SINCLAIR WYOMING REFINING COMPANY, a Wyoming corporation v. A & B BUILDERS, LTD., a Texas limited partnership; MATRIX ENGINEERING, LTD., a Texas limited partnership; HOWE-BAKER ENGINEERS, LTD., a Texas limited partnership
No. 19-8042
SINCLAIR WYOMING REFINING COMPANY, a Wyoming corporation v. APPLIED CONTROL EQUIPMENT, LLC, a dissolved Colorado limited liability company, n/k/a Applied Control Equipment, LLLP, a Colorado limited liability partnership; INSTRUMENT & VALVE SERVICES COMPANY, a Delaware company; FISHER SERVICE CO., d/b/a Fisher Controls International, Inc., a Delaware corporation, n/k/a Fisher Controls International, LLC, a Delaware limited liability company; EMERSON PROCESS MANAGEMENT LLLP, a Delaware limited liability partnership
No. 19-8053
United States Court of Appeals for the Tenth Circuit
February 22, 2021
MATHESON, Circuit Judge.
PUBLISH
Plaintiff - Appellant,
v.
A & B BUILDERS, LTD., a Texas limited partnership; MATRIX ENGINEERING, LTD., a Texas limited partnership; HOWE-BAKER ENGINEERS, LTD., a Texas limited partnership,
Defendants - Appellees,
SINCLAIR WYOMING REFINING COMPANY, a Wyoming corporation,
Plaintiff - Appellant,
v.
APPLIED CONTROL EQUIPMENT, LLC, a dissolved Colorado limited liability company, n/k/a Applied Control Equipment, LLLP, a Colorado limited liability partnership; INSTRUMENT & VALVE SERVICES COMPANY, a Delaware company; FISHER SERVICE CO., d/b/a Fisher Controls International, Inc., a Delaware corporation, n/k/a Fisher Controls International, LLC, a Delaware limited liability company; EMERSON PROCESS MANAGEMENT LLLP, a Delaware limited liability partnership,
and
A & B BUILDERS, LTD., a Texas limited partnership; MATRIX ENGINEERING, LTD., a Texas limited partnership; HOWE-BAKER ENGINEERS, LTD., a Texas limited partnership,
Defendants.
Appeal from the United States District Court for the District of Wyoming
(D.C. No. 2:15-CV-00091-ABJ)
Brad W. Breslau, Cozen O’Connor, Denver, Colorado, (Richard R. Rardin, Susan J. Lloyd, Cozen O’Connor, Denver, Colorado; Thomas M. Regan, Cozen O’Connor, San Diego, California; Kevin P. Caraher, Cozen O’Connor, Chicago, Illinois; Geoffrey D. Farnham, Deneberg Tuffley, Southfield, Michigan, with him on the briefs) for Plaintiff – Appellant.
Nicholas A. Merrell, (Bennett J. Lee, Varela, Lee, Metz & Guarino, LLP, San Francisco, California, with him on the brief); Randy L. Sego, (J. Scott Lasater and April D. Moore, Lasater & Martin, P.C. Highlands Ranch, Colorado with him on the brief); Patrick D. McVey, Fox Rothschild LLP, Seattle, Washington, (James F. Bennett, Dowd Bennett LLP, St. Louis, Missouri; Paul J. Hickey, Hickey & Evans, LLP, Cheyenne, Wyoming with him on the brief) for Defendants – Appellees.
Before MATHESON, SEYMOUR, and KELLY, Circuit Judges.
MATHESON, Circuit Judge.
I. Background................................................................................................................... 2
A. Appellees.............................................................................................................2
1. CB&I Defendants................................................................................................2
2. ACE.....................................................................................................................3
3. IVS Defendants...................................................................................................3
B. Factual Background ............................................................................................3
1. The Unit’s Origins..............................................................................................3
2. Process Design by Fluor Corporation.................................................................4
3. EPC Contract ......................................................................................................4
4. ACE Contract......................................................................................................5
a. Solicitation of the ACE Contract.....................................................................5
b. Valve inspection by IVS..................................................................................7
c. Design and manufacture of FV-241 ................................................................7
5. Project Completion .............................................................................................9
6. 2009 Refinery Fire and Brinell Testing by J.R. Eggleston...............................10
7. 2013 Refinery Fire and Explosion ....................................................................11
C. Procedural Background.....................................................................................13
D. Legal Background.............................................................................................15
1. Standards of Review .........................................................................................15
a. Dismissal under Rule 12(b)(6) ......................................................................15
b. Summary judgment under Rule 56................................................................16
2. Ascertaining Wyoming Law.............................................................................16
3. Wyoming Contract Interpretation Principles....................................................17
II. Discussion...................................................................................................................18
A. Claims Against the CB&I Defendants..............................................................18
1. Claim 1 - Breach-of-Contract Claim Against Howe-Baker .............................19
a. Additional factual background ......................................................................19
b. Analysis.........................................................................................................21
i. Howe-Baker was not required to plead a contractual limitations defense 21
ii. Article 1.7 bars Sinclair’s breach-of-contract claim against Howe-Baker 22
a. Additional legal background .........................................................................25
i. Economic loss rule ....................................................................................25
ii. Independent duty doctrine .........................................................................27
b. Analysis.........................................................................................................29
i. Sinclair has not identified an independent duty ........................................29
ii. Article 1.7 of the EPC Contract bars Sinclair’s negligence claims...........31
B. CB&I Defendants’ Indemnity Counterclaim....................................................32
1. The EPC Contract’s Indemnity Provisions.......................................................33
2. Analysis.............................................................................................................35
a. The CB&I Defendants may assert their indemnity counterclaim .................35
i. Applicable standard...................................................................................35
ii. Application ................................................................................................40
b. The EPC Contract requires Sinclair to indemnify the CB&I Defendants.....42
C. The Eggleston Order.........................................................................................44
1. Additional Factual and Procedural Background...............................................45
2. Reviewability of the Eggleston Order ..............................................................47
3. Whether the Eggleston Order was Error...........................................................52
a. Additional legal background .........................................................................52
b. Analysis.........................................................................................................53
D. Claims Against ACE and the IVS Defendants .................................................56
1. Claim 4 - Sinclair’s Breach-of-Contract Claim Against ACE Based on the Metallurgy Theory ............................................................................................56
2. Claims 5 and 6 - Sinclair’s Negligence and Strict Products Liability Claims Against ACE and the IVS Defendants Based on the Metallurgy Theory ........59
a. Additional legal background .........................................................................59
b. Analysis.........................................................................................................61
3. Claim 7 - Sinclair’s Failure-to-Warn Claim Against ACE and the IVS Defendants ........................................................................................................63
a. Sinclair knew before 2013 that FV-241 was made from carbon steel ..........64
i. Additional legal background .....................................................................64
ii. Analysis.....................................................................................................65
i. Legal standards..........................................................................................70
ii. Analysis.....................................................................................................70
4. Sinclair’s Remaining Claims Based on the OEM Specifications Theory ........72
III. Conclusion ..................................................................................................................73
Sinclair had purchased the Unit in 2004. Sinclair moved the Unit from California to Wyoming and converted it from its previous use to a hydrotreater, a refinery unit that introduces hydrogen to remove impurities from the product stream. Sinclair contracted the design, engineering, and construction work to other companies. During the moving and conversion process, FV-241 was remanufactured and installed on the Unit. Work on the Unit was completed in 2006.
