William v. AES Corp.

28 F.Supp.3d 553

Nyah Tchami WILLIAM, et al., Plaintiffs

v.The AES CORPORATION and AES Sonel, Defendants.

No. 1:14CV343 JCC/TRJ.

United States District Court, E.D. Virginia, Alexandria Division.

Signed June 26, 2014.

Emmanuel Nsahlai, Nsahlai Law Firm, Los Angeles, CA, John Andrew Baxter, I.S. Law Firm PLLC, Alexandria, VA, for Plaintiff.

Christopher T. Handman, Craig Alan Hoover, Mary Helen Wimberly, Barry J. Thompson, Michael M. Maddigan, Rachel Anne Patta, Hogan Lovells U.S. LLP, Los Angeles, CA, Jon Myer Talotta, Hogan Lovells U.S. LLP, McLean, VA, for Defendants.

MEMORANDUM OPINION

JAMES C. CACHERIS, District Judge.

At issue in this case is whether a parent corporation headquartered in Virginia and its Cameroonian subsidiary can be liable under the Alien Tort Statute and Virginia common law for injuries stemming from alleged power failures in Cameroon. Currently before the Court is Defendants AES Corporation (“AES”) and AES Sonel's (“Sonel”) (collectively “Defendants”) Motion to Dismiss Plaintiffs' Second Amended Complaint (“SAC”). For the following reasons, the Court will grant Defendants' Motion to Dismiss.

I. Background

This case arises out of power failures in Cameroon allegedly caused by a power company, Defendant Sonel. Plaintiffs, all citizens and residents of Cameroon, seek relief pursuant to the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350 and Virginia common law for injuries allegedly caused by these power failures.

A. Factual Background

AES is a Delaware corporation, headquartered in Arlington, Virginia. (SAC ¶ 2.) AES is a holding company which owns a portfolio of electricity generation and distribution businesses. AES owns 56% of Sonel, a subsidiary corporation located in Cameroon. The Cameroonian government owns the remaining 44% of Sonel, and Sonel is the sole distributor of electricity in Cameroon. (SAC ¶ 8.) AES recently sold its shares in Sonel to Actis Capital, LLP (“Actis”), a private equity firm headquartered in the United Kingdom. (SAC ¶ 6.) Plaintiffs have not filed any proof of service of process on Actis. Thus, the movants here are only AES and Sonel. (Def. Mem. at 3.)

According to the SAC, in 2001 AES entered into a contract with the government of Cameroon “for the privatization of electricity in Cameroon.” (SAC ¶ 26.) Plaintiffs allege that AES and the government of Cameroon “intended to benefit consumers of electrical power in Cameroon.” (SAC ¶ 26.) The contract allegedly provides for the provision, supply and distribution of electrical power in Cameroon. (SAC ¶ 26.) Plaintiffs do not have a copy of this alleged contract. Plaintiffs allege that Sonel, formerly a government owned corporation was privatized in 2001 and that “investment by AES corporation from USA was touted as the needed incentive to improve power generation.” (SAC ¶ 28.)

Plaintiffs allege that the electrical supply provided by Sonel is characterized by short circuits, voltage fluctuation and electrical supply failure. (SAC ¶ 2.) Plaintiffs allege that this substandard electrical supply has led to “death, misery, regular power outages, and substantial economic losses” between 2001 and the present. (SAC ¶ 2.) From August 2012 to March 2013, for example, Cameroon recorded 8,337 power cuts. (SAC ¶ 11.) When the electricity comes back on after an outage, high voltage on the line allegedly causes fires which have damaged homes and businesses. (SAC ¶¶ 11, 38–41.) Plaintiffs allege that these fires have resulted in the deaths of several children. (SAC ¶¶ 36–37.)

Plaintiffs further allege that Defendants do not timely provide consumers with their bills, (SAC ¶ 42), and that specific local industries, including fishermen, (SAC ¶ 44), merchants in electrical goods, (SAC ¶ 45), construction workers, (SAC ¶ 46), milk factories, (SAC ¶ 47), and food markets (SAC ¶ 48), have sustained economic losses because of electrical blackouts. (SAC ¶ 43.)

Plaintiffs aver that Sonel is “dependent on the AES Corporation for the management and all major activities necessary for the power generation, supply and regulation of the power supply in Cameroon.” (SAC ¶ 10.) Plaintiffs allege that Sonel “simply executes instructions and strategy emanating from AES” and that the “lack of capital investment in electrical grid or power infrastructure is reached in Arlington, VA.” (SAC ¶ 85.)

