RMCO Holdings, LLC v. Golden Trading & Transp.
| Decision Date | 01 February 2023 |
| Docket Number | Civil Action 22-cv-00650-NYW-KLM |
| Court | U.S. District Court — District of Colorado |
| Parties | RMCO HOLDINGS, LLC, a Delaware limited liability company, and ROCKY MOUNTAIN CRUDE OIL, LLC, a Texas limited liability company, Plaintiffs, v. GOLDEN TRADING & TRANSPORT, LLC, a Colorado limited liability company, WILLIAM S. DICKEY, individually, RODNEY HILT, individually, and CHRISTOPHER A. HIMES, individually, Defendants. |
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
This matter is before the Court on Defendant Rodney Hilt's Motion to Dismiss Amended Complaint Pursuant to F.R.C.P 12(b)(1) and (6) [#63] (“Hilt's Motion”) and on Defendants Golden Trading & Transport, LLC (“GT&T”) and William S. Dickey's (“Dickey”) Partial Motion to Dismiss First Amended Complaint Pursuant to F.R.C.P. 12(b)(1) and 12(b)(6) [#65] (“GT&T's Motion”). Defendant Christopher A. Himes (“Himes”) filed a Joinder [#64] to Hilt's Motion [#63] and a Joinder [#66] to GT&T's Motion [#65]; Defendants GT&T and Dickey filed a Joinder [#67] to Hilt's Motion [#63]; and Defendant Hilt filed a Joinder [#68] to Defendant GT&T's Motion [#65]. Plaintiffs thereafter filed six Responses [#69, #70, #71, #72, #73, #74], one to each Motion [#63, #65] and Joinder [#64, #66, #67, #68]. Defendants then filed Replies [#83, #84, #86] or Joinders [#85, #87, #88] to the Replies [#83, #84, #86]. Pursuant to 28 U.S.C. § 636(b)(1)(A) and D.C.COLO.LCivR 72.1(c), the Motions [#63, #65] have been referred to the undersigned for a recommendation regarding disposition. See [#78]. The Court has reviewed the briefs, the entire case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Court RECOMMENDS that Defendant Hilt's Motion [#63] be GRANTED and that Defendant GT&T and Dickey's Motion [#65] be GRANTED in part and DENIED in part.
According to Plaintiffs' detailed Amended Complaint [#47], [1]Plaintiff Rocky Mountain Crude Oil, LLC (“RMCO”):
[I]s a provider of midstream energy services operating in Colorado, Montana, Nebraska, New Mexico, North Dakota, Texas and Wyoming, and offers crude oil transportation and logistics services to its customers. RMCO's fleet of tractors, double bottom trucks, and crude oil transport trailers moves its customers' crude oil in the major crude oil supply basins in the continental United States. RMCO also owns and/or leases various injection stations and terminals. In addition to providing midstream energy services and since January 1, 2016, RMCO has developed a portfolio of crude oil purchases and sales with producers and marketers located currently in North Dakota, Montana, and Wyoming. In addition to the purchases and sales of crude oil, RMCO provides division order and distribution services to producers and others.
Am. Compl. [#47] ¶¶ 13-14. Plaintiff RMCO Holdings, LLC (“RMCO-H”) was formed on October 23, 2015, and was thirty percent owned by Mercuria Energy America, LLC (“Mercuria”). Id. ¶¶ 10-11. “In November 2015, Mercuria agreed to purchase all of the issued and outstanding membership interests in RMCO from Enterprise Crude Oil LLC,” (“Enterprise”) and further “agreed to transfer to RMCO-H all of Mercuria's rights to purchase the issued and outstanding membership interests in RMCO, together with all related liabilities and obligations of Mercuria to Enterprise in connection with the acquisition of RMCO.” Id. ¶¶ 12, 15. In short, RMCO-H became the 100% owner of RMCO as a result of these transactions. Id. ¶ 15.
Defendant Dickey was the Chief Operating Officer (“COO”) and Chief Financial Officer (“CFO”) of both RMCO-H and RMCO until June 24, 2019. Id. ¶ 17. Defendant Himes was the Director of Corporate Development of RMCO until June 24, 2019. Id. ¶ 18. In addition, a Board of Managers managed the affairs of RMCO-H. Id. ¶ 20. Until June 24, 2019, the three managers were Defendant Dickey; a non-party, Christopher A. Helms (“Helms”), who was the President and Chief Executive Officer (“CEO”) of both RMCO-H and RMCO; and Defendant Hilt, who was Vice-President-Midstream with Mercuria. Id. ¶¶ 16, 20.
