Earl v. Boeing Co.
| Decision Date | 14 February 2020 |
| Docket Number | Civil Action No. 4:19-cv-00507 |
| Citation | 611 F.Supp.3d 345 |
| Parties | Damonie EARL, Linda Rugg, Alesa Beck, Timothy Blakey, Jr., Stephanie Blakey, Marisa Thompson, Muhammad Muddasir Khan, Elizabeth Cooper, John Rogers, Valerie Mortz-Rogers, and Lakesha Goggins, Each Individually and on Behalf of All Others Similarly Situated v. The BOEING COMPANY and Southwest Airlines Co. |
| Court | U.S. District Court — Eastern District of Texas |
Yavar Bathaee, Andrew Chan Wolinsky, Brian James Dunne, Bathaee Dunne LLP, New York, NY, Edward Maxwell Grauman, Bathaee Dunne LLP, Austin, TX, Barron McGinnis Flood, Michael Pomerantz, Pierce Bainbridge Beck Price & Hecht LLP, New York, NY, Andrew Michael Williamson, Pierce Bainbridge Beck Price & Hecht LLP. Washington, DC, Elizabeth L. DeRieux, Capshaw DeRieux LLP, Gladewater, TX, for Damonie Earl, Linda Rugg, Alesa Beck, Timothy Blakey, Jr., Stephanie Blakey, Marisa Thompson, Muhammad Muddasir Khan, Elizabeth Cooper, John Rogers, Valerie Mortz-Rogers, Lakesha Goggins.
Benjamin L. Hatch, McGuire Woods, Norfolk, VA, Brian D. Schmalzbach, Jeremy S. Byrum, McGuire Woods LLP, Richmond, VA, Clyde Moody Siebman, Elizabeth Siebman Forrest, Jeffrey Jack Burley, Siebman Forrest Burg & Smith LLP, Sherman, TX, Thomas Miles Farrell, McGuireWoods LLP, Houston, TX, for the Boeing Company.
Michael Alan Swartzendruber, Jason K. Fagelman, James Vincent Leito, IV, Philip Alexandar Tarpley, Norton Rose Fulbright US LLP, Dallas, TX, Geraldine W. Young, Norton Rose Fulbright US LLP, Houston, TX, for Southwest Airlines Co.
Pending before the Court are two motions to dismiss: (1) Defendant Southwest Airlines' ("Defendant Southwest") Motion to Dismiss Pursuant to Rules 12(b)(1), 12(b)(6), and 9(b) or, in the Alternative, Motion to Strike the Class Allegations (Dkt. #19); and (2) Defendant The Boeing Company's ("Defendant Boeing") Motion to Dismiss for Lack of Standing and Failure to State a Claim (Dkt. #21). Having considered Defendant Southwest and Defendant Boeing's (collectively, "Defendants") motions, the relevant pleadings, and the December 9, 2019 hearing, the Court finds that the motions should be granted in part and denied in part.
This litigation centers around the allegedly fraudulent representations and conspiratorial conduct of Defendants (Dkt. #1¶ 8). Plaintiffs Damonie Earl, Linda Rugg, Alesa Beck, Timothy Blakey, Jr., Stephanie Blakey, Marisa Thompson, Muhammad Muddasir Khan, Elizabeth Cooper, John Rogers, Valerie Mortz-Rogers, and Lakesha Goggins (collectively, "Plaintiffs") bring their own claims against Defendants and seek to represent a putative class of similarly situated individuals who—they claim—were overcharged at the moment they purchased their airplane tickets (Dkt. #1¶ 325).
According to Plaintiffs, increasing competition from Airbus, another aircraft manufacturer, caused Defendant Boeing to look for shortcuts in order to get its new airplanes to customers quicker (Dkt. #1¶ 96). After the launch of the Airbus A320neo, Plaintiffs contend that Defendant Boeing chose to adapt one of its existing aircraft into a new product to compete with Airbus (Dkt. #1¶ 97). Defendant Boeing wanted to save on design and development costs with the new plane, and it also wanted to avoid forcing pilots—who were used to flying the old Boeing 737s—from having to learn to fly an entirely new aircraft (Dkt. #1¶¶ 98–99). Enter the Boeing 737 MAX 8 (the "MAX 8") (Dkt. #1¶ 98).
Defendant Boeing allegedly took the old 737 and modified the engine, engine position, and the airplane's nose gear in an effort to make the MAX 8 more fuel efficient (Dkt. #1¶ 100). But because the engines were more powerful and mounted differently than on prior models, Defendant Boeing had to combat the increased risk that the nose of the MAX 8 would pitch up, which could result in a deadly aerodynamic stall (Dkt. #1¶¶ 101–02). To combat the tendency of the nose to pitch up, Defendant Boeing designed the Maneuvering Characteristics Augmentation System ("MCAS"), a computer-controlled system designed to bring the MAX 8's nose down in the event of a pitch up without the need for pilot input (Dkt. #1¶¶ 104–06).