Plaintiffs bring suit under the ATS and Virginia law. Plaintiffs assert ten claims: (1) cruel, inhuman or degrading treatment actionable under the ATS; (2) breach of third-party contract; (3) wrongful death; (4) intentional infliction of emotional distress; (5) negligent infliction of emotional distress; (6) negligence/negligence per se; (7) civil conspiracy; (8) loss of consortium; (9) negligent misrepresentation; and (10) intentional misrepresentation. Plaintiffs seek compensatory and punitive damages, injunctive relief, specific performance of contract, and attorney's fees and costs. (SAC at 38–39.)

B. Procedural Background

On April 1, 2013, Plaintiffs filed their original complaint in the Central District of California. [Dkt. 1.] On October 15, 2013, Judge Gutierrez granted Plaintiffs' Motion for Leave to File First Amended Complaint (“FAC”). [Dkt. 20.] On November 14, 2013, AES moved to dismiss the FAC for lack of personal jurisdiction under Rule 12(b)(2). [Dkt. 29.] On February 6, 2014, Judge Gutierrez granted AES's motion to dismiss Plaintiffs' FAC with leave to amend. [Dkt. 38.].

On March 10, 2014, Plaintiffs filed their Second Amended Complaint, [Dkt. 40], and Motion to Transfer Venue, pursuant to 28 U.S.C. § 1404(a) to the Eastern District of Virginia, [Dkt. 39]. On March 31, 2014, Judge Gutierrez granted Plaintiffs' Motion to Transfer Venue. [Dkt. 52.].

On April 21, 2014, Defendants AES and Sonel filed their Second Motion to Dismiss for Failure to State a Claim (“Motion”). [Dkt. 56.] On May 12, 2014, Plaintiffs filed their opposition. [Dkt. 64.] In their opposition brief, Plaintiffs did not address counts 5 (negligent infliction of emotional distress), 7 (civil conspiracy), 8 (loss of consortium), 9 (negligent misrepresentation), or 10 (intentional misrepresentation). By failing to address these counts in their opposition, Plaintiffs have effectively abandoned these claims. Nevertheless, the Court will briefly address the insufficiencies of these counts. See Freight Drivers & Helpers Local Union No. 557 Pension Fund ex rel. Joint Bd. of Trustees v. Penske Logistics LLC, No. CIV.A. ELH–12–2376, 2014 WL 547043, at *8 (D.Md. Feb. 7, 2014) ; Burns & Russell Co. of Baltimore v. Oldcastle, Inc., 166 F.Supp.2d 432, 440 (D.Md.2001) (“Plaintiffs appear to concede this point, as they have failed to respond to this argument”). Defendants filed their reply on May 19, 2014. [Dkt. 68.].

Defendants' Motion is now before the Court.

II. Standard of Review

A. 12(b)(2)

Federal Rule of Civil Procedure 12(b)(2) permits dismissal of an action when the Court lacks personal jurisdiction over the parties. The plaintiff bears the burden of demonstrating personal jurisdiction by a preponderance of the evidence once its existence is questioned by the defendant. Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.1989). When a district court decides a pretrial personal jurisdiction dismissal motion without an evidentiary hearing, however, the plaintiff need prove only a prima facie case of personal jurisdiction. Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir.1993) ; Combs, 886 F.2d at 676. In deciding whether the plaintiff has proved a prima facie case, the district court must draw all reasonable inferences arising from the proof, and resolve all factual disputes, in the plaintiff's favor. Combs, 886 F.2d at 676 ; Wolf v. Richmond Cnty. Hosp. Auth., 745 F.2d 904, 908 (4th Cir.1984), cert. denied, 474 U.S. 826, 106 S.Ct. 83, 88 L.Ed.2d 68 (1985).

B. 12(b)(6) and Rule 9(b)

Rule 12(b)(6) allows a court to dismiss those allegations which fail “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A 12(b)(6) motion tests the legal sufficiency of the complaint. Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir.2008). A court reviewing a complaint on a 12(b)(6) motion must accept well-pleaded allegations as true and must construe factual allegations in favor of the plaintiff. See Randall v. United States, 30 F.3d 518, 522 (4th Cir.1994).

A court must also be mindful of the liberal pleading standards under Rule 8, which require only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8. While Rule 8 does not require “detailed factual allegations,” a plaintiff must still provide “more than labels and conclusions” because “a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation omitted).

To survive a 12(b)(6) motion, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice” to meet this standard, id., and a plaintiff's “[f]actual allegations must be enough to raise a right to relief above the speculative level....” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Moreover, a court “is not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

Rule 9(b) imposes a heightened pleading standard for fraud claims. “In alleging fraud [ ], a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other...