Remmes v. International Flavors & Frgrances, Inc.
| Decision Date | 26 September 2006 |
| Docket Number | No. C04-4061-MWB.,C04-4061-MWB. |
| Parties | Kevin REMMES, Plaintiff, v. INTERNATIONAL FLAVORS & FRGRANCES, INC., Givaudan Flavors Corp., Flavors of North America, Inc., Sensient Flavors, Inc., The Flavor & Extract Manufacturers Association of the United States, and The Roberts Group, Defendants. |
| Court | U.S. District Court — Northern District of Iowa |
Daniel M. Homolka, Minneapolis, MN, Dennis M. McElwain, Smith & McElwain, Sioux City, IA, Donald H. Loudon, Jr., J'Nan C. Kimak, Kenneth Blair McClain, Scott A. Britton-Mehlisch, Scott B. Hall, Steven Edward Crick, Humphrey, Farrington & McClain, PC, Independence, MO, for Plaintiff.
Daniel Lee Jones, Jr., Frank C. Woodside, III, J. David Brittingham, Mary-Jo Middelhoff, Matthew D. Shuler, Dinsmore & Shohl, LLP, Cincinnati, OH, Robert M. Livingston, William R. Hughes, Jr., Stuart Tinley Peters Thorn Hughes Faust & Madsen, Council Bluffs, IA, Lee M. Seese, Paul E. Benson, Paul F. Linn, Michael Best & Friedrich LLP, Milwaukee, WI, Matthew T.E. Early, Maurice B. Nieland, Rawlings Neiland Probasco Killinger Ellwanger Jacobs, et al, Jay Elliott Denne, Stanley E. Munger, Munger, Reinschmidt & Denne, Alan E. Fredregill, Patrick L. Sealey, Sioux City, IA, Michael A. Stiegel, Michael Best & Friedrich, LLP, Chicago, IL, Campbell Killefer, Maria Georges, Vincent E. Verrocchio, Venable, LLP, Alan L. Briggs, Squire, Sanders & Dempsey, LLP, Washington, DC, Bruce Alan Khula, Damond R. Mace, J. Philip Calabrese, Leslie A. Morsek, Philip M. Oliss, Stephen M. Fazio, Squire, Sanders & Dempsey, LLP, Cleveland, OH, for Defendants.
TABLE OF CONTENTS
I. INTRODUCTION AND BACKGROUND ................................... 1060
A. Procedural Background ...................................... 1060
B. Factual Background ......................................... 1061
II. LEGAL ANALYSIS ............................................... 1065
A. Rule 12(b)(6) Standards ................................... 1065
B. Statute Of Limitations .................................... 1067
C. Pleading Fraud With Specificity ........................... 1069
1. Pleading fraud under Rule 9(b) ......................... 1070
2. Use of discovery in making amendments to fraud claims... 1071
3. Application of the Rule 9(b) pleading standards......... 1072
III. CONCLUSION .................................................. 1078
I. INTRODUCTION AND BACKGROUND
On June 4, 2004, plaintiff Kevin Remmes filed a petition in Iowa District Court for Woodbury County against defendants International Flavors & Fragrances, Inc. ("IFF"), Givaudan Flavors Corp. ("Givaudan"), Flavors of North America, Inc. ("FONA"), and Sensient Flavors, Inc. ("Sensient"). In his petition, plaintiff Remmes set out claims against the four named defendants, all manufacturers, processors, importers, distributors or sellers of butter flavorings, for strict liability based on design defects and failure to warn, for negligence and for breach of a continuing duty to warn. On July 9, 2004, defendant Sensient removed this case to this court pursuant to 28 U.S.C. § 1441, alleging jurisdiction based on complete diversity of citizenship between the parties pursuant to 28 U.S.C. § 1332(a). On October 5, 2004, plaintiff Remmes filed an Amended Complaint against defendants IFF, Givaudan, FONA, Sensient, the Flavor and Extract Manufacturers Association of the United States ("FEMA"), and the Roberts Group, L.L.C. ("TRG") alleging three causes of action. The three causes of action asserted were for negligence, fraudulent concealment and civil conspiracy. The Amended Complaint also alleged that this court has subject matter jurisdiction by virtue of diversity of citizenship of the parties, 28 U.S.C. § 1332.
This court subsequently dismissed plaintiff Remmes's fraudulent concealment and civil conspiracy claims for failure to state a claim upon which relief may be granted. Specifically, the court found that plaintiff Remmes had failed to meet the specificity pleading requirements of Federal Rule of Civil Procedure 9(b) with respect to Remmes's fraudulent concealment claim.. The court, however, also granted plaintiff Remmes's request for leave to replead his fraudulent concealment and civil conspiracy claims. On December 20, 2005, plaintiff Remmes filed a Second Amended Complaint against defendants IFF, Givaudan, FONA, Sensient, FEMA, and TRG alleging the same three causes of action that were advanced in his Amended Complaint, namely negligence, fraudulent concealment and civil conspiracy.
