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Stinson v. Twin Pines Coal Co., Inc.

United States District Court, M.D. Alabama, Southern Division

September 11, 2014

CHARLES BYRON STINSON, on behalf of himself and a class of others similarly situated, Plaintiff,
v.
TWIN PINES COAL CO., INC., and THE AMERICAN COAL COMPANY, Defendants.

MEMORANDUM OPINION AND ORDER

W. KEITH WATKINS, Chief District Judge.

Before the court are Defendant The American Coal Co.'s ("AMCOAL") motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and Plaintiff Charles Bryon Stinson's motion to exclude the exhibits attached to AMCOAL's motion. (Docs. # 9, 18.) In this diversity, putative-class action, Mr. Stinson has sued AMCOAL for breach of contract. AMCOAL contends that Mr. Stinson cannot recover on behalf of himself or a putative class because he is neither a party to that contract nor an intended third-party beneficiary. The motions have been fully briefed. (Docs. # 10, 13, 17, 18, 22, 25.) Based upon careful consideration of the arguments of counsel and the relevant law, the court finds that Mr. Stinson does not have standing to sue AMCOAL for breach of contract because he lacks a legally protected interest in that contract. Because the court does not have the power to entertain this action, dismissal is required under Federal Rule of Civil Procedure 12(b)(1).[1] In light of the Rule 12(b)(1) dismissal AMCOAL's Rule 12(b)(6) motion is due to be denied as moot. Additionally, Mr. Stinson's motion to exclude (Doc. # 18) is due to be denied.

I. JURISDICTION AND VENUE

Subject-matter jurisdiction is proper pursuant to 28 U.S.C. § 1441 and the Class Action Fairness Act, codified in part at 28 U.S.C. §§ 1332(d) and 1453. Personal jurisdiction and venue are not contested.

II. STANDARD OF REVIEW

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) challenges the court's subject matter jurisdiction. McElmurray v. Consol. Gov't of Augusta-Richmond Cnty., 501 F.3d 1244, 1251 (11th Cir. 2007). On a Rule 12(b)(1) facial attack, the court evaluates whether the plaintiff "has sufficiently alleged a basis of subject matter jurisdiction" in the complaint and employs standards similar to those governing Rule 12(b)(6) review. Houston v. Marod Supermarkets, Inc., 733 F.3d 1323, 1335 (11th Cir. 2013).

When evaluating a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must take the facts alleged in the complaint as true and construe them in the light most favorable to the plaintiff. Resnick v. AvMed, Inc., 693 F.3d 1317, 1321-22 (11th Cir. 2012). To survive Rule 12(b)(6) scrutiny, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "[F]acial plausibility" exists "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556).

In contrast to a facial attack on subject matter jurisdiction, a Rule 12(b)(1) factual attack "challenge[s] the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered." Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990) (internal quotation marks omitted). When the attack is factual, "the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Id. Therefore, "no presumptive truthfulness attaches to [the] plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Id.

For the reasons discussed in Part IV.A., the Rule 12(b)(1) analysis takes the form of a facial challenge. That challenge also properly includes consideration of the contract at issue, which is appended to AMCOAL's motion to dismiss.

III. BACKGROUND

The facts essential to resolution of the motion to dismiss, construed in Mr. Stinson's favor, are as follows. Beginning in September 2008, Mr. Stinson received high electric bills for properties he owns in Southeast Alabama. Mr. Stinson blames the increased costs on rate hikes he says resulted from the failure of coal suppliers, including AMCOAL, to abide by their contracts for coal deliveries to PowerSouth Energy Cooperative ("PowerSouth") for electric power generation.

PowerSouth is a "non-profit power generation and transmission cooperative" that sells wholesale power to its member retail electric distribution cooperatives. (Am. Compl. ¶ 3.) Hence, "PowerSouth generates power[, ] and its member cooperatives distribute that power." (Am. Compl. ¶ 5.) Covington Electric Cooperative, Inc. ("CEC"), and South Alabama Electric Cooperative ("SAEC"), as member cooperatives, purchase electricity from PowerSouth. (Am. Compl. ¶ 9.) CEC and SAEC are "non-profit member-owned[, ] retail electric distribution cooperatives" that serve rural communities in south Alabama, including the communities (Enterprise and Glenwood) where Mr. Stinson owns three parcels of property. (Am. Compl. ¶¶ 2, 4.) Mr. Stinson purchases power from CEC and SAEC to service these properties and, thus, is a member of both CEC and SAEC.

Mr. Stinson alleges that, at some point between January 2008 and July 30, 2008, AMCOAL breached a coal supply agreement dated November 1, 2003 ("the Agreement"), between it and PowerSouth by failing to supply coal to PowerSouth in accordance with the Agreement's terms. (Am. Compl. ¶¶ 7-8.)

AMCOAL's breach of the Agreement "resulted in PowerSouth paying a higher price to other suppliers of coal in order to keep its power plant in production." (Am. Compl. ¶ 9.) PowerSouth passed those increased costs to its retail electric distribution cooperatives, including CEC and SAEC, which in turn passed the costs to their own members, including Mr. ...


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