Voodoo Leatherworks LLC v. Waste Connections U.S., Inc.

• Decision Date: 01 August 2022
• Docket Number: Civil Action 1:21-cv-02005-RMR-MDB
• Parties: VOODOO LEATHERWORKS LLC, Plaintiff, v. WASTE CONNECTIONS US, INC. and WASTE CONNECTIONS OF COLORADO, INC., Defendants.
• Court: U.S. District Court — District of Colorado

VOODOO LEATHERWORKS LLC, Plaintiff, v. WASTE CONNECTIONS US, INC. and WASTE CONNECTIONS OF COLORADO, INC., Defendants.

Civil Action No. 1:21-cv-02005-RMR-MDB

United States District Court, D. Colorado

August 1, 2022

ORDER

REGINA M. RODRIGUEZ, United States District Judge

Pending before the Court are the Motion to Dismiss for Lack of Standing and to Strike Class Action Allegations, ECF No. 37 and the Motion for Summary Judgment, ECF No. 38, filed by Defendants Waste Connections US, Inc. and Waste Connections of Colorado, Inc. For the reasons stated below, the Court DENIES IN PART the Motion to Dismiss, ECF No. 37, and GRANTS the Motion for Summary Judgment, ECF No. 38.

I. BACKGROUND

This putative class action concerns the form contracts for the waste collection and disposal services of Defendants Waste Connection of Colorado, Inc. and Waste Connections US Inc.^[1] A contract signed by an individual named Paul Ulmer-who named Plaintiff Voodoo Leatherworks, LLC (“Voodoo”) contends is its sole owner and registered agent, ECF No. 47 at 2-is the basis for Plaintiff's claims here. On March 14, 2013, Mr. Ulmer signed the contract for Defendant Waste Connection of Colorado, Inc. to provide waste collection and disposal services at an address in Colorado Springs, Colorado. ECF No. 37-1 at 1; ECF No. 38-1 at 1. The contract provides a certain “service total” but also provides that the rate charged for waste collection and disposal services “shall be increased from time to time to adjust for increases in the Consumer Price Index” (“CPI”), among other adjustments. See ECF No. 37-1 at 1-2; ECF No. 38-1 at 1-2.

On July 23, 2021, Plaintiff filed its Class Action Complaint, ECF No. 1, alleging that “in violation of this contractual mandate, Waste Connections has repeatedly overcharged customers through automated rate increases that far out-strip any increases in CPI.” ECF No. 1 ¶ 1. Plaintiff alleges that Defendants thereby “engaged in a widespread and systematic practice of unlawfully overcharging its customers by imposing unlawful and excessive rate increases in violation of the uniform contract at issue.” Id. Plaintiff brings claims against Defendants for breach of contract, breach of the duty of good faith and fair dealing, and unjust enrichment, on behalf of itself and a proposed class. See id. ¶¶ 28, 39-53.

On November 23, 2021, Defendants filed their Motion to Dismiss and Motion for Summary Judgment, arguing that (1) Plaintiff is not a party to any contract with Defendants and therefore is not “the real party in interest” under Federal Rule of Civil Procedure 17(a)(1) and lacks standing to bring this breach of contract action, ECF No. 37 at 1, 8-10; (2) the Court should strike Plaintiff's class action allegations because Plaintiff fails to allege a viable proposed class, id. at 1, 10-15; and (3) Defendants are entitled to summary judgment because the claims are barred by the statute of limitations, ECF No. 38 at 1-8. Defendants' motions are ripe for review.

The Court first addresses Defendants' arguments in their Motion to Dismiss that Plaintiff lacks Article III or prudential standing because Plaintiff is not the proper party. See, e.g., Citizens Concerned for Separation of Church & State v. City & Cnty. of Denver, 628 F.2d 1289, 1301 (10th Cir. 1980) (“A federal court must in every case, and at every stage of the proceeding, satisfy itself as to its own jurisdiction, and the court is not bound by the acts or pleadings of the parties.”). Ultimately, for the reasons set forth below, the Court does not find that Defendants' arguments raise standing or jurisdictional issues on real-party-in-interest grounds and does not find that dismissal on such grounds is proper at this stage. However, the Court does find that Plaintiff's claims were filed outside of the applicable statute of limitations and that Defendants' Motion for Summary Judgment should be granted. Therefore, the Court need not reach any of Defendants' additional arguments in their Motion to Dismiss regarding the viability of the alleged proposed class.

II. SUBJECT MATTER JURISDICTION

The claims in this case are state law claims for breach of contract, breach of the duty of good faith and fair dealing, and unjust enrichment. Therefore, the Court's jurisdiction arises under diversity jurisdiction, pursuant to 28 U.S.C. § 1332(d), because, first, Plaintiff is “a citizen of a State different from any defendant.” See 28 U.S.C. § 1332(d)(2)(A). The allegations in the Complaint suggest that Plaintiff is a citizen of Colorado, while Defendants are citizens of Delaware and Texas. ECF No. 1 ¶ 5. Second, Plaintiff alleges that the amount in controversy exceeds $5,000,000. See id.; 28 U.S.C. § 1332(d)(2). Finally, Plaintiff alleges that the proposed class consists of more than 100 members because “Waste Connections has more than one million customers, thousands of which, upon information and belief, entered into the form contract at issue and were subject to the price increase practices at issue.” ECF No. 1 ¶ 5; cf. 28 U.S.C. § 1332(d)(5)(B). Therefore, the Court may exercise diversity jurisdiction over this putative class action.