Following the 2013 explosion and fire, Sinclair brought this diversity action against seven companies involved in dismantling the Unit, converting it to a hydrotreater, rebuilding it in Wyoming, and remanufacturing and installing FV-241. The Defendants, now Appellees, divide into three groups:
- Howe-Baker Engineers, Ltd. (“Howe-Baker“) and its subcontractors, A&B Builders, Ltd. (“A&B“) and Matrix Engineering, Ltd. (“Matrix“) (collectively, “CB&I Defendants“), which provided construction and field engineering services;
- Applied Control Equipment, LLC (“ACE“), which contracted with Sinclair to repair, refurbish, or replace valves from the Unit including FV-241; and
- Emerson Process Management, LLLP (“Emerson“), Fisher Services Co. (“Fisher“), and Instrument & Valve Services Co. (“IVS“) (collectively, “IVS
Sinclair alleged various contract and tort claims. The district court granted several motions to dismiss and motions for summary judgment that eliminated all of Sinclair’s claims. The court also entered summary judgment in favor of the CB&I Defendants’ indemnity counterclaim.
Exercising jurisdiction under
I. BACKGROUND
The following provides (A) additional information about the three groups of Appellees, (B) factual background, (C) procedural background, and (D) applicable legal standards.
A. Appellees
1. CB&I Defendants
The CB&I Defendants consist of Howe-Baker, A&B, and Matrix.1 Howe-Baker entered into the Engineering, Procurement, and Construction Contract (“EPC Contract“) with Sinclair to perform construction and engineering work on the Unit. Howe-Baker subcontracted the construction to A&B and the engineering to Matrix. A&B installed FV-241 on the Unit.
ACE contracted with Sinclair (the “ACE Contract“) to inspect, repair, and replace valves from the Unit. It coordinated with the IVS Defendants as a parts broker.
3. IVS Defendants
The IVS Defendants consist of Emerson, Fisher, and IVS. Emerson Electric Co. owns all three.
Through a “Representative Agreement,” Emerson appointed ACE as a “sales, engineering, and service representative for” products sold by certain “Emerson Companies,” including Fisher. App. at 9541, 9555.
Fisher was the original equipment manufacturer (“OEM“) of FV-241. Fisher also developed FirstVue, the software program that ACE used to generate specifications for FV-241.
IVS is a division of Emerson. Id. at 9528 (ACE’s proposal to Sinclair, which describes “Emerson’s Instrument and Valve Service Division“); id. at 9561 (Representative Agreement’s description of IVS as part of Emerson’s Process Systems & Solutions Division). IVS repairs and remanufactures valves. It remanufactured FV-241.
B. Factual Background
The material facts are undisputed unless otherwise noted.
1. The Unit’s Origins
In 2004, Sinclair purchased the Unit, which was then a hydrocracker—a refinery unit that introduces hydrogen at high temperatures and high pressure to “crack” larger hydrocarbon molecules into smaller ones. App. at 1723 (SAC); id. at 14,917 (declaration
2. Process Design by Fluor Corporation
Fluor Corporation (“Fluor“), a nonparty to this action, had provided engineering input for the Unit when it was first constructed in the 1970s or 1980s. Sinclair retained Fluor to help convert the Unit from a hydrocracker to a hydrotreater. Sinclair charged Fluor with preparing a “process design,” which yielded detailed specifications for the Unit’s conversion. This left some field engineering work to be completed by the CB&I Defendants. App. at 2942-43, 2953, 2960-62.
Sinclair, Fluor, and another firm collaborated to create “piping and instrumentation diagrams” (“P&IDs“) for the Unit. Id. at 2953-56. Sinclair viewed the P&IDs as “the controlling document[s] for the construction of [the Unit],” akin to a “[B]ible.” Id. at 2957. Consistent with Fluor’s process design, the P&IDs instructed that FV-241 and the line of pipes connected to it should be made from stainless steel. Id. at 2956; id. at 10,509 (explaining the relationship between Fluor’s work and the third firm’s work); see id. at 2898 (deposition testimony of Albert Gualtieri, Sinclair’s Manager of Capital Projects); id. at 3106 (Sinclair’s admission that Fluor provided specifications that specified metallurgy for the Unit’s valves and piping).