Defendants IFF, Givaudan, and Sensient have each filed motions to dismiss the fraudulent concealment and civil conspiracy claims found in the Second Amended Complaint. Because the grounds raised in each defendant's respective motion to dismiss are identical, the court will generally refer to all three motions to dismiss as defendants' motions. Defendants' motions seek dismissal of Counts II and III on the following grounds: first, that plaintiff Remmes cannot use material obtained through discovery to amend his fraudulent concealment claim; second, that the applicable statute of limitations bars Remmes's claims for fraudulent concealment and civil conspiracy; third, that Remmes has failed to plead his claim of fraudulent concealment with sufficient particularity; and, fourth, that because Remmes's civil conspiracy claim is grounded entirely on the fraudulent concealment claim alleged in Count II it, too, must be dismissed because it is not actionable as an independent tort under Iowa law. Plaintiff Remmes has filed a resistance to defendants' motions.
On a motion to dismiss, the court must assume all facts alleged in plaintiff Remmes's Second Amended Complaint are true, and must liberally construe those allegations. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Therefore, the following factual background is drawn from plaintiff Remmes's Second Amended Complaint in such a manner.
Plaintiff Remmes resides in Sioux City, Iowa and was employed by the American Popcorn Company in Sioux City, Iowa. Defendant IFF is a New York corporation with its principal place of business in New York, New York. Givaudan is a Delaware corporation with its principal place of business in Cincinnati, Ohio. FONA is an Illinois corporation with its principal place of business in Carol Steam, Illinois. Sensient is a Wisconsin corporation with its principal place of business in Indianapolis, Indiana. Defendants IFF, Givaudan, FONA, and Sensient each design, manufacture, distribute and sell butter flavor ings marketed to entities, including the American Popcorn Company.
The butter flavorings sold by defendants IFF, Givaudan, FONA, and Sensient contain diacetyl and/or other volatile organic compounds that can cause human disease and injury. In the course of his employment at the American Popcorn Company, Remmes was exposed to butter flavorings designed, manufactured, distributed and sold by defendants IFF, Givaudan, FONA, and Sensient. Remmes alleges that as a result of this exposure that he has suffered severe and permanent injury to his person including, bronchiolitis obliterans, severe and progressive damage to the respiratory system, and extreme shortness of breath. In addition, because of his exposure, Remmes's life expectancy has been significantly reduced.
In his fraudulent concealment claim, plaintiff Remmes alleges the following with respect to defendant Givaudan:
27. Defendant Givaudan knew, or should have known, that butter flavorings and/or their constituents cause adverse health effects by at least 1991, including, but not limited to, the following:
a. Damage to human mucous membranes, and;
b. Respiratory disease.
28. Defendant Givaudan knew or should have known certain information regarding the health hazards of butter flavorings and/or their constituents including, but not limited to, the following:
a. By at least 1991, Defendant Givaudan knew that diacetyl was a health hazard when inhaled;
b. By at least 1991, Defendant Givaudan knew that the level of diacetyl in areas where butter flavorings are used could and should be monitored through air sampling c. By at least 1991, Defendant Givaudan knew that diacetyl is a hazard to human mucous membranes;
d. By at least 1992, Defendant Givaudan knew of at least three occupational exposures where persons working with Defendant Givaudan's butter flavorings were diagnosed with bronchiolitis obliterans and at least one exposure resulted in death;
e. By at least 1993, Defendant Givaudan knew that their butter flavoring workers were experiencing "breathing problems";
f. By at least 1993, Defendant Givaudan knew that even a short exposure to its butter flavorings could produce severe respiratory effects;
g. By at least 1993, Defendant Givaudan knew that persons working around butter flavorings must wear full-face respirators;
h. By at least 1993, Defendant Givaudan knew that diacetyl is a severe respiratory hazard, causing, inter alia: respiratory tract injury; focal hyperemia of the lungs; atelectasis; bloody edema of the lungs; bronchial edema, and, emphysema;
J. By at least 1993, Defendant Givaudan knew the LC50 for diacetyl;
k. By at least 1994, Defendant Givaudan knew that diacetyl is a "potential respiratory exposure" for persons working around butter flavorings;
l. By at least 1994, Defendant Givaudan knew that diacetyl volatilizes above 83F and that potential diacetyl volatilization must be minimized for worker...
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