Red Hed Oil, Inc. v. H.T. Hackney Co.

292 F. Supp. 3d 764
CourtDistrict Court, E.D. Kentucky
DecidedNovember 14, 2017
DocketCivil Case No. 5:17–cv–180–JMH
StatusPublished
Cited by48 cases

This text of 292 F. Supp. 3d 764 (Red Hed Oil, Inc. v. H.T. Hackney Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Red Hed Oil, Inc. v. H.T. Hackney Co., 292 F. Supp. 3d 764 (E.D. Ky. 2017).

Opinion

Joseph M. Hood, Senior U.S. District Judge *769I. INTRODUCTION

Sometimes things go awry and we know not why. Many times, we have an inkling about what happened, but we cannot place our finger on it. And still other times, we can narrow the possibilities of what caused our misfortune to only a few options. A teacher finding gum on the floor, for example, can discern that one of his students must be responsible-even if he does not know which particular student is at fault. And a hunter in the woods struck by a pellet when several friends fire upon a covey of quail flushed from the thicket knows a co-hunter is to blame-though he might not know which person had the errant aim.

This case presents a similar "whodunit": Plaintiffs think one of several possible manufacturers is responsible their injury, but Plaintiffs cannot say exactly which Defendant should pay or exactly how Defendants caused the harm. Instead, Plaintiffs point the finger at several Defendants in hopes that discovery will unveil the culpable party. The question for this Court is whether, when only one Defendant could have caused the injury complained of, Plaintiffs may pass the pleading stage and access discovery without identifying which Defendant is responsible and without specifying how the defendant's products harmed Plaintiffs. The Court holds that Plaintiffs may not do so. Thus, for the reasons stated herein, the defendants' Motion to Dismiss [DE 12] is GRANTED .

II. FACTUAL AND PROCEDURAL HISTORY

Like many consumer products, electronic cigarettes have a shelf life. After a certain amount of time, they go bad. And when they go bad, e-cigarettes can no longer be used. So when Red Hed Oil, Inc. ("Red Hed") failed to sell the stash of e-cigarettes in its convenience store before they expired, the company placed the out-of-date products in a storage room. [DE 1-1 at p. 9, ¶¶ 19-21]. Defendant The H.T. Hackney Co. ("Hackney")-the company that sold the e-cigarettes to Red Hed-picked up expired e-cigarettes on a bi-weekly basis. [Id. , ¶ 20].

But this time, before Hackney arrived for the pick-up, the out-of-date e-cigarettes went up in smoke. [Id. , ¶ 21]. A fire tore through Red Hed's convenience store and caused more than a quarter-million dollars in damage. [DE 1-1 at p. 10, ¶ 30]. Red Hed seeks recovery from the e-cigarette manufacturers in this products liability action.

Red Hed owns and operates the convenience store and gas station in Berea, Kentucky. [Id. at p. 5, ¶ 2]. Plaintiff Federated Mutual Insurance Company ("Federated") holds a commercial policy on the store. [Id. at p. 9, ¶¶ 27-28]. Known as "Redi-Mart," the store sold, among other products, e-cigarettes. [Id. at pp. 6-9]. Red Hed purchased the e-cigarettes from Hackney, a distributor and supplier of grocery products. [Id. at p. 5, ¶ 4; p. 8, ¶ 17]. The manufacturing defendants-Swisher International, Inc. ("Swisher"), Logic Technology Development LLC ("Logic"), Spark Industries LLC ("Spark"), R.J. Reynolds Vapor Company ("R.J. Reynolds"), NJoy Inc. ("NJoy"), and Fontem Ventures B.V. ("Fontem")-produced e-cigarettes and supplied them to Hackney. [Id. at p. 8, ¶ 14]. Hackney *770then sold the e-cigarettes to Red Hed. [Id. , ¶ 17].

As part of its sale to Red Hed, Hackney agreed to pick up expired e-cigarettes on a bi-weekly basis. [Id. at p. 9, ¶ 20]. Red Hed placed the e-cigarettes in a box that Hackney collected; Hackney did not provide any additional instructions. [Id. , ¶ 19]. Red Hed claims it was never involved in delivery of the e-cigarettes to the Redi-Mart and did not tamper with or alter the products. [Id. at p. 9, ¶¶ 22-23]. The manufacturing defendants sold their products to Hackney, and Hackney sent the e-cigarettes to the Redi-Mart. The manufacturing defendants did not directly sell e-cigarettes to Red Hed.

The fire at issue in this case occurred in late April 2016 at the Berea Redi-Mart. [Id. at p. 9, ¶ 21]. The blaze damaged Red Hed's building, equipment, and land, resulting in $258,353.42 in insurance payments by Federated to Red Hed. [Id. at p. 10, ¶ 30]. Red Hed argues that expired e-cigarettes, sitting in the storage room awaiting pickup from Hackney, were defective and sparked the fire. [Id. at p. 9, ¶ 21]. The claimed defect in the e-cigarettes existed at the time of manufacture and was undiscoverable by Red Hed, according to Plaintiffs' Complaint. [Id. at p. 9, ¶ 25].

Red Hed and Federated filed this products liability lawsuit in March 2017 in Madison County Circuit Court against Hackney and the manufacturing defendants. [DE 1-1]. Red Hed seeks recovery from the manufacturing defendants on state-law claims of negligence, defective manufacture and design, inadequate warning, breach of express warranty, and breach of implied warranties. [Id. at pp. 16-22]. Red Hed asserted similar claims against Hackney. [Id. at pp. 10-14].

Defendants Hackney and Spark filed answers in state court. [DE 1-1 at pp. 25, 39]. Defendant Logic removed the case to federal court in April 2017 on the basis of diversity jurisdiction pursuant to 28 U.S.C. §§ 1441 and 1332. [DE 1-1]. R.J. Reynolds and Logic filed answers shortly after removal. [DE 8; 9]. Before it answered, Swisher filed a Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(6) on May 1, 2017. [DE 12]. After Swisher's motion, NJoy notified the Court that it filed for Chapter 11 bankruptcy, and the Court stayed this mater as to NJoy only. [DE 16]. Defendants R.J. Reynolds, Logic, and Spark then filed motions pursuant to Fed. R. Civ. P. 10(c) to incorporate Swisher's Motion to Dismiss. [DE 18; 19; 20]. Because R.J. Reynolds, Logic, and Spark had already filed answers, however, they could not move under Rule 12(b)(6) and instead sought judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c), which applies the same standard of review as Rule 12(b)(6). Plaintiffs did not oppose any of the joinder motions.

Defendants argue that Plaintiffs' Complaint does not adequately plead that any Defendant's product caused the fire or that any product had a defect. [DE 12 at p. 4-8]. Indeed, according to Defendants, Plaintiffs can only speculate about the cause of the fire, and they can only speculate that some e-cigarette was defective.

Plaintiffs responded to Defendants' Motion to Dismiss [DE 25], and Swisher replied [DE 26]. Spark, R.J. Reynolds, and Logic all moved pursuant to Fed. R. Civ. P. 10(c) to incorporate, join in, and adopt Swisher's reply to Plaintiffs' response. [DE 27; 28; 29]. Defendant Fontem then moved under Rule 10(c) to join Swisher's Motion to Dismiss. [DE 34]. Again, Plaintiffs did not oppose Defendants' joinder motions.

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Bluebook (online)
292 F. Supp. 3d 764, Counsel Stack Legal Research, https://law.counselstack.com/opinion/red-hed-oil-inc-v-ht-hackney-co-kyed-2017.