3. EPC Contract
In February 2005, Sinclair and Howe-Baker entered into the EPC Contract. Howe-Baker subcontracted its construction obligations under the EPC Contract to A&B
First, Article 1 (including subsidiary Articles 1.1 to 1.7) sets out Howe-Baker’s guarantees and warranties, creates a warranty claims process for disputes about the quality of Howe-Baker’s work, provides that this process is Sinclair’s exclusive remedy under the EPC Contract, and limits Howe-Baker’s liability outside of the process.
Second, Article 28 (including subsidiary Articles 28.1 to 28.4) includes cross indemnification provisions applicable to Howe-Baker and Sinclair.
4. ACE Contract
a. Solicitation of the ACE Contract
The EPC Contract required Sinclair to provide purchased materials and equipment for the Unit. App. at 1294 (contract amendment). To do so, Sinclair solicited bids for the inspection and the repair or replacement of the Unit’s control valves, including from ACE. Id. at 9541. As part of this solicitation, Sinclair provided a spreadsheet containing “process information” about the operating conditions each valve would experience after the Unit’s conversion, including:
- the type of liquid the valve would carry (in FV-241’s case, hydrogen);
- the viscosity and flow rate of that liquid;
- temperatures; and
pressures.
Id. at 9513-14 (spreadsheet); id. at 9519-20 (deposition testimony of Brian McManus, ACE).
The “process information” for FV-241 said it would carry high-temperature, high pressure hydrogen. The parties agree this created the risk of HTHA, and FV-241 therefore should have been made from stainless steel, not carbon steel. See, e.g., id. at 9306 (declaration of Dr. Bastiaan Cornelissen, Sinclair’s retained metallurgy expert); Aplee. CB&I Br. at 13 n.4; Aplee. IVS Br. at 29; Aplee. ACE Br. at 36.
ACE proposed to inspect valves from the Unit and to repair or replace them as necessary. App. at 9526. Its proposal described the “work scope” as follows:
The initial scope consists of opening and inspecting 68 control valves. After inspection, we will come to you with our best recommendation as to whether it will be more cost effective for you to go ahead and complete the repair (valve is in pretty good shape), rework or replace the trim (valve needs attention), or replace the valve with a newly remanufactured [Fisher] Encore valve (valve is in bad shape.)[.]
Id. at 9528.
The proposal also represented that “[a]ll new or [remanufactured Fisher] Encore valves will be run through Fishers [sic] sizing program to guarantee performance in the application specified.” Id. at 9529. The parties agree that “Fishers [sic] sizing program” referred to FirstVue, the Fisher software program that ACE later used to generate specifications for FV-241.
Sinclair accepted ACE’s proposal by placing a purchase order.
As coordinated by ACE, IVS received and inspected valves from Sinclair, including “FV-10,” FV-241’s predecessor on the pre-conversion Unit. IVS noted that FV-10 was made from stainless steel. App. at 9663 (“Customer Repair Report“); id. at 9668-69 (deposition testimony of Doug Smith, IVS employee who inspected FV-241). Although FV-10 was in repairable condition, problems with FV-10’s serial numbers prevented IVS from verifying that it complied with certain corrosion prevention and control standards. Id. at 2811 (declaration of Patrick Reilly, IVS’s
c. Design and manufacture of FV-241
ACE then generated a quote and proposed specifications for FV-241 to replace FV-10. When developing specifications for FV-241, ACE did not rely on FV-10’s specifications and instead “start[ed] from scratch.” App. at 3250 (deposition testimony of Stan Burns, ACE); accord id. at 3206-07 (deposition testimony of Patrick Reilly, IVS’s
To develop the specifications for FV-241, Stan Burns—Sinclair’s principal point of contact at ACE—relied on the “process information” in the spreadsheet provided by
Mr. Burns used FirstVue, the valve sizing software referenced in the ACE Contract, to generate the specifications for FV-241. Id. at 3241-42. In November 2005, he provided a quote and proposed specifications for FV-241 to Dick Edwards, his point of contact at Sinclair. Mr. Burns and Mr. Edwards expected that FV-241 would be a remanufactured Fisher “Encore” model carbon steel valve with “integral flanges“—flanges cast onto it as part of the valve body. Id. at 13,807 (Edwards deposition testimony); id. at 13,812 (quotation); see id. at 11,692 (correspondence between Mr. Burns and Mr. Edwards).
IVS did not have in stock a valve core with integral flanges that could be used to remanufacture FV-241. ACE therefore told Sinclair that IVS could make FV-241 by welding flanges onto a valve core with “buttweld ends“—ends that do not have flanges and are tapered so that other components easily can be welded onto them. Id. at 11,692 (correspondence between Mr. Burns and Mr. Edwards).
5. Project Completion
Sinclair received FV-241 from IVS in April 2006. App. at 2823 (Sinclair “Incident Investigation” document). FV-241 was marked as made from carbon steel on (1) abbreviations on its actuator tag,4 (2) cast lettering on the valve body, and (3) imprints on both valve flanges. Id. at 2827 (“Incident Investigation” document); id. at 17,666 (Sinclair’s admissions). A day after Sinclair received FV-241, ACE emailed to Sinclair specification sheets for the Unit’s control valves. Id. at 3372 (covering email); id. at 3103-04 (Sinclair’s admission). The specification sheets again said that FV-241 was made from carbon steel. Id. at 3394 (specification sheet); id. at 3103-04 (Sinclair’s admission).
FV-241 in 2006. The grey portion is the valve body, which is at issue in this litigation. The green portion is an actuator that controls the valve. The actuator is not at issue.
Sinclair did not check FV-241’s metallurgy upon receiving it at the Refinery. Id. at 2823. Sinclair turned FV-241 over to A&B, which installed it on the Unit. See id. at 9317 (Cornelissen expert report).
6. 2009 Refinery Fire and Brinell Testing by J.R. Eggleston
In March 2009, the Unit caught on fire. During a damage assessment, Sinclair removed FV-241 from the Unit because parts of the valve had been visibly damaged. App. at 6629-30.