III. MOTION TO DISMISS

Defendants argue in their Motion to Dismiss that Plaintiff is not a party to a contract with the Defendants, and therefore, Plaintiff lacks standing and the Court does not have jurisdiction over this case under Article III of the Constitution. ECF No. 37 at 1,8-10; see, e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (“Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.”). According to Defendants, Mr. Ulmer is the only signatory to the contract at issue, and Voodoo is not identified anywhere on the contract. See ECF No. 37 at 1, 8-9. However, “whether Plaintiff is a real party in interest does not raise justiciability concerns.” EEOC v. Outback Steak House, No. 06-cv-01935-EWN-BNB, 2007 WL 2947326, at *4 (D. Colo. Aug. 27, 2007) (Nottingham, C.J.) (citing Federal Deposit Ins. Corp. v. Bachman, 894 F.2d 1233, 1236 (10th Cir. 1990)). “Even if standing jurisprudence is helpful by analogy in resolving real-party-in-interest issues, this does not convert real party in interest into a nonwaivable issue of subject matter jurisdiction.” Bachman, 894 F.2d at 1236. Therefore, the Court does not have “an independent duty to satisfy [it]sel[f], as a jurisdictional matter,” that Plaintiff was a party to a contract with Defendants. See MTGLQ Investors, LP v. Wellington, 856 Fed.Appx. 146, 156 (10th Cir. 2021).

Plaintiff points out that Rule 17 of the Federal Rules of Civil Procedure “essentially codifie[s]” the “general prohibition on a litigant's raising another person's legal rights” under the prudential standing doctrine. See Boscoe Chung v. Lamb, No. 14-cv-03244-WYD-KLM, 2018 WL 6429922, at *4 (D. Colo. Nov. 14, 2018) (Daniel, J.), cited in ECF No. 47 at 5. However, even if the Court were to find that Plaintiff was not a party to a contract with Defendants and therefore lacked prudential standing to bring the breach of contract claim and the breach of implied duty of good faith claim (which also requires the existence of a contract, see, e.g., Kirkland v. Robert W. Baird & Co., Inc., No. 18-cv-02724, 2020 WL 1452165, at *8 (D. Colo. Mar. 25, 2020) (Krieger, J.) (applying Colorado law)), Defendants would still not have established that Plaintiff lacked standing-under Article III or the prudential standing doctrine-to bring the unjust enrichment claim. As Defendants themselves note, unjust enrichment is a claim that may only be brought in the absence of a contract, ECF No. 49 at 4 (citing United Water & Sanitation Dist. v. GeoCon, Inc., 488 F.Supp.3d 1052, 1058 (D. Colo. 2020)), and Defendants have vigorously argued that there is no contract between Plaintiff and Defendants. See ECF No. 37 at 810; ECF No. 49 at 1-4. Given that Defendants' standing arguments are premised on their position that Plaintiff is not a party to a contract with Defendants, they have failed to argue that Plaintiff lacks standing to bring the unjust enrichment claim.

Moreover, as Plaintiff points out, see ECF No. 47 at 5, even assuming (without deciding) that Plaintiff is not a real party in interest, the Court “may not dismiss an action for failure to prosecute in the name of the real party in interest until, after an objection, a reasonable time has been allowed for the real party in interest to ratify, join, or be substituted into the action.” Fed.R.Civ.P. 17(a)(3). Therefore, even if the Court were to find that Plaintiff is not the real party in interest, the Court would deny Defendants' motion to dismiss on this ground and allow time for the real party in interest to join the action by, for example, allowing amendment to the Complaint. See, e.g., Fairfield Dev., Inc. v. J.D.I. Contractor & Supply, Inc., 782 F.Supp.2d 1205, 1207 n.1, 1208 (D. Colo. 2011) (Ebel, J.). However, the Court need not reach this determination and need not grant leave to amend the Complaint because amendment would be futile, given that, for the reasons discussed below, the Complaint was filed outside of the applicable statute of limitations. For that reason, the claims are time-barred, and this case must be dismissed with prejudice. For the same reason, the Court need not reach the issues Defendants raise regarding the viability of the proposed class. See ECF No. 37 at 10-15; ECF No. 49 at 4-9. Therefore, the Court DENIES IN PART Defendants' Motion to Dismiss, ECF No. 37, regarding Defendants' jurisdictional arguments and finds that it need not address the remaining contentions in that motion.

IV. MOTION FOR SUMMARY JUDGMENT

A. Legal Standard

The Court “shall grant summary judgment...