355 F.3d 345 (5th Cir. 2003), 02-41377, Richard v. Hoechst Celanese Chemical Group, Inc.

Docket Nº:02-41377
Citation:355 F.3d 345
Party Name:Richard v. Hoechst Celanese Chemical Group, Inc.
Case Date:December 19, 2003
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
FREE EXCERPT

Page 345

355 F.3d 345 (5th Cir. 2003)

Richard R. RICHARD, Jr., on behalf of himself and all others similarly situated, Plaintiff-Appellant,

v.

HOECHST CELANESE CHEMICAL GROUP, INC., Hoechst Celanese Chemical Group; Shell Oil Company, doing business as Shell Chemical Company; Hoechst Celanese Corporation, Hoechst Celanese Corporation; E.I. DuPont De Nemours and Company, Defendants-Appellees.

No. 02-41377.

United States Court of Appeals, Fifth Circuit

December 19, 2003

Page 346

[Copyrighted Material Omitted]

Page 347

Mitchell A. Toups, Weller, Green, Toups & Terrell, Beaumont, TX, Arthur R. Miller (argued), Harvard University School of Law, Cambridge, MA, Damon Michael Young, Sr., Young, Pickett & Lee, Texarkana, TX, George Robert Blakey (argued), Notre Dame Law School, Notre Dame, IN, for Plaintiff-Appellant.

Paul M. O'Connor (argued), Seth Alan Moskowitz, Kasowitz, Benson, Torres & Friedman, New York City, Jerry Lamar Mitchell, James W. Bartlett, Jr., Kasowitz, Benson, Torres & Friedman, Houst on, TX, for Hoechst Celanese Chemical Group and Hoechst Celanese Corp.

David T. Harvin (argued), Erica Lee Krennerich, Vinson & Elkins, Houston, TX, for Shell Oil Co.

Kathleen Taylor Sooy (argued), Luther Zeigler, Crowell & Moring, Washington, DC, Jim C. Ezer, Schirrmeister Ajamie, Houston, TX, for E. I. DuPont De Nemours & Co.

Appeal from the United States District Court for the Eastern District of Texas.

Before WIENER, CLEMENT, and PRADO, Circuit Judges.

CLEMENT, Circuit Judge:

This case arises from a class action lawsuit brought by Richard R. Richard ("Richard"), on behalf of himself and a putative class consisting of parties who allegedly suffered damages from inherently defective polybutylene ("PB") plumbing systems installed in their homes. Richard alleges that Hoechst Celanese Chemical Group, Hoechst Celanese Corporation (collectively "Hoechst"), Shell Oil Company ("Shell"), and E.I. DuPont Nemours ("DuPont") caused the putative class's injuries through their manufacture, promotion, and sale of PB for use in residential and commercial plumbing systems. Richard appeals the district court's dismissal of his class action lawsuit for lack of subject matter jurisdiction with regard to his 42 U.S.C. § 1983 due process claim, and dismissal for failure to state a claim upon

Page 348

which relief can be granted with regard to his RICO claims.

I. FACTS AND PROCEEDINGS

Richard owns and lives in a mobile home with a PB plumbing system. Over time, the leaks from the PB plumbing system have caused substantial damage to Richard's mobile home. Richard contends that the PB plumbing system is inherently defective.

PB is a by-product of oil refining. Shell, the exclusive seller of PB resin in the late 1970's, developed flexible PB pipes, which other companies like DuPont and Hoechst manufactured. DuPont and Hoechst also used PB resin to develop raw materials for joint fittings in PB plumbing systems.

A. Richard's Allegations

Richard alleges that Shell, DuPont, and Hoechst (collectively the "Appellees") administered a complex scheme to mislead buyers into believing that PB plumbing systems were suitable for use as potable water distribution systems. To this end, the Appellees allegedly claimed that PB plumbing systems were superior to copper plumbing systems based on their representations that PB systems were lightweight, inexpensive, better able to withstand freezing temperatures, easier to install and purportedly enjoyed a lifetime of 50 years. According to Richard, the Appellees knew that these representations were untrue because their scientists allegedly reported that the PB plumbing systems would degrade even when exposed to low concentrations of chlorine typically found in municipal water systems. Richard claims that in spite of this knowledge, the Appellees concealed the information and continued to market these products until approximately 1996.