The parties dispute whether J.R. Eggleston, Sinclair’s inspection supervisor at the Refinery, performed Brinell testing—a form of hardness testing—on FV-241 after the 2009 fire. A Brinell test can be used to determine whether carbon steel has been
7. 2013 Refinery Fire and Explosion
In September 2013, FV-241 fractured on one of its welded-on flanges, “a short distance downstream of the . . . weld” that connected the flange to the valve core. App. at 9320 (Cornelissen expert report); see id. at 2823 (Sinclair “Incident Investigation” document). HTHA caused the fracture. Hydrogen gas escaped from the fracture, ignited, and exploded.
Image of FV-241 after it fractured. The right-hand side of the valve is missing its flange.
Close-up image of FV-241 after it fractured. The arrow points to the weld that connected FV-241’s valve body to its welded-on flanges.
Sinclair attributes the failure of FV-241 to two causes: (1) FV-241 was made from carbon steel instead of stainless steel, making it more susceptible to HTHA (“Metallurgy Theory“); and (2) FV-241’s welded-on flanges had a wall thickness thinner than Fisher’s OEM specifications (“OEM Specifications Theory“).
C. Procedural Background
In the operative second amended complaint (“SAC“), Sinclair asserted seven claims:
- Breach of contract against Howe-Baker;
- Negligence against the CB&I Defendants;
- Negligence of subcontractors against the CB&I Defendants;
- Breach of contract against ACE based on the Metallurgy Theory and OEM Specifications Theory;
- Negligence against ACE and the IVS Defendants based on the Metallurgy Theory and the OEM Specifications Theory;
- Strict products liability against ACE and the IVS Defendants based on the Metallurgy Theory and the OEM Specifications Theory; and
- Failure to warn against ACE and the IVS Defendants based on the Metallurgy Theory, and failure to warn that FirstVue could not verify that a valve was made from the correct metallurgy.5
- A January 2018 order (“CB&I MTD Order“) that dismissed Sinclair’s negligence claims against the CB&I Defendants under
Rule 12(b)(6) , App. at 2003; - A July 2018 order by the magistrate judge (“Eggleston Order“) that struck Mr. Eggleston’s addendum to his deposition testimony and struck in part his errata sheets, id. at 16,081;
- A June 2019 order (“Howe-Baker MSJ Order“) that granted summary judgment against Sinclair’s first claim for breach of contract against Howe-Baker, id. at 18,210;
- Another June 2019 order (“CB&I MSJ Order“) that granted summary judgment in favor of the CB&I Defendants’ indemnity counterclaim, id. at 18,232;
- Another June 2019 order (“Omnibus Order“) that partly granted summary judgment against Sinclair’s fourth through seventh claims, id. at 18,272;
- A July 2019 order (“Omnibus Reconsideration Order“) that denied Sinclair’s motion to reconsider the Omnibus Order, id. at 18,590; and
- An August 2019 order (“IVS Second MSJ Order“) that granted summary judgment against Sinclair’s remaining claims based on the OEM Specifications Theory, id. at 18,843.
After the Howe-Baker MSJ Order and the CB&I MSJ Order issued, the district court entered a judgment as to only the CB&I Defendants under
D. Legal Background
The following explains (1) three relevant standards of review, (2) how federal courts ascertain Wyoming law, and (3) Wyoming contract interpretation principles.
1. Standards of Review
a. Dismissal under Rule 12(b)(6)
We review de novo a district court’s decision to grant a motion to dismiss for failure to state a claim. Acosta v. Jani-King of Okla., Inc., 905 F.3d 1156, 1158 (10th Cir. 2018) (citing SEC v. Shields, 744 F.3d 633, 640 (10th Cir. 2014)). We accept “all well-pleaded factual allegations in the complaint . . . as true,” and we view them “in the light most favorable to the nonmoving party . . . .” Id. (quoting Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir. 2006)). A complaint must allege facts sufficient to state a plausible claim for relief on its face—that is, “a plaintiff must plead ‘factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
Summary judgment under
Rule 56
“We review the grant of summary judgment by the district court de novo, applying the same legal standard to the evidence in the record as did the district court.” Shotts v. GEICO Gen. Ins. Co., 943 F.3d 1304, 1314 (10th Cir. 2019) (quotations omitted). In doing so, “[w]e view the evidence and draw reasonable inferences in the light most favorable to the nonmoving party.” Teets v. Great-W. Life & Annuity Ins. Co., 921 F.3d 1200, 1211 (10th Cir. 2019). “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
2. Ascertaining Wyoming Law
Federal courts exercising diversity jurisdiction apply the substantive law of the forum state—here, Wyoming. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938); McGehee v. Forest Oil Corp., 908 F.3d 619, 624 (10th Cir. 2018). When ascertaining Wyoming law, we look first to “the most recent decisions of the state‘s highest court.” Wade v. EMCASCO Ins. Co., 483 F.3d 657, 665-66 (10th Cir. 2007). If no controlling decision exists, we must “attempt to predict how the highest court would interpret the issue.” Genzer v. James River Ins. Co., 934 F.3d 1156, 1164 (10th Cir. 2019) (quotations
3. Wyoming Contract Interpretation Principles
In Wyoming,
[the] basic purpose in construing or interpreting a contract is to determine the intention and understanding of the parties. If the contract is in writing and the language is clear and unambiguous, the intention is to be secured from the words of the contract. And the contract as a whole should be considered, with each part being read in light of all other parts.
Mountain W. Mines, Inc. v. Cleveland-Cliffs Iron Co., 470 F.3d 947, 951 (10th Cir. 2006) (quoting Wyo. Game & Fish Comm‘n v. Mills Co., 701 P.2d 819, 822 (Wyo. 1985)).
