDER

 

FN1. The only revision in this Opinion and Order is the reference to Defendant Morton on page 6.

 

PAUL D. BORMAN, District Judge.

*1 The Court has before it three motions filed by Defendant Morton Salt, Inc. (“Morton”) and Plaintiff Essex Insurance Company (“Essex”):

 

(1) Defendant Morton’s Motion to Voluntarily Dismiss Its Counterclaim Against Plaintiff Essex and to Dismiss Essex’ Declaratory Action for Lack of Subject Matter Jurisdiction, filed on March 20, 2013 (Dkt. No. 124),

 

(2) Plaintiff’s Motion for Clarification, filed on April 4, 2013 (Dkt. No. 128), and

 

(3) Defendant Morton’s Motion for Extension of Discovery Deadline, filed on April 30, 2013

 

(Dkt. No. 139).

 

Plaintiff Essex did not file a response to Morton’s motion to voluntarily dismiss. However, Plaintiff’s Motion for Clarification responds to the arguments made by Defendant Morton in its motion to voluntarily dismiss. On April 10, 2013, Morton filed its Objections and Response to Essex’ Motion for Clarification. (Dkt. No. 133.) On April 15, 2013, Essex filed a Response in Support of Motion for Clarification. (Dkt. No. 134.)

 

On April 30, 2013, Morton filed a Motion for Extension of Discovery Deadline, requesting an additional 30 days of discovery after the Court’s ruling on Morton’s motion to voluntarily dismiss. (Dkt. No. 139.)

 

The Court, having read the pleadings, finds that a determination without a hearing is appropriate pursuant to Eastern District of Michigan Local Rule 7.1(f). For the reasons stated below, the Court will:

 

(1) GRANT Morton’s Motion to Voluntarily Dismiss Its Counterclaim Against Essex and DISMISS Morton’s counterclaim WITH PREJUDICE if Morton does not withdraw the Motion within two weeks of the date of this Opinion and Order;

 

(2) DENY Plaintiff’s Motion for Clarification,

 

(3) GRANT Morton Salt’s Motion for Extension of Discovery Deadline, and

 

(4) ORDER that the discovery closure date be extended by 30 days from the date of entry of this Opinion and Order.

 

I. BACKGROUND

This case arises out of a wharfinger liability insurance policy issued by Plaintiff Essex to Defendants Morton and Detroit Bulk Storage, Inc. (“DBS”). The policy insured a docking facility located at 530 East Great Lakes Avenue in River Rouge, Michigan. The docking facility was used by Defendant DBS under a lease agreement from Defendant United States Steel Corporation (“US Steel”).

 

On January 28, 2011, the ground underneath a large salt pile located at the docking facility caved in, causing damage to the docking facility and a loss of approximately 20,000 tons of salt, which was owned by Morton. After an investigation as to the cause of the incident, Essex filed this declaratory judgment action, alleging that its wharfinger’s liability policy affords no coverage for damages related to the January 28, 2011 incident. The Complaint alleged that jurisdiction in this United States District Court was based on admiralty. (Compl.¶ 3.) On June 20, 2012, Defendant Morton filed a counterclaim alleging that Essex breached the wharfinger insurance contract by refusing coverage for the January 28, 2011 incident. (Dkt. No. 52.)

 

*2 This Court’s jurisdiction has been thoroughly contested by Defendants Morton and DBS. Both Defendants filed motions to dismiss for lack of subject matter jurisdiction. (Dkt.Nos.11, 12.) In addition to oral argument, the briefing, which is fully outlined in this Court’s May 23, 2012 Opinion and Order Denying Defendant Morton’s Motion to Dismiss for Lack of Subject Matter Jurisdiction (Dkt. No. 47), consisted of the two motions filed by Defendants, a response, two replies, a sur-reply, a supplemental brief, and two responses to the supplemental brief. (May 23, 2012 Op. and Order Denying Def. Morton’s Mot. to Dismiss 1–2.) This Court concluded that it had admiralty jurisdiction over the wharfinger insurance contract at issue, because “the principal objective of the contract is to insure against loss to ships and their cargo and equipment while they are docked at the wharf.” (Id. at 6.)

