Pacific Boring, Incorporated v. Staheli Trenchless Consultants, Inc. et al, No. 2:2014cv00187 - Document 21 (W.D. Wash. 2014)
Court Description: ORDER granting dfts' 11 Motion to Dismiss for Failure to State a Claim by Judge Ricardo S Martinez.(RS)
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Pacific Boring, Incorporated v. Staheli Trenchless Consultants, Inc. et al Doc. 21 1 2 3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 6 7 8 9 PACIFIC BORING, INC., a California corporation, 10 11 Plaintiff, v. 12 13 14 STAHELI TRENCHLESS CONSULTANTS, INC., a Washington corporation, and KIMBERLIE STAHELI LOUCH, P.E., Ph.D., individually, 15 Defendants. ) ) CASE NO. C14-0187 RSM ) ) ) ORDER GRANTING DEFENDANTS’ ) MOTION TO DISMISS ) ) ) ) ) ) ) 16 I. 17 INTRODUCTION 18 This matter comes before the Court on Defendants’ Motion to Dismiss under Federal 19 Rules of Civil Procedure 12(b)(1) and 12(b)(6). Dkt. #11. Defendants argue that two of 20 Plaintiff’s claims – Plaintiff’s Third Claim for Relief Against Defendant Staheli Trenchless 21 22 Consultants, Inc. (“STC”), and Plaintiff’s Cause of Action for Declaratory Relief against both 23 STC and Dr. Kimberlie Staheli – should be dismissed because this Court lacks subject matter 24 jurisdiction over those claims, and because Plaintiff fails to allege facts sufficient to support the 25 causes of action in any event. Id. Plaintiff responds that this Court has jurisdiction over the 26 claims and that it has pled sufficient facts to meet the appropriate notice pleading standard. 27 28 ORDER PAGE - 1 Dockets.Justia.com 1 2 Dkt. #12. For the reasons set forth below, the Court disagrees with Plaintiff and GRANTS Defendants’ motion to dismiss. 3 4 II. BACKGROUND Defendant Kimberlie Staheli is a licensed engineer operating her own consulting 5 business. Dkt. #1 at ¶ 5. She co-authored a professional paper in 2009 about the legal impact 6 7 of geotechnical baseline reports in subsurface excavation contracts which also contain 8 Differing Site Condition clauses. 9 mechanisms for allocation of risk in situations where truly unanticipated conditions may be 10 Dkt. #1, Ex. D. Specifically, the paper addresses the encountered in a project which affects the cost of completion of the project. Id. The other co- 11 author of the paper is an attorney from the Seattle law firm Davis Wright Tremaine, LLP, who 12 13 is not a party to this suit. Id. 14 According to Plaintiff, on or about April 19, 2010, Defendants contracted with the 15 Northshore Utility District to provide engineering services related to the installation of a sewer 16 bypass line at the O.O. Denny Park in Kirkland, WA. Dkt. #1 at ¶ 30 and Ex. A. The park 17 18 contained wetlands, which affected the types of technologies that could be utilized for 19 excavation. Within the scope of her consulting services, Dr. Staheli allegedly reviewed and 20 edited a geotechnical engineering services report by GeoEngineers, the geotechnical engineer 21 for the sewer bypass project. Id. at ¶ 40. Dr. Staheli later contracted with Gray & Osborne, 22 Inc., the design engineer on the project, to consult about auger bore specifications. Id. at ¶ 59. 23 24 In July 2011, Plaintiff (a trenchless construction firm) submitted a bid as a 25 subcontractor for the project. Id. at ¶ 71. Plaintiff alleges that it had been solicited by 26 Defendants to submit the bid. Id. at ¶ ¶ 68-71. Plaintiff further alleges that, in soliciting 27 Plaintiff, Defendants “seriously misrepresented” the conditions of the project and the suitability 28 ORDER PAGE - 2 1 of Plaintiff’s technologies. Plaintiff also alleges that Defendants “manipulated” the 2 aforementioned geotechnical reports to “shed liability” for unanticipated conditions. Dkt. #12 3 at 6-7. Plaintiff asserts that after successfully starting the project, it encountered unanticipated, 4 wet flowing ground (a condition it alleges was known by Defendants, but hidden from 5 Plaintiff), causing a sinkhole, prohibiting forward progress, and giving rise to a claim for 6 7 differing site conditions. Dkt. #1 at ¶ ¶ 83-91. Ultimately, Plaintiff completed the project, but 8 with additional time and expense. Plaintiff then brought suit against Defendants to recover 9 damages it alleges arose from Defendants’ negligence and misrepresentations. 