Wyoming courts give contracts their “common sense and plain meaning,” and “[t]he language of a contract is construed in accordance with what a reasonable person would understand the terms to mean.” Int‘l Surplus Lines Ins. Co. v. Wyo. Coal Refin. Sys., Inc., 52 F.3d 901, 903 (10th Cir. 1995) (citing State Farm & Cas. Co. v. Paulson, 756 P.2d 764, 765 (Wyo. 1988)); accord Amoco Prod. Co. v. EM Nominee P‘ship, 2 P.3d 534, 540 (Wyo. 2000). “The contract is to be interpreted by an objective standard and,
When contractual language is unambiguous, contract interpretation is a legal question left to the court to decide without resort to extrinsic evidence. Sutherland v. Meridian Granite Co., 273 P.3d 1092, 1095 (Wyo. 2012) (citing Union Pac. Res. Co. v. Texaco, 882 P.2d 212, 219-20 (Wyo. 1994)). When contractual language is ambiguous, a court may consider extrinsic evidence. Id. In such circumstances, contractual interpretation may become a mixed question of law and fact. Springer v. Blue Cross & Blue Shield of Wyo., 944 P.2d 1173, 1176 (Wyo. 1997). A genuine issue of material fact about contractual meaning may therefore preclude summary judgment.
II. DISCUSSION
We divide our analysis as follows: (A) Sinclair‘s claims against the CB&I Defendants, (B) the CB&I Defendants’ indemnity counterclaim, (C) Mr. Eggleston‘s testimony, and (D) Sinclair‘s claims against ACE and the IVS Defendants.
A. Claims Against the CB&I Defendants
This section addresses (1) Sinclair‘s first claim for breach of contract against Howe-Baker and (2) its second and third claims for negligence and negligence of
1. Claim 1 - Breach-of-Contract Claim Against Howe-Baker
In the Howe-Baker MSJ Order, the district court granted summary judgment against Sinclair‘s first claim for breach of contract against Howe-Baker.
We begin with additional factual background about Article 1 of the EPC Contract. We next reject Sinclair‘s argument that Howe-Baker waived reliance on Article 1 by not pleading a contractual limitations period defense in its answers, and we hold that Article 1.7 bars its breach-of-contract claim against Howe-Baker.
Additional factual background
We review several relevant Articles of the EPC Contract.
First, Article 1.1 describes Howe-Baker‘s guarantees for design and engineering work. It states that Howe-Baker will remedy any defects at no cost to Sinclair if it receives written notice of a defect during the warranty period.
Second, Article 1.2 lists Howe-Baker‘s standards for fabricated equipment and field construction work. It also states that Howe-Baker will remedy any defects at no cost to Sinclair if it receives written notice of a defect during the warranty period.
Third, Articles 1.4 and 1.5 establish warranty periods and procedures:
1.4 Warranty Period: Contractor‘s guarantees set forth in [Articles] 1.1, 1.2 and 1.3 shall extend for twelve (12) months from Mechanical Completion.8 Any period wherein the
Work is not available for use and/or is limited in use due to defects in materials, workmanship or engineering furnished by Contractor shall extend the guarantee period by an equal period of time.
1.5 Contractor‘s Failure to Respond to Warranty Claim: In the event Contractor . . . shall fail to promptly and adequately correct . . . defects, Sinclair shall have the right to correct or to have such defects corrected for the account of Contractor, and Contractor shall promptly pay Sinclair the costs incurred in correcting such defects.
App. at 1263.
Fourth, Article 1.7 includes an exclusive-remedies clause, disclaims any other warranties or guarantees, and limits Howe-Baker‘s liability:
Limitation: All warranties of any nature made by Contractor [i.e., Howe-Baker] in connection with the work are limited to those set forth in this Article 1. Contractor disclaims all statutory, oral, expressed or implied warranties, including warranties of merchantability or fitness for a particular purpose, and warranties arising from course of dealing or trade usage. Sinclair shall allow Contractor to perform tests and/or remedial services at a mutually agreeable time . . . . The remedies of Sinclair set forth in this Article 1 constitute Sinclair‘s sole and exclusive recourse with respect to the quality of the work, and Sinclair shall release contractor from any liability in excess thereof, regardless of Contractor‘s fault, negligence or strict liability. Such exclusive remedies shall not be deemed to have failed for their essential service so long as Contractor is willing and able to repair or replace the defective work as prescribed above. Contractor shall have no liability unless notified in writing of a defect within 12 months of Mechanical Completion consistent with the conditions stated in Article 1.0.
Id. at 1263 (emphasis added).
Article 1 thus restricts Sinclair from bringing breach-of-contract claims against Howe-Baker because it
- states the standards that govern Howe-Baker‘s performance;
- creates a warranty claims process in case Sinclair discovers a defect in the Unit whereby Sinclair must give written notice to Howe-Baker within a year of Mechanical Completion, and Howe-Baker must remedy any defects at no cost to Sinclair;
- specifies that Article 1‘s warranty claims process is Sinclair‘s exclusive remedy as to the quality of work; and
- releases Howe-Baker from any other liability regardless of its fault, negligence, or strict liability.
Analysis
The district court granted summary judgment to Howe-Baker on Sinclair‘s breach-of-contract claim. It permitted Howe-Baker to assert a contractual limitations defense despite not pleading one, and held that Article 1 creates a 12-month contractual limitations period that bars Sinclair‘s breach-of-contract claim against Howe-Baker. App. at 18,220-23, 18,226-27. We affirm on the alternative ground that (i) Howe-Baker was not required to plead a contractual limitations defense because its Article 1 argument is not a contractual limitations defense, and (ii) Article 1.7 bars Sinclair‘s breach-of-contract claim.
Howe-Baker was not required to plead a contractual limitations defense
Sinclair argues that Howe-Baker had to plead a contractual limitations defense to rely on Article 1 to defend against its breach-of-contract claim. It contends the district court erred by permitting Howe-Baker to raise a contractual limitations defense despite not pleading one. This argument is misguided.
