IRR Gas Station Corp. v. PUMA Energy Caribe, LLC.

Decision Date22 July 2020
Docket NumberCIVIL NO. 19-2146 (GAG)
PartiesIRR GAS STATION CORP. Plaintiff, v. PUMA ENERGY CARIBE, LLC. Defendant.
CourtU.S. District Court — District of Puerto Rico

Plaintiff IRR Gas Station Corp. ("IRR Gas" or "Lessor") filed suit against Defendant PUMA Energy Caribe ("Puma" or "Lessee") in the Commonwealth of Puerto Rico Court of First Instance alleging breach of contract and requesting compensatory damages. (Docket No. 1). On December 20, 2019, Defendant removed the case to this Court based on diversity jurisdiction, 28 U.S.C. §1441, arguing that the controversy involves declaratory relief that exceeds $75,000, 18 U.S.C. §1332(a). Id.

Pending before the Court is Defendant's Motion to Dismiss for lack of subject matter jurisdiction, FED. R. CIV. P. 12(b)(1), and failure to state a claim upon which relief can be granted pursuant to FED. R. CIV. P. 12(b)(6). (Docket No. 9). Defendant also avers that the complaint should be dismissed for lack of standing or ripeness. Id. at 11. At the same time, Defendant posits that the breach of contract claim fails because Puma has complied with the rent payments in the lease agreements. Id. IRR Gas timely opposed Defendants' motions to dismiss. (Docket No. 16).

After reviewing the parties' submissions and the pertinent law, the Court DENIES Defendant's Motion to Dismiss at Docket No. 9.

I. Relevant Facts and Procedural Background

IRR Gas alleges that between May and September 2013, it leased the Service Stations 936 and 561 to Puma. (Docket No. 1-1 ¶¶ 5, 14). Plaintiff posits that Defendant has complied with the payments, yet failed to provide the adequate equipment and property maintenance, as required by the parties' contracts. Id. ¶ 18. According to IRR Gas, the cost of this maintenance, "throughout the years is calculated in a sum of no less than $100,000.00, per each of the stations." Id. ¶ 23.

Plaintiff also contends that Defendant breached the contracts by failing to repair the damages sustained after Hurricane María, not filing the required report to the Environmental Quality Board ("EQB") and not obtaining property and public liability's insurance, as established in the leases. Id. ¶¶ 24-26. IRR Gas avers that its loss, for this claim's purpose, "is valued in a sum of no less than $2,000,000.00 for each of the stations." Id. ¶ 27. Furthermore, the damages caused by the risk of losing the permits, due to the service stations' closure, is calculated in the sum of $1,500,000.00 for each of the stations. Id. ¶28.

On January 23, 2020, Puma filed a motion to dismiss IRR Gas's Complaint under FED. R. CIV. P. 12(b)(1) and Rule 12(b)(6). (Docket No. 9). Defendant argues that Plaintiff lacks standing to sue as it "has not suffered an injury in fact and these claims are abstract and/or hypothetical." Id. at 14. In the alternative, Puma posits that Plaintiff's claims should be dismissed at this stage under the doctrine of ripeness provided that the events in the Complaint have not occurred. Id. Defendant alleges that Plaintiff's breach of contract claim is not actionable since Puma has complied with the payments of both service stations. Id. at 15. Moreover, Defendant states that Plaintiff is responsible for restoring the service stations because the damages suffered were caused by Hurricane María, an unforeseeable event and the lease agreements' clauses state that the Lessor is responsible for restoring any part of the properties damaged or destroyed "by any cause not attributable or ascribable to Lessee." Id. at 16.

Plaintiff opposed, (Docket No. 16), and Defendant replied. (Docket No. 23).

II. Standard of Review

As courts of limited jurisdiction, federal courts must construe their jurisdictional grants narrowly. See Destek Grp., Inc. v. State of New Hampshire Pub. Utilities Comm'n, 318 F.3d 32 (1st Cir. 2003). When subject matter jurisdiction is challenged under Rule 12(b)(1), FED. R. CIV. P. 12(b)(1), the party asserting jurisdiction carries the burden of demonstrating its existence. See Valentín v. Hospital Bella Vista, 254 F.3d 358, 62-63 (1st Cir. 2001). The Court, when deciding whether to dismiss a complaint for lack of subject matter jurisdiction, "may consider whatever evidence has been submitted, such as . . . depositions and exhibits." Aversa v. United States, 99 F.3d 1200, 1210 (1st Cir. 1996). See also Torres v. Bella Vista Hosp., Inc., 523 F.Supp.2d 123, 132 (D.P.R. 2007). Motions brought under Rule 12(b)(1) are subject to the same standard of review as Rule 12(b)(6). See Negrón-Gaztambide v. Hernández-Torres, 35 F.3d 25, 27 (1st Cir. 1994); Torres, 523 F. Supp. 2d at 132.