Plaintiffs state that the "MCAS was defective by design—fatally so," and claim that Defendants knew of this defect (Dkt. #1¶ 108). Plaintiffs also assert that Defendant Boeing made misrepresentations to regulators during the MAX 8 approval process and that Defendant Southwest was involved with the development and testing of the MAX 8 (Dkt. #1¶¶ 152–78). The purpose of these misrepresentations, as Plaintiffs allege, was to signal that the MAX 8 was safe in order to keep demand and ticket prices up (Dkt. #1¶¶ 2, 46, 200, 214, 238, 247–48, 259, 334, 339–40).
But Defendants' claims of safety were soon undermined by two tragic MAX 8 crashes: both the Lion Air Flight 610 and Ethiopian Airlines Flight 302 crashed due to the alleged MCAS defect (Dkt. #1¶¶ 25, 36, 183, 221). Every passenger died (Dkt. #1¶¶ 25, 221). Soon after the crashes, the Federal Aviation Administration ("FAA") grounded the MAX 8 in the United States (Dkt. #1¶ 252). According to Plaintiffs, it was only after the FAA grounded the plane that Defendants made "calculated admissions" about their knowledge of and actions surrounding the MAX 8's defect (Dkt. #1¶ 41).
Throughout their pleadings, Plaintiffs allege two theories of injury: (1) if Plaintiffs had known the MAX 8 was fatally defective, Plaintiffs would never have purchased tickets, so Plaintiffs want their money back; and (2) Defendants' fraudulent misrepresentations and omissions allowed Defendant Southwest to overcharge Plaintiffs for their tickets (Dkt. #1¶¶ 8, 52–53, 364–65; Dkt. #48 at pp. 42–43).
Plaintiffs do not dispute that they used the tickets they purchased to complete a flight (Dkt. #1¶¶ 55–63). And Plaintiffs "expressly disclaim any recovery in this action for physical injury resulting from the MCAS Defect" (Dkt. #1¶ 325). The relevance of the MAX 8's defect to this suit, Plaintiffs claim, is that the "injuries [nonparties] suffered in crashes as a result of the [defect] implicate Defendants Southwest and Boeing's aircraft and constitute evidence supporting various claims, including overcharge for tickets" (Dkt. #1¶ 325).
Plaintiffs allege causes of action against Defendants for: (1) violations of the Racketeer Influenced and Corrupt Organization Act ("RICO"); (2) fraud by concealment; (3) fraud by misrepresentation; (4) negligent misrepresentation; (5) unjust enrichment; (6) negligence; and (7) various claims brought on behalf of California, Florida, New York, Arizona, Indiana, and Georgia subclasses (Dkt. #1 at pp. 88–123).
On September 13, 2019, Defendants filed their motions to dismiss (Dkt. #19; Dkt. #21). Plaintiffs responded on October 11, 2019 (Dkt. #28). Defendants filed their replies on October 28, 2019 (Dkt. #34; Dkt. #35), and on November 12, 2019, Plaintiffs filed their sur-reply (Dkt. #39). On December 9, 2019, the Court held a hearing on Defendants' motions to dismiss (Dkt. #48).
Federal Rule of Civil Procedure 12(b)(1) authorizes dismissal of a case for lack of subject matter jurisdiction when the district court lacks statutory and constitutional power to adjudicate the case.
Home Builders Ass'n of Miss., Inc. v. City of Madison , 143 F.3d 1006, 1010 (5th Cir. 1998). If a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the Court will consider the jurisdictional attack under Rule 12(b)(1) before addressing any attack on the legal merits. Ramming v. United States , 281 F.3d 158, 161 (5th Cir. 2001).
In deciding the motion, the Court may consider "(1) the complaint alone; (2) the complaint supplemented by the undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the [C]ourt's resolution of disputed facts." Lane v. Halliburton , 529 F.3d 548, 557 (5th Cir. 2008) (quoting Barrera-Montenegro v. United States , 74 F.3d 657, 659 (5th Cir. 1996) ). The Court will accept as true all well-pleaded allegations set forth in the complaint and construe those allegations in the light most favorable to the plaintiff. Truman v. United States , 26 F.3d 592, 594 (5th Cir. 1994). Once a defendant files a motion to dismiss under Rule 12(b)(1) and challenges jurisdiction, the party invoking jurisdiction has the burden to establish subject matter jurisdiction. See Menchaca v. Chrysler Credit Corp. , 613 F.2d 507, 511 (5th Cir. 1980). The Court will grant a motion to dismiss for lack of subject matter jurisdiction only if it appears certain that the claimant cannot prove a plausible set of facts to support a claim that would entitle it to relief. Lane , 529 F.3d at 557.
The Federal Rules of Civil Procedure require that each claim in a complaint include a "short and plain statement ... showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). Each claim must include enough factual allegations "to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
A Rule 12(b)(6) motion allows a party to move for dismissal of an action when the complaint fails to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). When considering a motion to dismiss under Rule 12(b)(6), the Court must accept as true all well-pleaded facts in the plaintiff's complaint and view those facts in the light most favorable to the plaintiff. Bowlby v. City of Aberdeen , 681 F.3d 215, 219 (5th Cir. 2012). The Court may consider "the complaint, any documents attached to the complaint, and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint." Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC , 594 F.3d 383, 387 (5th Cir. ...
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