Article 1.7 bars Sinclair‘s breach-of-contract claim against Howe-Baker
Article 1.7‘s unambiguous language bars the breach-of-contract claim. Article 1.7 contains (1) an exclusive-remedies clause and (2) a limitation-of-liability clause. It states that “[(1)] the remedies of Sinclair set forth in this Article 1 constitute Sinclair‘s sole and exclusive recourse with respect to the quality of the work, and [(2)] Sinclair shall release Contractor from any liability in excess thereof, regardless of Contractor‘s fault . . . .” App. at 1263. Sinclair‘s breach-of-contract claim against Howe-Baker seeks recourse outside the warranty claims process for the quality of the work performed under the EPC Contract. Article 1.7 plainly bars such a claim.
Sinclair‘s arguments to the contrary lack force. First, citing a six-page section of its SAC, Sinclair contends it “alleged 31 contractual breaches” and that “[o]nly one of
Second, Sinclair contends that interpreting Article 1.7 as waiving its breach-of-contract claim against Howe-Baker would be inconsistent with Article 2.3. It points to the following emphasized language:
2.3 Sinclair and their representatives, and others as may be required by applicable laws, ordinances and regulations, shall have the right at all reasonable times to inspect the Work and all material, supplies, and equipment for the Work at the jobsite and at Contractor‘s and its subcontractors’ shops for conformance with the Contract. Contractor shall provide, or cause to be provided access and sufficient, safe and proper facilities for such inspections. Neither the failure to make such inspection nor to discover defective workmanship, materials or equipment, nor approval of or payment to
Contractor for such Work, materials or equipment shall prejudice the rights of Sinclair.
App. at 1264.
Sinclair‘s argument lacks merit. Article 2.3 permits Sinclair and its representatives to inspect the work of Howe-Baker and its subcontractors during their performance. It also states that Sinclair‘s rights will not be prejudiced by a failure to inspect, by approving work, or by making payments to Howe-Baker. It preserves Sinclair‘s warranty claims process rights under Article 1.7, but it does not add to them.
Third, Sinclair argues that Article 1.7 does not apply to its breach-of-contract claim against Howe-Baker because Article 1 refers to the “warranties” made by Howe-Baker to Sinclair and does not expressly bar breach-of-contract claims. But Sinclair‘s breach-of-contract claim falls squarely within the limitation-of-liability and exclusive-remedies clauses in Article 1.7.
* * * *
In sum, we hold that (1) Howe-Baker was not required to plead a contractual limitations defense to rely on Article 1 of the EPC Contract, and (2) Article 1.7 bars Sinclair‘s first claim for breach of contract against Howe-Baker. We therefore affirm the district court‘s grant of summary judgment against Sinclair‘s first claim.
2. Claims 2 and 3 - Sinclair‘s Negligence Claims Against the CB&I Defendants
In the CB&I MTD Order, the district court dismissed Sinclair‘s second and third claims against the CB&I Defendants alleging negligence. The court held that (1)
Sinclair argues we should reverse these dismissals because its negligence claims are based on duties independent of the EPC Contract, and because Article 1.7 does not bar them. We disagree and affirm.
We explain below Wyoming‘s economic loss rule and independent duty doctrine and then evaluate Sinclair‘s arguments. We agree with the district court that Sinclair has failed to identify an independent duty to support its negligence claims. We also agree that Article 1.7 of the EPC Contract independently bars Sinclair‘s negligence claims.
Additional legal background
Economic loss rule
The economic loss rule bars a party to a contract from using a tort claim to recover contract damages unless the party can show it is owed an “independent duty” in tort creating a separate entitlement to those damages. The rule does not bar a tort claim to recover non-contract damages.
The Wyoming Supreme Court has explained that “[t]he ‘economic loss rule’ bars recovery in tort when a plaintiff claims purely economic damages unaccompanied by physical injury to persons or property.” Rissler & McMurray Co. v. Sheridan Area Water Supply Joint Powers Bd., 929 P.2d 1228, 1234 (Wyo. 1996). It “is ‘founded on the theory that parties to a contract may allocate their risks by agreement and do not need the special protections of tort law to recover for damages caused by a breach of the
Both Wyoming law and the Restatement (Third) of Torts recognize the economic loss rule also applies when (1) a contract concerns property, (2) the property is damaged because of negligent performance of that contract, and (3) a party to that contract brings a tort claim to seek compensation for that property damage. See Restatement (Third) of Torts: Liability for Economic Harm § 3 cmt. c & illustrations (Am. L. Inst. 2020). For example, the Wyoming Supreme Court has held that when damage caused by a defective purchased product is limited to the product itself and does not extend to persons or other property, the economic loss rule bars recovery in tort and limits the purchaser to a contract claim. See Cont‘l Ins. v. Page Eng‘g Co., 783 P.2d 641, 647-49 (Wyo. 1989) (explaining the legal and public policy reasons for this decision, and identifying it as the majority rule); W. Equip. Co. v. Sheridan Iron Works, Inc., 605 P.2d 806, 807 (Wyo. 1980) (“Economic loss includes costs of repair and replacement of defective property which is the subject of the transaction . . . .” (quoting Salmon Rivers Sportsman Camps, Inc. v. Cessna Aircraft Co., 544 P.2d 306, 309-10 (Idaho 1975))).
The Wyoming Supreme Court has applied this principle in the construction context, barring tort claims when property damage is limited to the property at issue in a construction contract. It has noted that parties to a construction contract have an opportunity to apportion liability regarding that property by mutual assent, and that contract damages are usually sufficient compensation to protect a party‘s expectation interest in that property. See Excel Constr., Inc. v. HKM Eng‘g, Inc., 228 P.3d 40, 45-46 (Wyo. 2010) (apportionment of liability by contract); Rissler & McMurray Co., 929 P.2d at 1235 (same); JBC of Wyo. Corp. v. City of Cheyenne, 843 P.2d 1190, 1197 (Wyo. 1992) (citing Bowdish v. Johns Creek Assoc., 200 Ga. App. 93 (1991)) (contract law protects expectation interests); see also Restatement (Third) of Torts: Liability for Economic Harm § 3 cmt. b (explaining the “[r]ationale” for the economic loss rule).