10 III. DISCUSSION 11 A. Standards of Review 12 13 1. Motions Under 12(b)(1) 14 Federal courts are courts of limited jurisdiction. Gunn v. Minton, __ U.S. __, 133 S. Ct. 15 1059, 1064 (2013) (citation omitted). As such, this Court is to presume “that a cause lies 16 outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party 17 18 asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S. 19 Ct. 1673 (1994) (citations omitted); see also Robinson v. United States, 586 F.3d 683, 685 (9th 20 Cir. 2009); Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). A Rule 21 12(b)(1) motion to dismiss for lack of subject matter jurisdiction may be either “facial” or 22 “factual.” See Safe Air for Everyone, 373 F.3d at 1039. A facial attack on subject matter 23 24 jurisdiction is based on the assertion that the allegations contained in the complaint are 25 insufficient to invoke federal jurisdiction. Id. “A jurisdictional challenge is factual where ‘the 26 challenger disputes the truth of the allegations that, by themselves, would otherwise invoke 27 federal jurisdiction.’” Pride v. Correa, 719 F.3d 1130, 1133 n.6 (9th Cir. 2013) (quoting Safe 28 ORDER PAGE - 3 1 2 3 4 Air for Everyone, 373 F.3d at 1039)). Here, Defendants raise facial challenges to certain of Plaintiff’s claims. 2. Motions Under 12(b)(6) On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 5 12(b)(6), all allegations of material fact must be accepted as true and construed in the light 6 7 most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 8 (9th Cir. 1996). However, the court is not required to accept as true a “legal conclusion 9 couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. 10 Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Complaint “must contain sufficient factual 11 matter, accepted as true, to state a claim to relief that is plausible on its face.” Id. at 678. This 12 13 requirement is met when the plaintiff “pleads factual content that allows the court to draw the 14 reasonable inference that the defendant is liable for the misconduct alleged.” Id. Absent facial 15 plausibility, Plaintiffs’ claims must be dismissed. Twombly, 550 U.S. at 570. 16 B. Plaintiff’s Complaint 17 18 1. Plaintiff’s Claim for Declaratory Relief 19 In its Complaint, Plaintiff alleges a claim for declaratory relief, brought under 20 Washington’s Uniform Declaratory Judgment Act (“UDJA”), RCW 7.24, et seq. Dkt. #1 at ¶ ¶ 21 127-128. Specifically, Plaintiff asks this Court to declare that STC and Dr. Staheli are in 22 violation of several provisions of: 1) WAC 196-27A-020, which creates canons for the 23 24 professional conduct and practice of licensed professional engineers in Washington; 2) RCW 25 18.235, which concerns licensing and conduct requirements for such engineers; and 3) RCW 26 18.43.05 and 18.43.105, which impose disciplinary procedures for licensed professionals. Id. 27 Defendants argue that this Court lacks jurisdiction over the claim because Washington State 28 ORDER PAGE - 4 1 has assigned enforcement of these statutes and municipal codes to the Board of Registration for 2 Professional Engineers and Land Surveyors (“Board”). 3 18.43.110). Plaintiff opposes the motion, asserting that it is neither asking for discipline nor 4 Dkt. #11 at 5-8 (citing RCW sanctions, which are within the exclusive purview of the Board, but rather is asking for the 5 Court to determine whether Defendants violated the provisions of the statutes and codes cited 6 7 which is within the jurisdiction of this Court. Dkt. #12 at 6-14. 8 The Court agrees with Defendants that it lacks jurisdiction over the declaratory relief 9 claim. The Court can find no basis in any statute, regulation or case that allows it to issue the 10 relief sought by Plaintiff. While Plaintiff points to several cases it believes demonstrates 11 jurisdiction in this Court, those cases are easily distinguishable from the instant matter. For 12 13 example, Plaintiff relies on an unpublished state Court of Appeals decision for the assertion 14 that courts have made determinations about the applicability of the statutes at issue. See 15 Madera West Condominium Association v. Marx/Okubo, 2013 Wash. App. LEXIS 1544 (Div. I 16 July 1, 2013). However, in Madera West, the court examined the statutes in question only to 17 18 determine whether there had been established a statutory duty which was then breached, and 19 ultimately whether a negligence claim had been established. The court did not review the 20 statutes in the context of a request for declaratory relief. See Madera West, 2013 Wash. App. 21 LEXIS 1544 at *14-18. Likewise, Burg v. Shannon & Wilson, 110 Wn. App. 798, 43 P.3d 526 22 (Div. I 2002), does not hold to the contrary. Again, in that case, the court engaged in an 23 24 25 analysis of the statutes in question only to determine whether a legal duty was owed as part of its analysis of a negligence claim.1 Burg, 110 Wn. App. at 803-808. 