Eureka Resources, LLC v. Range Resources-Appalachia, LLC

62 A.3d 1233, 2012 WL 5949201, 2012 Del. Super. LEXIS 506
CourtSuperior Court of Delaware
DecidedNovember 27, 2012
DocketC.A. No. N12C-07-220 JRS CCLD
StatusPublished
Cited by9 cases

This text of 62 A.3d 1233 (Eureka Resources, LLC v. Range Resources-Appalachia, LLC) is published on Counsel Stack Legal Research, covering Superior Court of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eureka Resources, LLC v. Range Resources-Appalachia, LLC, 62 A.3d 1233, 2012 WL 5949201, 2012 Del. Super. LEXIS 506 (Del. Ct. App. 2012).

Opinion

SLIGHTS, J.

I.

A dispute arising under a Pretreatment and Disposal Agreement (the “Agreement”) between plaintiff, Eureka Resources, LLC (“Eureka”), and defendants, Range Resources-Appalachia, LLC (“Range”) and Range Resources Corpora[1234]*1234tion (“RRC”), has spawned both breach of contract and related tort claims. Defendants have moved to dismiss the tort claims. As to the tortious interference with contract claim, defendants invoke the settled principle of Texas law that a parent corporation cannot tortiously interfere with its subsidiary’s contracts. Applying this principle, defendants argue that the target of Eureka’s tortious interference claim, RRC, as parent of its wholly-owned subsidiary, Range, could not tortiously interfere with Range’s contract with Eureka as a matter of law. According to defendants, because the tortious interference claim fails as a matter of law, Eureka’s derivative civil conspiracy claim likewise must fail.

Eureka argues that defendants have glossed over the choice of law analysis in order to reach the conclusion that Texas law, more favorable to RRC’s position, applies here. According to Eureka, Pennsylvania has the most significant relationship to this controversy and, therefore, Pennsylvania law should apply. In this regard, Eureka disagrees with defendants’ contention that, when considering the viability of an intentional tort claim, the Court should defer to the law of the state where the tortious conduct allegedly occurred (in this case Texas). Instead, Eureka contends that Delaware courts will engage in a full choice of law analysis under the Restatement (Second) of Conflicts even in cases where the claim at issue is an intentional tort. A proper choice of law analysis, says Eureka, points to Pennsylvania law which does not, says Eureka, ipso jure preclude claims that a parent has tortiously interfered with its subsidiary’s ability to perform a contract.

After careful consideration of the parties’ submissions and presentations at oral argument, the Court concludes that Pennsylvania law applies to this dispute. Under Pennsylvania law, it is premature at this stage of the litigation to determine whether Eureka’s tortious interference claim is viable as a matter of law. Accordingly, defendants’ motion to dismiss must be DENIED.

II.

A. The Parties

Eureka is a Delaware limited liability company with its principal place of business in Pennsylvania.1 Range and RRC are Delaware business entities with principal places of business in Texas.2 RRC is the publicly-traded parent of its wholly-owned subsidiary, Range.3

B. The Agreement

Eureka and Range entered into the Agreement on August 6, 2008, for a term of five years.4 Pursuant to the Agreement, Eureka was to provide water pretreatment and disposal services for waste-water produced from drilling, hydraulic fracturing, and gas well producing sites operated by Range in Pennsylvania.5 In exchange for this service, Range agreed to pay Eureka a graduated per-gallon fee for the wastewater that it treated plus a minimum monthly charge referred to as a “reservation fee.” This fee was intended to compensate Eureka for maintaining the capacity to treat Range’s wastewater.6

[1235]*1235C. The Dispute

In 2010 and 2011, disputes arose between the parties regarding the extent of Range’s obligation to pay reservation fees.7 Range took the position that it was not obliged to pay a fee for capacity that it did not wish to reserve.8 Eureka disagreed. In addition to maintaining that Range was breaching the Agreement by not paying reservation fees, Eureka also alleged that RRC was tortiously interfering with Range’s performance of the Agreement by intentionally withholding funds from Range with which Range could pay the reservation fees.9

Eureka initiated this lawsuit in July, 2012, and has asserted the following claims: (1) Count I-breach of contract; (2) Count II-unjust enrichment; (3) Count Ill-promissory estoppel; (4) Count IV-tor-tious interference with contract (against RRC); (5) Count V-civil conspiracy (against RRC and Range); and (6) Count VI-declaratory judgment. Defendants have moved to dismiss Counts IV and V.

III.

Although the parties offer differing views of the substance of Texas and Pennsylvania law regarding tortious interference with contract, the essence of their dispute lies in their differing views regarding the focus of Delaware’s choice of law analysis when considering the proper law to apply to intentional tort claims. Defendants argue that Delaware places great (almost presumptive) weight on the lex loci delicti (the law of the site of the tort) when determining choice of law for intentional tort claims. Eureka, on the other hand, argues that the defendants’ emphasis upon lex loci delicti is misplaced and contrary to the now-settled law of Delaware.

The parties’ fundamental disagreement regarding the contours of Delaware’s choice of law analysis is significant here as both parties appear to appreciate that Eureka’s tortious interference of contract claim stands a better chance of success under Pennsylvania law than Texas law. Mindful of this dynamic, the Court will first consider the choice of law before determining the viability of Eureka’s tort claims.

IV.

A motion to dismiss under Rule 12(b)(6)10 presents the question of “whether a plaintiff may recover under any reasonably conceivable set of circumstances susceptible of proof under the complaint.” 11 When considering a motion to dismiss, the Court must read the complaint generously, accept all well-pleaded allegations as true, and construe them in a light most favorable to the plaintiff.12 A complaint is “well-plead” if it puts the opposing party on notice of the claim being brought against it.13 Dismissal is warranted only when “under no reasonable inter[1236]*1236pretation of the facts alleged could the complaint state a claim for which relief might be granted.”14

V.

A. Choice of Law

When more than one state’s law might apply to a dispute (here Texas, Pennsylvania and possibly Delaware), the Court will apply Delaware choice of law standards to determine which law shall apply.15 Prior to 1991, the “state of [Delaware] law in [the] area [of choice of law was] unsettled.”16 In Travelers Indem. Co. v. Lake, however, the Supreme Court of Delaware made clear that Delaware courts shall no longer apply “the lex loci doctrine” when determining choice of law in tort cases.17 Rather, Delaware courts are to frame the choice of law analysis around the Restatement (Second) of Conflicts’ “most significant relationship” doctrine in both contract and tort disputes.18

The defendants have cited to cases from the United States District Court for the District of Delaware, two decided prior to Lake

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Cite This Page — Counsel Stack

Bluebook (online)
62 A.3d 1233, 2012 WL 5949201, 2012 Del. Super. LEXIS 506, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eureka-resources-llc-v-range-resources-appalachia-llc-delsuperct-2012.