On October 31, 2018, a limited liability company owned by Defendant Dickey and his wife acquired Defendant GT&T. Id. ¶ 34. Plaintiffs allege that Defendants Dickey, Hilt, and Himes “proceeded to use GT&T surreptitiously and unlawfully to misappropriate Plaintiffs' business opportunities, use money of Plaintiffs for the benefit of Defendants, deprive Plaintiffs of the honest and faithful services of RMCO employees, and take confidential and proprietary property, information and material while employed by Plaintiffs (in the case of Dickey and Himes) and while serving as a Manager of RMCO-H (in the case of Dickey and Hilt).” Id. The precise details of the alleged scheme, as laid out in detail in the Amended Complaint [#47] are generally not necessary for adjudication of the Motions [#65, #67] (and, where they are, are discussed in the Analysis section below), but, in short, the individual Defendants are alleged to have been “diverting commodity purchase contracts with crude oil producers . . . from RMCO to GT&T.” Id. ¶ 37. On June 24, 2019, RMCO terminated its employment of Defendants Dickey and Himes, and Defendants Dickey and Hilt were removed as managers of RMCO-H. Id. ¶¶ 17-18, 20, 37.
As a result of these allegations, Plaintiffs bring ten claims against Defendants, seeking damages: (1) Count I: fraudulent concealment, asserted by Plaintiff RMCO-H against Defendants Dickey and Hilt, id. ¶¶ 261-71; (2) Count II: fraudulent concealment, asserted by Plaintiff RMCO against Defendants Dickey and Himes, id. ¶¶ 272-82; (3) Count III: constructive fraud, asserted by Plaintiff RMCO-H against Defendants Dickey and Hilt, id. ¶¶ 283-91; (4) Count IV: constructive fraud, asserted by Plaintiff RMCO against Defendants Dickey and Himes, id. ¶¶ 292-300; (5) Count V: civil conspiracy, asserted by both Plaintiffs against Defendants GT&T, Dickey, and Hilt and by Plaintiff RMCO only against Defendant Himes, id. ¶¶ 301-05; (6) Count VI: unjust enrichment, asserted by both Plaintiffs against Defendants GT&T, Dickey, and Hilt and by Plaintiff RMCO only against Defendant Himes, id. ¶¶ 306-09;[2] (7) Count VII: civil theft regarding Fort Laramie Crude Oil, asserted by Plaintiff RMCO against Defendants GT&T and Dickey, id. ¶¶ 310-13; (8) Count VIII: violation of Colo. Rev. Stat. § 18-17-104(3), asserted by Plaintiff RMCO against Defendants Dickey, Hilt, and Himes, id. ¶¶ 314-24; see Stipulation [#99] (stipulating to dismissal of Defendant GT&T from Count VIII); (9) violation of Colo. Rev. Stat. § 18-17-104(4), asserted by Plaintiff RMCO against Defendants Dickey, Hilt, and Himes, Am. Compl. [#47] ¶¶ 325-26; see Stipulation [#99] (stipulating to dismissal of Defendant GT&T from Count IX); and (10) Count X: violation of the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836 et seq., asserted by Plaintiff RMCO against Defendants GT&T, Dickey, and Himes, Am. Compl. [#47] ¶¶ 327-36. In the present Motions [#63, #65], Defendants contend that Plaintiffs' claims other than Count VII: civil theft and Count X: violation of the DTSA should be dismissed in whole or in part pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6).
Rule 12(b)(1) concerns whether the Court has jurisdiction to properly hear the case before it. Because “federal courts are courts of limited jurisdiction,” the Court must have a statutory basis to exercise its jurisdiction. Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002); see Fed.R.Civ.P. 12(b)(1). Statutes conferring subject-matter jurisdiction on federal courts are to be strictly construed. F & S Const. Co. v. Jensen, 337 F.2d 160, 161 (10th Cir. 1964). “The burden of establishing subject-matter jurisdiction is on the party asserting jurisdiction.” Id. (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)).
A motion to dismiss pursuant to Rule 12(b)(1) may take two forms: a facial attack or a factual attack. Holt v. United States, 46 F.3d 1000, 1002 (10th Cir. 1995). When reviewing a facial attack on a complaint, the Court accepts the allegations of the complaint as true. Id. By contrast, with a factual attack, the moving party challenges the facts upon which subject-matter jurisdiction depends. Id. at 1003. When reviewing a factual attack on a complaint, the Court “may not presume the truthfulness of the complaint's factual allegations.” Id. at 1003. The Court therefore must make its own findings of fact. Id. In order to make its findings regarding disputed jurisdictional facts, the Court “has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing.” Id. (citing Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990); Wheeler v. Hurdman, 825 F.2d 257, 259 n.5 (10th Cir. 1987)).
The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test “the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337 340 (10th Cir. 1994); Fed R. Civ. P. 12(b)(6) (). “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Sutton v. Utah State Sch. for the Deaf & Blind, 17 F.3d 1226, 1236 (10th Cir. 1999) (citation omitted). To withstand a motion to dismiss pursuant to Rule 12...
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