Richard further claims that before purchasing his mobile home in 1997, he inquired about its plumbing system. The seller informed him that the mobile home was equipped with an exceptionally reliable PB plumbing system that would likely outlast the mobile home itself. According to Richard, the seller unwittingly made this misrepresentation in reliance on the promotional materials that the Appellees promulgated. Taking these misrepresentations into consideration, Richard purchased the home.

B. The Cox and Spencer Class Action Settlements

The defective PB plumbing systems caused considerable litigation. In 1994, a group of plaintiffs reached a class action settlement in a Texas state court with the Appellees, but the Texas court rejected the settlement. Beeman v. Shell Oil Co., No. 93-047363 (Dist. Ct., Harris County, Tex.). In the meantime, other plaintiffs filed separate PB class actions in Alabama state court and Tennessee state court. Spencer v. Shell Oil Co., No. CV94-074 (Cir. Ct., Greene County, Ala.); Cox v. Shell Oil Co., No. 18,844, 1995 WL 775363 (Tenn.Chanc. Ct., Obion County, Nov. 17, 1995). In 1995, the Appellees entered into a class action settlement in Cox. The Tennessee state court approved a national settlement, which required Shell and Hoechst to contribute $950 million to replace eligible consumers' leaking PB plumbing systems and to reimburse them for the property damage which the leaks had caused. In Spencer, the Alabama state court approved a class action settlement that required DuPont to contribute further sums toward the repair and replacement of PB plumbing systems.

C. Proceedings in the Present Action

Richard filed his Original Class Action Complaint in the Eastern District of Texas on January 10, 2000, on behalf of himself

Page 349

and a class of similarly situated persons pursuant to Federal Rule of Civil Procedure Rule 23. In his Second Amended Complaint, he defined the Class as follows:

All Texas citizens, residents and entities authorised [sic] to do business in Texas that own plumbing systems in structures in Texas and elsewhere, in which there is polybutylene plumbing and over which Tennessee and Alabama courts lacked subject matter jurisdiction.

All U.S. citizens and entities that were excluded from the settlement classes of Cox v. Shell Oil Co., No. 18,844, 1995 WL 775363 (Tenn. Chanc. Ct., Obion City) and Spencer v. Shell Oil Co., No. CV94-074 (Greene Cty., Ala.) because defects in their polybutylene plumbing systems were defined as non-qualifying. All U.S. citizens and entities that own structures containing polybutylene plumbing systems and have never participated in a polybutylene class action in a court of competent personal and subject matter jurisdiction.

Richard claimed that the Appellees were liable for the damages that he and the class members sustained as a result of the leaks in their PB plumbing systems. The complaint cited theories of conspiracy, strict liability, negligence, and breach of implied warranties. Richard also asserted that the Appellees violated his due process rights, giving rise to a cause of action under 42 U.S.C. § 1983. He based this assertion on his allegation that the Appellees and class counsel in Cox colluded in setting up procedural safeguards for class member certification. Richard also alleged that as an absent class member of the Cox and Spencer suits, he did not receive adequate notice, had no opportunity to opt-out, and did not receive adequate representation. Finally, Richard amended his complaint to include claims under 18 U.S.C. § 1962(a) of the RICO Act.

On May 25, 2001, Richard and DuPont reached an agreement and jointly moved for preliminary class certification as to DuPont only, and for preliminary approval of a settlement agreement. Shell and Hoechst opposed the motion. On March 30, 2002, the district court issued its memorandum and opinion, holding that: (1) the court did not have jurisdiction over Richard's § 1983 claim because of the Rooker-Feldman doctrine; (2) the court had subject matter jurisdiction over the federal RICO claims, but those claims failed to state a claim upon which the court could grant relief under Federal Rule of Civil Procedure 12(b)(6); and (3) Richard did not satisfy requirements for class certification.

Richard timely appeals the district...

To continue reading

FREE SIGN UP