Similarly, when considering a motion to dismiss for failure to state a claim upon which relief can be granted, FED. R. CIV. P. 12(b)(6), the Court analyzes the complaint in a two-step process under the current context-based "plausibility" standard established by the Supreme Court. See Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir.2012) (citing Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011) which discusses Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). First, the Court must "isolate and ignore statements in the complaint that simply offer legal labels and conclusions or merely rehash cause-of-action elements." Schatz, 669 F.3d at 55. A complaint does not need detailed factual allegations, but "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678-79. Second, the court must then "take the complaint's well-pled (i.e., non-conclusory, non-speculative) facts as true, drawing all reasonable inferences in the pleader's favor, and see if they plausibly narrate a claim for relief."Schatz, 669 F.3d at 55. Plausible, means something more than merely possible, and gauging a pleaded situation's plausibility is a context-specific job that compels the court to draw on its judicial experience and common sense. Id. (citing Iqbal, 556 U.S. at 678-79). This "simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Twombly, 550 U.S. at 556.

"[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-'that the pleader is entitled to relief.'" Iqbal, 556 U.S. at 679 (quoting FED. R. CIV. P. 8(a)(2)). If, however, the "factual content, so taken, 'allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,' the claim has facial plausibility." Ocasio-Hernández, 640 F.3d at 12 (quoting Iqbal, 556 U.S. at 678).

III. Discussion and Legal Analysis
A. Standing and Ripeness

Defendant argues that Plaintiff lacks standing because the following damages are speculative: (1) the EQB may impose sanctions and close the stations; (2) Plaintiff has lost clientele due to the service stations being closed or that it has a "contractual right" to receive benefits from the stations' clientele, and (3) the Service Stations' closures will lead to permit loss and it would take effort and time to acquire them. (Docket No. 9 at 14-15). Defendant argues that, in the alternative, Plaintiff's claims should be dismissed pursuant to the ripeness doctrine since "the alleged events have not even occurred." Id. at 14.

Plaintiff opposed Puma's motion to dismiss and posits that Defendant's failure to comply with the permits and the "Regulations of Underground Storage Control" is not speculative considering the EQB has already imposed fines. (Docket No. 16 at 8-9). Additionally, Plaintiff noted that it is at risk of permanently losing its license to operate gas service stations after Pumafailed to pay the EQB fines. Id. Defendant replied to Plaintiff's opposition and avers that IRR Gas does not address Puma's lack of standing claim, effectively waiving the argument, and thus its motion to dismiss "should be granted in its entirety." (Docket No. 23 ¶7).

Article III of the Constitution limits federal jurisdiction to actual controversies. U.S. CONST. art. III, § 2, cl. 1. See Katz v. Pershing, LLC, 672 F.3d 64, 71 (1st Cir. 2012). A controversy exists when plaintiff shows "a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends." Id. (citing Baker v. Carr, 369 U.S. 186, 204 (1962)). When considering a motion to dismiss for lack of standing before the discovery stage, a court must "accept as true all well-pleaded factual averments in the . . . complaint and indulge all reasonable inferences therefrom in his favor." Reddy v. Foster, 845 F.3d 493, 497 (1st Cir. 2017) (citing Kerin v. Titeflex Corp., 770 F.3d 978, 981 (1st Cir. 2014)).

Standing requires that a plaintiff complies with three elements: "injury in fact, traceability, and redressability." ITyX Sols. AG v. Kodak Alaris, Inc., 952 F.3d 1, 9 (1st Cir. 2020) (citing Kerin, 770 F.3d at 981). On the other hand, the ripeness doctrine "seeks to prevent the adjudication of claims relating to 'contingent future events that may not occur as anticipated, or indeed may not occur at all.'" Reddy, 845 F.3d at 500 (citing Texas v. United States, 523 U.S. 296, 300 (1998)). During an analysis under this doctrine, the court must analyze "whether there is a sufficiently live case or controversy, at the time of the proceedings, to create jurisdiction in the federal courts." Id. at 501 (citing Roman Catholic Bishop of Springfield v. City of Springfield, 724 F.3d 78, 89 (1st Cir. 2013)). When deciding to withhold a decision for ripeness Court must also analyze "the harm to the parties seeking relief that would come to those parties." Id. (citing Labor Relations Div. of Constr. Indus. of Mass., Inc. v. Healey, 844 F.3d 318, 330 (1st Cir. 2016)).

As a threshold matter, the Court stresses that...

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