 

While contesting this Court’s jurisdiction, Defendants Morton and DBS also filed an action for breach of contract against Plaintiff Essex in state court based on the very same January 28, 2011. Plaintiff contends that the state court action “was identical [to the instant federal action] because it involved exactly the same occurrence (the collapse of the dock) and exactly the same legal dispute (the coverage afforded by the wharfinger policy).” (Pl.’s Mot. for Clarification 3.) On April 13, 2012, the state court granted Essex’s motion for summary disposition and dismissed the action brought by Morton and DBS. (PL’s Mot. for Clarification, Ex. A, State Court Order.) Notably, the state court dismissed DBS and Morton’s claims without prejudice and specifically provided, “[i]n the event Essex’s action in federal court is dismissed, Plaintiffs [Morton and DBS] may file a new action.” (Pl.’s Mot. for Clarification, Ex. A, State Court Order.)

 

On March 20, 2013, Defendant Morton filed the instant Motion to Voluntarily Dismiss Its Counterclaim Against Essex and to Dismiss Essex’ Declaratory Action for Lack of Subject Matter Jurisdiction. Morton contends that it “has decided that it no longer wishes to contest Essex’ denial of coverage for the [January 28, 2011 incident].” (Def.’s Mot to Voluntarily Dismiss at 2.) In support of its motion, Morton attaches the Affidavit of Andrew J. Kotlarz, the Vice President of Finance, and CFO for Defendant Morton. (Def.’s Mot. to Voluntarily Dismiss, Ex. 1, Kotlarz Aff.) Mr. Kotlarz states that “Morton does not contest Essex’ assertion that it has no duty to defend or indemnify Morton under the [wharfinger] Policy for this Occurrence.” (Kotlarz Aff. ¶ 4.) Defendant Morton has also attached a Proposed Order providing for the dismissal of Essex’s Complaint in this matter for lack of subject matter jurisdiction. (Def.’s Mot. to Voluntarily Dismiss, Ex. 3, Proposed Order.)

 

Plaintiff attached to its Motion for Clarification an email exchange between Plaintiff’s counsel and Defendant Morton’s counsel. (Pl.’s Mot. for Clarification, Ex. D, Emails.) In this email exchange, counsel for both parties discuss a possible dismissal of Essex’s and Morton’s claims with prejudice. Although counsel for Morton expresses a willingness to enter into a stipulated dismissal with prejudice in a March 5, 2013 email, the parties have not reached an agreement on a dismissal with prejudice. (Id.) Defendant Morton ultimately filed its motion to voluntarily dismiss on March 20, 2013.

 

II. ANALYSIS

1. Defendant Morton’s Motion to Voluntarily Dismiss Its Counterclaim

*3 Morton seeks to voluntarily dismiss its counterclaim against Essex pursuant to Federal Rule of Civil Procedure 41. Morton has submitted evidence that it no longer wishes to contest Plaintiff Essex’s denial of coverage. (Kotlarz Aff. ¶¶ 3–4.)

 

Rule 41(a)(2) provides that “an action may be dismissed at the plaintiff’s request only by court order, on terms that the court considers proper.” Dismissal of a claim under this rule is within the Court’s discretion.   Commodities Export Co. v. Detroit Intern. Bridge Co., 695 F.3d 518, 530 (6th Cir.2012). “Unless the order states otherwise, a dismissal under Rule 41(a)(2) is without prejudice.” Bridgeport Music, Inc. v. Universal–MCA Music Pub., Inc., 583 F.3d 948, 953 (6th Cir.2009).

 

In the instant matter, the Court finds that dismissal with prejudice is proper. The “game playing” of filing and dismissing lawsuits in different jurisdictions is over, at least in this jurisdiction.

 

The Court notes that Defendant Morton is entitled to notice of this Court’s intention to dismiss its counterclaim with prejudice, an opportunity to be heard in opposition to dismissal with prejudice, and an opportunity to withdraw its request for voluntary dismissal. Michigan Surgery Investment, LLC v. Arman, 627 F.3d 572, 575 (6th Cir.2010). Accordingly, the Court will allow Morton 14 days from the date of entry of this Opinion and Order to either respond in opposition or to withdraw its motion to voluntarily dismiss its counterclaim. Otherwise, the Court will GRANT Morton’s motion and DISMISS its counterclaim against Essex WITH PREJUDICE.

 

2. Defendant Morton’s Motion to Dismiss for Lack of Subject Matter Jurisdiction

Defendant Morton argues that a justiciable controversy no longer exists between Morton and Essex, and that the Court should therefore dismiss Plaintiff’s declaratory judgment action against Morton for lack of subject matter jurisdiction. In response, Plaintiff Essex contends that, by seeking a dismissal for lack of subject matter jurisdiction, and thus a dismissal “without prejudice,” Defendant Morton is seeking to escape federal jurisdiction. Plaintiff argues that if this Court grants Defendant’s motion, Defendant Morton will simply re-file its breach of contract claim against Essex as a plaintiff in state court, and that Essex is entitled to a declaratory ruling in this Court. The Court agrees.