26 1 27 28 Further, this Court is not persuaded by Plaintiff’s reliance on Jackowski v. Borchelt, 278 Wn.2d 720, 278 P.3d 1100 (2012). That case interpreted Washington’s statute governing the professional conduct of real estate agents, also in the context of a negligence claim, which, unlike the instant case, contains express duties for such agents. ORDER PAGE - 5 In addition, the Court finds no statutory authority for jurisdiction. Plaintiff points to 1 2 RCW 18.43.120, which provides that all officers of the state or any political subdivision thereof 3 shall enforce the provisions of the statute. Dkt. # 12 at 12-13. However, that provision pertains 4 to criminal enforcement of the statute against engineers who fail to register. See RCW 5 18.43.120 (“Any person who shall practice . . . engineering . . . in this state without being 6 7 8 registered in accordance with the provisions of this chapter . . . shall be guilty of a gross misdemeanor.”). For all of these reasons, this claim is dismissed. 9 2. Washington’s Consumer Protection Act 10 Plaintiff’s Third Cause of Action against STC only alleges violations of Washington’s 11 Consumer Protection Act (“CPA”). Dkt. #1 at ¶ ¶ 107-111. This Cause of Action is based on 12 13 allegations that STC engaged in unfair competition by manipulating contract documents to 14 withhold information from bidders and by supplying false information to Plaintiff which was 15 material to Plaintiff’s bid, which ultimately resulted in damages to Plaintiff. Id. To prevail in a 16 private CPA claim, a plaintiff must prove: “(1) unfair or deceptive act or practice; (2) occurring 17 18 in trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or her business or 19 property; [and] (5) causation.” Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 20 105 Wn.2d 778, 780, 719 P.2d 531 (1986); see RCW 19.86.020 and .090. In this case, 21 Defendants argue that Plaintiff’s claim must be dismissed because it fails to allege sufficient 22 facts demonstrating that the acts complained of occurred in trade or commerce. Specifically, 23 24 Defendants argue that the claim is rooted in Defendants’ alleged violations of its professional 25 duties, and Washington law precludes CPA claims based on such professional practices unless 26 the issues are related to the “entrepreneurial” aspects of the professional’s practice. Dkt. #11 at 27 8-10. 28 ORDER PAGE - 6 1 Plaintiff provides very little argument in response. Indeed, Plaintiff appears to agree 2 that it must allege sufficient facts to demonstrate that the claim involves the entrepreneurial 3 aspects of the practice or entrepreneurial motives. See Dkt. #12 at 19-20. Plaintiff then states 4 that examples include “marketing activities.” Dkt. #12 at 20. Plaintiff then asserts that 5 Defendants’ publication, “The Legal Impact of Geotechnical Baseline Reports,” Dkt. #1, Ex. D, 6 7 evidences their efforts to create or manipulate geotechnical baselines to avoid application of 8 longstanding case law pertaining to differing site condition claims made by contractors. Dkt. 9 #12 at 20. 10 Significantly, the CPA Cause of Action against STC makes no mention of the publication as a basis for the claim, or how the article (which of course was not authored by the 11 company) was related to the sewer bypass project or any alleged damages. Accordingly, the 12 13 Court finds that Plaintiff has failed to allege a plausible CPA claim against STC and the claim 14 must be dismissed. 15 C. Leave to Amend 16 Ordinarily, leave to amend a complaint should be freely given following an order of 17 18 dismissal, “unless it is absolutely clear that the deficiencies of the complaint could not be cured 19 by amendment.” Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987); see also DeSoto v. 20 Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (“A district court does not err in 21 denying leave to amend where the amendment would be futile.” (citing Reddy v. Litton Indus., 22 Inc., 912 F.2d 291, 296 (9th Cir. 1990)). Here, the Court concludes that granting leave to 23 24 amend would be futile. The Court can conceive of no possible cure for the deficiencies in 25 Plaintiff’s two causes of action discussed above, particularly given the invalidity of Plaintiffs’ 26 primary legal arguments as discussed above. 27 28 ORDER PAGE - 7 IV. 1 CONCLUSION 2 Having reviewed the relevant pleadings, the declarations and exhibits attached thereto, 3 and the remainder of the record, the Court hereby finds and ORDERS that Defendants’ Motion 4 to Dismiss (Dkt. #11) is GRANTED. Plaintiff’s Cause of Action against STC and Dr. Staheli 5 for declaratory relief is DISMISSED for lack of subject matter jurisdiction. Plaintiff’s Third 6 7 Claim for Relief against STC is also DISMISSED for Plaintiff’s failure to state a cause of 8 action upon which relief may be granted, as discussed above. The case will proceed without 9 those two causes of action. 10 11 DATED this 21st day of November 2014. 12 A 13 14 RICARDO S. MARTINEZ UNITED STATES DISTRICT JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER PAGE - 8
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