Independent duty doctrine
The independent duty doctrine is an exception to the economic loss rule. See Dan B. Dobbs, Paul T. Hayden & Ellen M. Bublick, Dobbs’ Law of Torts § 615 (2d ed. June 2020 update). Under this doctrine, a party to a contract may maintain a tort claim to recover contract damages if the claim is “predicated on an independent duty.” Excel Constr., 228 P.3d at 47.11
In Excel Construction, Inc., the Wyoming Supreme Court described the independent duty doctrine:
Recovery on a tort theory requires a showing that a duty independent of contract was violated. Determining whether a particular . . . tort claim is simply a repackaged contract claim requires consideration of the conduct alleged, its relationship to the contractual duties of the parties, the source of the tort duty alleged to have been breached, and the nature of the damages claimed.
228 P.3d at 48 (citations omitted).
In construction contracts, there is an implied warranty that the work will be performed in a skillful, careful, diligent and workmanlike manner. Where negligence on the part of the contractor results in a breach of this warranty, a cause of action ex contractu and a tortious action premised on negligence, or both, are available to the contractee.
Cline v. Sawyer, 600 P.2d 725, 732 (Wyo. 1979) (collecting decisions and evaluating a commercial construction contract); accord Rogers v. Wright, 366 P.3d 1264, 1275-76 (Wyo. 2016) (citing Tavares v. Horstman, 542 P.2d 1275, 1282 (Wyo. 1975)).
As Sinclair appears to acknowledge, Aplt. Br. at 27, 30-31, the Wyoming Supreme Court has held that parties to a contract can agree to waive implied warranties, thereby waiving the independent duty grounded in the implied warranty. See Rogers, 366 P.3d at 1277 (contract for purchase of new home from a homebuilder).12
Analysis
Sinclair has not identified an independent duty
Sinclair argues that an independent duty can be derived from implied warranties in the EPC Contract or from an industry standard called American Petroleum Institute 941 (“API 941“). We are not persuaded.
In its appeal, Sinclair has not argued that its negligence claims fall outside the economic loss rule. It argues only that the CB&I Defendants owed independent duties that exempt its negligence claims from the economic loss rule. Sinclair has therefore conceded that its negligence claims fail unless it can identify an independent tort duty.13
Sinclair has not identified one. First, it attempts to locate an independent duty in the warranties that Wyoming law implies in construction contracts. But as the Wyoming
Second, Sinclair argues that API 941, an American Petroleum Institute standard concerning metallurgy for control valves and other refinery components, establishes an independent duty. Sinclair argues the Wyoming Supreme Court held in Rogers v. Wright
Sinclair thus has failed to identify an independent duty that supports its negligence claims.
Article 1.7 of the EPC Contract bars Sinclair‘s negligence claims
Even if Sinclair‘s negligence claims arose from an independent duty, the exclusive-remedies provision in Article 1.7 of the EPC Contract would bar them. The provision states, “The remedies of Sinclair set forth in this Article 1 constitute Sinclair‘s sole and exclusive recourse with respect to the quality of the work . . . .” App. at 1263. Sinclair‘s negligence claims concern the quality of the work performed under the EPC Contract. Sinclair argues the work was substandard because FV-241 was installed on the Unit and caused its failure. The warranty claims process set out in Article 1 is Sinclair‘s exclusive recourse for such matters.
Sinclair argues that Article 1.7 applies only to Howe-Baker and not its subcontractors. It correctly observes that the release-of-liability clause in Article 1.7 is limited to Howe-Baker. (“. . . Sinclair shall release [Howe-Baker] from any liability in
* * * *
Sinclair has conceded that its negligence claims against the CB&I Defendants fail unless it can identify an independent tort duty. It has not identified one. Article 1.7 of the EPC Contract also bars Sinclair‘s negligence claims. We therefore affirm the district court‘s dismissal of Sinclair‘s second and third claims against the CB&I Defendants alleging negligence.
B. CB&I Defendants’ Indemnity Counterclaim
In the Howe-Baker MSJ Order, the district court held that Sinclair must indemnify the CB&I Defendants for their costs of litigation. Sinclair appeals, arguing that (1) the CB&I Defendants waived their indemnity counterclaim by pleading it in their answer to
We first present the EPC Contract‘s indemnity provisions. We then determine that the CB&I Defendants may assert their indemnity counterclaim notwithstanding their failure to replead it in their answers to Sinclair‘s amended complaints. Finally, we turn to the merits and affirm the district court‘s determination that Sinclair must indemnify the CB&I Defendants for their litigation costs.
1. The EPC Contract‘s Indemnity Provisions
Article 28 of the EPC Contract contains cross-indemnity provisions. The following provisions are relevant:
28.1 Contractor agrees to defend, indemnify, and hold harmless Sinclair . . . from and against any claim, demand, cause of action, liability, loss or expense, arising:
28.1.1 By reason of Contractor‘s actual failure to comply with any law, ordinance, regulation, rule or order, or with this Contract. . . .
***
28.1.4 FROM DAMAGE TO OR LOSS TO THE PROPERTY OF SINCLAIR . . . ARISING DIRECTLY OR INDIRECTLY OUT OF THIS CONTRACT, TO THE EXTENT CAUSED BY THE NEGLIGENCE OF CONTRACTOR OR ITS SUBCONTRACTORS, BUT SUCH LIABILITY SHALL NOT EXCEED TEN MILLION DOLLARS ($10,000,000) TOTAL CUMULATIVE LIABILITY, PER OCCURRENCE AND IN THE AGGREGATE.
***
28.2 Contractor‘s indemnity obligations shall apply regardless of whether the party to be indemnified was concurrently negligent, whether active or passively, excepting only where the injury, loss or damage was caused by the gross negligence or willful misconduct of, or by defects in design furnished by, the party to be indemnified, or as otherwise provided in [Article] 28.3. Contractor‘s defense and indemnity obligations shall include the duty to reimburse any attorneys’ fees and expenses incurred by Sinclair for legal action to enforce Contractor‘s indemnity obligations and Sinclair obtains a favorable judgment with respect thereto.
