Black Diamond Land Mgmt., LLC v. Twin Pines Coal Co.

• Decision Date: 06 July 2016
• Docket Number: Case No.: 2:14-cv-02333-RDP
• Parties: BLACK DIAMOND LAND MANAGEMENT, LLC, Plaintiff, v. TWIN PINES COAL COMPANY, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

BLACK DIAMOND LAND MANAGEMENT, LLC, Plaintiff, v. TWIN PINES COAL COMPANY, INC., et al., Defendants.

Case No.: 2:14-cv-02333-RDP

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

July 6, 2016

MEMORANDUM OPINION

I. Introduction

Plaintiff filed this action in December 2014, and has since amended its complaint twice. The parties and court are still at this late date litigating whether the pleadings state a plausible claim. However, the protracted nature of this litigation is not surprising given the fact that the property interests in dispute have intersected (or overlapped) with litigations that took place in Jefferson County Circuit Court (Bessemer Division) for approximately ten years between certain non-parties to this action—U.S. Steel Corporation, Gerald and Mary Boothe, and Willie and Mondez Haire.¹ (Doc. # 84 at 5); see also U.S. Steel Corp. v. Boothe, No. 04-cv-1235 (Ala. Cir. Ct. Jefferson Cty., Bessemer Div. 2004); U.S. Steel Corp. v. Boothe, No. 04-cv-1235.01 (Ala. Cir. Ct. Jefferson Cty., Bessemer Div. 2004); U.S. Steel Corp. v. Boothe, No. 05-cv-453 (Ala. Cir. Ct. Jefferson Cty., Bessemer Div. 2005); U.S. Steel Corp. v. Haire, No. 09-cv-127 (Ala. Cir. Ct. Jefferson Cty., Bessemer Div. 2009) (Docs. # 43, 45); U.S. Steel Corp. v. Haire, No. 09-cv-127.01 (Ala. Cir. Ct. Jefferson Cty., Bessemer Div. 2011) (Doc. # 49). The court's purpose in referencing these state court cases is not to suggest in any way that these litigations resolved Plaintiff's claims that it has become the rightful owner of any real property or mineral rights in dispute. Rather, these cases help to put in proper context exactly what is in dispute here. And, what is really in dispute here is not whether Defendants have violated RICO, the Lanham Act, or the Sherman Act. No, the crux of the dispute between these parties is a legally straight forward (though perhaps factually complex) state law question: which side has a legal claim (or the superior legal claim) to the property interests at issue here.²

This case is before the court on Defendant Drummond Company, Inc. ("Drummond")'s Motion to Dismiss Plaintiff's Second Amended Complaint (Doc. # 49), filed October 7, 2016; Defendant Molpus Timberlands Management ("Molpus")'s Motion to Dismiss or in the Alternative, Motion for Summary Judgment (Doc. # 50), filed October 7, 2016; Defendant Twin Pines Coal Company, Inc. ("Twin Pines")'s Motion to Dismiss Plaintiff's Second Amended Complaint (Doc. # 51), filed October 7, 2015; Defendant Valley Creek Land & Timber, LLC ("Valley Creek")'s Motion to Dismiss Plaintiff's Second Amended Complaint (Doc. # 59), filed October 30, 2015; Intervenor-Defendant RGGS Land & Minerals, Ltd., L.P. ("RGGS")'s Motion to Dismiss (Doc. # 73), filed November 5, 2015; and Defendant SFW Birmingham, LLC ("SFW")'s Motion to Dismiss Plaintiff's Second Amended Complaint (Doc. # 76), filed December 4, 2015. The Motions are fully briefed. (Docs. # 49, 50, 51, 56, 59, 62, 63, 67, 70, 72, 73, 76, 79, 80, 81, 82). On April 5, 2016, the court heard oral argument on the Motions. (Doc. # 84). Subsequently, the parties submitted post-hearing briefs. (Docs. # 86, 87). After careful review, and for the following reasons, Defendants' Motions are due to be granted in part as to Plaintiff's federal claims, and the state law claims are due to be dismissed under 28 U.S.C. § 1367(c).

II. Background Facts³

Plaintiff is an Alabama corporation located in Birmingham, Alabama. (Doc. # 48 at ¶ 3). It purports to be the successor in interest of Southern Iron & Steel (which was chartered on December 12, 1898, by the Alabama Legislature). (Id.). Defendants are either Alabamacorporations or out of state limited liability companies and partnerships, which are registered to do business in Alabama.⁴ (Id. at ¶¶ 4-8). In summary, Plaintiff alleges that Defendants: (1) without receiving authorization or providing financial compensation, wrongfully extracted timber and coal owned by Plaintiff (see Doc. # 48); (2) misstated and misrepresented the facts regarding the origin of those resources by labeling them with Defendants' own logos or symbols, and selling and exporting them (id.); and (3) refused to share any profit with Plaintiffs. (Id.). There has previously been substantial litigation over property rights which were conducted in state court. More specifically, U.S. Steel sued Plaintiff in state court at an unspecified time, and an order was issued establishing boundary lines. (Doc. # 48 at ¶ 9). Plaintiff alleges no further information concerning that order or those boundary lines.⁵ Plaintiff avers that past state court litigations over land disputes do not bar these claims because Plaintiff's claim of ownership rights over minerals and natural resources is an issue separate and distinct from the ownership of the surface land. (See id.).