 

The Declaratory Judgment Act provides that, “[i]n a case of actual controversy within its jurisdiction, … any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). “It is a basic principle of Article III that a justiciable case or controversy must remain ‘extant at all stages of review, not merely at the time the complaint is filed.’ “ United States v. Juvenile Male, ––– U.S. ––––, 131 S.Ct. 2860, 2864, 180 L.Ed.2d 811 (2011). “In recognition of the Constitution’s limit on judicial authority, the Declaratory Judgment Act, 28 U.S.C. § 2201(a), permits a court to enter declaratory relief only ‘[i]n a case of actual controversy….’ “ Fieger v. Michigan Supreme Court, 553 F.3d 955, 961 (6th Cir.2009). A court lacks jurisdiction under the Declaratory Judgment Act “when the claimant lacks standing, that is, ‘a sufficiently concrete and redressable interest in the dispute.’ “ Id. (citation omitted). “Allegations of possible future injury do not satisfy the requirements of Art. III. A threatened injury must be ‘certainly impending’ to constitute injury in fact.” Whitmore v. Arkansas, 495 U.S. 149, 158, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990) (citation omitted).

 

*4 Defendant Morton argues that this Court lacks subject matter jurisdiction because Morton has voluntarily withdrawn any claims against Essex under the wharfinger policy. However, Defendant Morton may seek to reassert claims at any time in another court. “It is well settled that a defendant’s voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice. If it did, the courts would be compelled to leave the defendant free to return to his old ways.”   Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 189, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (citation and internal punctuation omitted).

 

The Court finds that the possibility of reassertion of Defendant Morton’s breach of contract claim against Essex in another court is sufficient to create a justiciable case or controversy for purposes of Article III and the Declaratory Judgment Act. In so holding, the Court finds significant the following facts:

 

• Defendant Morton previously asserted a breach of contract claim against Plaintiff Essex in state court, which the state court dismissed without prejudice, specifically noting that Defendant Morton could reassert its claim if this federal action was dismissed.

 

• Although Defendant Morton expressed a willingness to agree to a stipulated dismissal with prejudice, counsel for Defendant Morton rejected Plaintiff’s proposed dismissal with prejudice. (PL’s Mot. for Clarification, Ex. D, Emails.) The Court is unaware of any covenant not to sue or other stipulation by Defendant Morton that would prevent Morton from reasserting its claims against Plaintiff Essex after dismissal.

 

Accordingly, because Defendant may reassert its claims against Essex in state court, and because Defendant Morton has declined Plaintiff’s offer to stipulate to a dismissal with prejudice, the Court finds that an actual controversy exists that confers jurisdiction and permits the relief provided under the Declaratory Judgment Act. Defendant Morton’s request to dismiss Essex’s declaratory action for lack of subject matter jurisdiction is therefore DENIED.

 

3. Plaintiff’s Motion for Clarification

In its Motion for Clarification, Plaintiff requests that the Court deny Defendant Morton’s request for a dismissal without prejudice for lack of subject matter jurisdiction and issue an order dismissing Defendant Morton’s claims with prejudice. (Pl.’s Mot. for Clarification 2.) Plaintiff’s motion is effectively a response to Defendant Morton’s motion; it only presents arguments as to why the Court should deny Defendant Morton’s motion. Accordingly, the Court will DENY Plaintiff’s Motion for Clarification.

 

4. Motion for Extension of Discovery Deadline

Defendant Morton seeks an order extending the discovery closure date by an additional 30 days after the Court’s ruling on Defendant’s Motion to Voluntarily Dismiss Its Counterclaim Against Essex and to Dismiss Essex’ Declaratory Judgment Action for Lack of Subject Matter Jurisdiction. The Court will GRANT Defendant’s motion. The discovery closure date will be extended by an additional 30 days from the date of entry of this Opinion and Order.

 

III. CONCLUSION

*5 For the reasons stated above, the Court will:

 

(1) GRANT Morton’s Motion to Voluntarily Dismiss Its Counterclaim Against Essex and DISMISS Morton’s counterclaim WITH PREJUDICE if Morton does not withdraw the Motion within two weeks of the date of this Opinion and Order;

 

(2) DENY Plaintiff’s Motion for Clarification,

 

(3) GRANT Morton Salt’s Motion for Extension of Discovery Deadline, and

 

(4) ORDER that the discovery closure date be extended by 30 days from the date of entry of this Opinion and Order.

 

SO ORDERED.