Cxa La Paloma, LLC v. Mojave Pipeline Co.
16-15814
| 9th Cir. | Jan 8, 2018Background
- La Paloma, an owner/operator, sued Mojave Pipeline Co., El Paso Natural Gas Co., and Kern River Gas Transmission Co. (Defendants) after gas delivery disputes tied to contracts EDF Trading North America (EDF) entered with Defendants.
- La Paloma contracted with EDF for gas purchases; EDF executed the subject transportation/sales agreements with Defendants governed by Colorado or Utah law and by Defendants’ FERC tariffs.
- La Paloma alleged EDF acted as its agent and that La Paloma was an intended third-party beneficiary of EDF’s contracts with Defendants, and asserted negligence claims against Defendants for gas quality/pressure issues.
- The district court dismissed La Paloma’s complaint under Rule 12(b)(6); La Paloma appealed.
- The Ninth Circuit affirmed, addressing (1) whether EDF was La Paloma’s agent, (2) whether La Paloma was a third-party beneficiary of EDF’s contracts with Defendants, and (3) whether La Paloma’s negligence claims were barred by filed FERC tariffs (filed-rate doctrine).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Agency: Was EDF La Paloma’s agent when contracting with Defendants? | EDF acted on La Paloma’s behalf to procure transport/sales, so agency exists. | Contracts between La Paloma and EDF disclaim agency; La Paloma did not control EDF. | No agency: contract disclaimers and lack of control preclude agency. |
| Third‑party beneficiary: Can La Paloma enforce EDF’s contracts with Defendants? | La Paloma was a known recipient of shipments and thus intended beneficiary. | Contracts permit EDF to ship to multiple parties; La Paloma is at best incidental. | No beneficiary status: multiple potential recipients and contract terms show no intent to benefit La Paloma. |
| Negligence / Filed‑rate doctrine: Are La Paloma’s tort claims barred? | Defendants’ conduct caused harm; tariffs don’t eliminate common‑law claims. | FERC tariffs disclaim post‑delivery obligations; filed‑rate doctrine bars inconsistent state/common‑law claims. | Barred: tariffs disclaim obligations after delivery, so filed‑rate doctrine precludes La Paloma’s negligence claims. |
| Procedural: Was Rule 12(b)(6) dismissal appropriate? | Complaint stated plausible claims. | Complaint failed to plead agency or beneficiary status and violated filed‑rate doctrine. | Affirmed dismissal for failure to state claim given legal deficiencies. |
Key Cases Cited
- EBC I, Inc. v. Goldman, Sachs & Co., 832 N.E.2d 26 (N.Y. 2009) (party agreements control existence of agency under New York law)
- In re Parmalat Sec. Litig., 375 F. Supp. 2d 278 (S.D.N.Y. 2005) (lack of control undermines agency allegations)
- Orlando Millenia, LC v. United Title Servs. of Utah, Inc., 355 P.3d 965 (Utah 2015) (third‑party enforcement requires intended beneficiary)
- Parrish Chiropractic Ctrs. P.C. v. Progressive Cas. Ins. Co., 874 P.2d 1049 (Colo. 1994) (intent to benefit must be apparent for third‑party beneficiary status)
- Quigley v. Jobe, 851 P.2d 236 (Colo. App. 1993) (intent to benefit analyzed from contract and circumstances)
- American Towers Owners Ass’n, Inc. v. CCI Mech., Inc., 930 P.2d 1182 (Utah 1996) (examining written contract to determine beneficiary status)
- SME Indus., Inc. v. Thompson, Ventulett, Stainback and Assocs., Inc., 28 P.3d 669 (Utah 2001) (multiple potential beneficiaries defeat intended‑beneficiary status)
- California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831 (9th Cir. 2004) (filed‑rate doctrine bars state or common‑law claims that conflict with filed tariffs)
- Brown v. MCI WorldCom Network Servs., Inc., 277 F.3d 1166 (9th Cir. 2002) (application of filed‑rate doctrine to preempt inconsistent claims)