On August 2, 2010, Twin Pines authorized a pre-blast survey of what Plaintiff alleges to be its premises. (Doc. # 48 at ¶ 10). On August 25, 2010, Plaintiff sent a letter of ownership to Twin Pines, followed by an October 7, 2010 letter accusing Twin Pines of commercially exploiting Plaintiff's ownership of natural resources. (Id. at ¶¶ 11-12).

Additionally, Plaintiff avers that Drummond and Twin Pines, acting as an enterprise, conducted coal mining operations underneath Plaintiff's property without its permission but under the guise of state permits. (Doc. # 48 at ¶¶ 21-23, 27-29, 35). These mining operations were prefaced by Drummond sending Plaintiff blasting notices on December 19, 2011, andDecember 26, 2012. (Id. ¶¶ 22-23). Further, Plaintiff alleges that on June 11, 2012, Drummond met with it concerning Drummond's interest in acquiring ownership of its natural resources. (Id. at ¶ 24). Subsequently, on July 18, 2012, Plaintiff sent Drummond a letter concerning another meeting and a possible sale of mineral rights. (Id. at ¶ 25). Plaintiff sent another letter on March 21, 2013, and included a contract for the purchase of its natural resources. (Id. at ¶ 26). It avers that Drummond and Twin Pines conducted blasting and coal extraction throughout this time. (Id. at ¶ 27-29).

Similarly, Plaintiff avers that Molpus, SWF, and Valley Creek received state permits and conducted multiple commercial timber operations on Plaintiff's land without its permission. (Doc. # 48 at ¶¶ 16, 36). Plaintiff further alleges that these Defendants sold Plaintiff's timber, without its authority, in an amount exceeding $10,000. (Id. at ¶¶ 17-18).

Based on these allegations, Plaintiff asserts federal causes of action against all Defendants for violations of (1) Section 43 of the Lanham Act, and (2) RICO based on 18 U.S.C. §§ 1952, 1953, 2314, and 2315. (See Doc. # 48 at ¶¶ 30-34, 37-44, 48-57, 79-87). Additionally, Plaintiff alleges state law claims against all Defendants sounding in conversion, negligence, and civil conspiracy. (Id. at ¶¶ 58-66, 73-75). Plaintiff also has sued Drummond and Twin Pines alleging violations of the Sherman Act (15 U.S.C. §§ 2 & 3) and claiming that they conspired together to monopolize coal commerce within and without Alabama, thereby preventing Plaintiff from accessing and exercising dominion over its own coal, including by prohibiting competition. (Id. at ¶¶ 45-47, 67-72). Finally, pursuant to the Declaratory Judgment Act, Plaintiff requests a declaration concerning: (1) its ownership rights and privileges to minerals and other natural resources at issue; and (2) its rights to the natural resources below thesurface of the land where Defendants are conducting mining operations, as well as a determination of Plaintiff's timber rights. (Id. at ¶¶ 76-78).

Nowhere in the Second Amended Complaint does Plaintiff provide a description of its alleged property and the boundary lines decided in the referenced state court action. Likewise, the Second Amended Complaint does not describe how Plaintiff purportedly owns the coal and timber it claims have been taken (and are still being taken) by Defendants. And, Plaintiff does not allege facts concerning the creation of any enterprises or conspiracies, including any overt acts. Finally, Plaintiff has not attached any documents to the Second Amended Complaint.

III. Procedural History

Plaintiff filed its initial Complaint on December 4, 2014, against only Molpus, Drummond, and Twin Pines, and requested only a declaratory judgment. (Doc. # 1). Plaintiff attached copies of deeds and blasting notices, and other documents, to that Complaint. (Doc. # 1-1). The Defendants filed initial motions to dismiss, arguing that this court lacked subject-matter jurisdiction and that Plaintiff failed to state a claim. (Docs. # 8, 9, 15). Subsequently, Plaintiff filed its First Amended Complaint for Declaratory Judgment against the same three Defendants. (Doc. # 19). It did not contain any attachments. (See id.). The court ordered the parties to confer face-to-face concerning the property allegedly at issue. (Doc. # 25). On March 17, 2015, the parties filed a Joint Report on Parties' Meeting.⁶ (Doc. # 26). The Defendants thenfiled a second round of motions to dismiss. (Docs. # 23, 29, 30). The case was delayed when Plaintiff changed attorneys and retained the present counsel.

On September 23, 2015, Plaintiff filed its Second Amended Complaint, naming additional Defendants and claims, as further set forth above. (Doc. # 48). Defendants subsequently filed their respective motions to dismiss pursuant primarily to Federal Rule of Civil Procedure 12(b)(6), which the parties have fully briefed.⁷ (Docs. # 49, 50, 51, 56, 59, 62, 63, 67, 70, 72, 73, 76, 79, 80, 81, 82). The court heard oral argument on the Motions on April 5, 2016. (Doc. # 84). At oral argument, Plaintiff implored the court that it was researching chains of title and other ownership information with an expert as quickly as possible, and argued that its case should remain in this court at least through discovery. (Id. at 17:10-19:12, 24:7-25:22). Def...