Steele v. Viscofan USA, Inc. (LEAD), 2:17-cv-00349

Plaintiff Kawayne Steele, a Viscofan USA, Inc. machine operator, suffered a serious left-arm injury on March 23, 2016 while feeding casing into a shirring machine at Viscofan’s Montgomery facility.
Steele sued multiple entities (including foreign parent Viscofan, SA) in state court asserting AEMLD (products liability), negligence, and wantonness claims based on alleged design/modification defects, lack of guards, and inadequate warnings.
The state court severed the workers’ compensation claims from the tort claims; the tort action was removed to federal court on diversity grounds. Viscofan USA, Inc. was later dismissed with prejudice under Alabama workers’ compensation exclusivity and settled with Steele.
Viscofan, SA moved to dismiss, arguing the prior settlement/release between Steele and Viscofan USA, Inc. released Viscofan, SA as the parent company and thus bars Steele’s tort claims against it.
Steele responded that the settlement only released workers’ compensation claims and did not release the separate tort claims; he contended his federal complaint states viable claims against Viscofan, SA.
The Magistrate Judge recommended denial of the motion to dismiss: (1) Viscofan, SA’s reliance on the release raised matters outside the complaint and asserted an affirmative defense inappropriate on a Rule 12(b)(6) motion; and (2) conversion to summary judgment was premature given factual issues about the prior litigation, settlement context, and release language.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Steele’s complaint against Viscofan, SA should be dismissed based on the prior settlement/release with Viscofan USA, Inc.	Steele argues the state-court settlement only released workers’ compensation claims, not the separate tort claims against Viscofan, SA.	Viscofan, SA contends the settlement between Steele and its wholly owned subsidiary effectively released Viscofan, SA as the parent and bars the tort suit.	Denied — release is an affirmative defense relying on materials outside the complaint; not appropriate for dismissal under Rule 12(b)(6).
Whether the court should treat the motion as one for summary judgment and decide release issues now	Steele opposes premature resolution and requests full discovery/notice if court converts the motion.	Viscofan, SA invited conversion to summary judgment based on the settlement document.	Denied/declined — conversion would be premature given prior litigation history, settlement context, and factual disputes; if converted, parties must receive proper Rule 56 notice and opportunity to respond.

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must plead facts showing plausible entitlement to relief)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (labels/conclusions insufficient; factual plausibility required)
Hill v. White, 321 F.3d 1334 (11th Cir. 2003) (on Rule 12(b)(6) standard—accept allegations as true and construe in plaintiff’s favor)
United States v. Raddatz, 447 U.S. 667 (1980) (standards for magistrate judge recommendations to district court)
Jeffrey S. v. State Bd. of Educ., 896 F.2d 507 (11th Cir. 1990) (procedures for magistrate judge reports and recommendations)