28.3 Sinclair agrees to defend, indemnify and hold harmless Contractor, its subcontractors and their respective affiliated companies and all of their directors, officers, employees, agents and representatives (“Contractor‘s Indemnified Parties“), from and against any claim, demand, cause of action, liability, loss or expense arising:
28.3.1 By reason of Sinclair‘s actual failure to comply with any law, ordinance, regulation, rule or order, or with this Contract. This [Article] 28.3.1 includes, but is not limited to, fines or penalties by government authorities and claims arising from Sinclair‘s actual or asserted failure to pay taxes.
***
28.3.4 FROM DAMAGE TO OR LOSS OF THE PROPERTY OF SINCLAIR . . . ARISING DIRECTLY OR INDIRECTLY OUT OF THIS CONTRACT, HOWSOEVER SUCH DAMAGE OR LOSS SHALL OCCUR, INCLUDING THE FAULT OR CONCURRENT OR SOLE NEGLIGENCE (ACTIVE OR PASSIVE) OF CONTRACTOR OR CONTRACTOR‘S INDEMNIFIED PARTIES, EXCEPT AS PROVIDED IN [ARTICLE] 28.1.4.
***
28.4 Sinclair‘s indemnity obligations shall apply regardless of whether the party to be indemnified was concurrently or solely negligent (active or passive). Sinclair‘s defense and
indemnity obligations shall include the duty to reimburse any attorneys’ fees and expenses incurred by Contractor for legal action to enforce Sinclair‘s indemnity obligations and Contractor obtains a favorable judgment with respect thereto.
App. at 1278-80 (bold typeface and all caps in original; asterisks indicate omitted paragraphs).
Analysis
We hold the CB&I Defendants may assert their indemnity counterclaim notwithstanding their failure to replead it in their answers to Sinclair‘s amended complaints. We further hold that the EPC Contract requires Sinclair to indemnify the CB&I Defendants for their litigation costs.
The CB&I Defendants may assert their indemnity counterclaim
The CB&I Defendants may pursue their indemnity counterclaim because Sinclair cannot show prejudice from their failure to replead it in their answers to the amended complaints.
Applicable standard
The
But other courts have been more flexible, permitting a defendant to pursue its counterclaim unless the plaintiff shows that the failure to replead it caused prejudice. For example, in Hughes v. Abell, 867 F. Supp. 2d 76 (D.D.C. 2012), the court characterized the plaintiff‘s argument that an amended answer that omitted counterclaims nullified previously pleaded counterclaims as having “some force“:
Federal Rule of Civil Procedure 7 states that “[o]nly these pleadings are allowed” and then sets forth a list of pleadings that does not include counterclaims.Rule 13 requires that a counterclaim be set forth in a pleading. It would be reasonable to conclude from these two rules that a counterclaim is not a distinct pleading, but rather must be included as part of another pleading, such as an answer. And it is certainly true that “[o]nce an amended pleading is interposed, the original pleading no longer performs anyfunction in the case.” 6 Charles A. Wright, et al., Fed. Prac. & Proc. Civ. § 1476 (3d ed.). Accordingly, it is reasonable for [the plaintiff] to assert that when [the defendant] replaced its answer with an answer that did not contain counterclaims, the pleading that was before the Court (the new answer) did not contain counterclaims.
Id. But the court said “this conclusion would put form over substance.” Id. It characterized counterclaims as distinct from defenses, admissions, and denials:
An answer and a counterclaim, even if contained in the same document, serve different functions; the counterclaim shares more with a complaint, setting out claims against the other party, than it does with the answer. See Dunkin’ Donuts Inc. v. Romanias, 2002 WL 32955492, at *1–2, 2002 U.S. Dist. LEXIS 28405, at *5–6 (W.D. Pa. May 29, 2002). . . . It is not especially intuitive that a counterclaim is part of the pleading to which it is attached, nor is it obvious that counterclaims must be re-pled when an answer with counterclaims attached is superseded.
The court permitted the defendant to continue asserting its counterclaims because the plaintiff did not show that the defendant‘s failure to replead caused prejudice or led the plaintiff to believe that the counterclaims had been abandoned. Id.
The Eighth Circuit in Davis v. White, 794 F.3d 1008 (8th Cir. 2015), reached a similar conclusion. There, despite failing to replead his counterclaim in his answer to an amended complaint, the defendant continued to press the counterclaim in discovery responses, defense counsel continued to describe the defendant as a counterclaimant, and the plaintiff continued to acknowledge that he was a counterdefendant. Id. at 1015. The court said:
The Federal Rules of Civil Procedure clearly give a district court discretion to grant or deny a motion to deem a counterclaim abandoned [when a defendant fails to include it in their answer to an amended complaint].Rule 15(a)(3) provides that, “[u]nless the court orders otherwise, any required response to an amended pleading must be made within the time remaining to respond to the original pleading or within 14 days after service of the amended pleading, whichever is later” (emphasis added).Rule 15(a)(2) provides that the district court “should freely give leave [to amend] when justice so requires.” ThoughRule 13(a)(1) requires that a compulsory counterclaim be stated in “a pleading,” that term was used to clarify that counterclaims could be asserted in pleadings other than “the answer.” See 6 Wright, Miller & Kane, Federal Practice and Procedure § 1401, at 6–7 (3d ed. 2010).Rule 1 requires that theFederal Rules “be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding.” Where, as here, plaintiff is given sufficient notice that defendant is continuing to pursue a compulsory counterclaim, and plaintiff would not be unfairly prejudiced if the counterclaim proceeds, an inflexible rule that counterclaims are always abandoned if not repleaded would not serve the interests of justice. See Ground Zero Museum Workshop v. Wilson, 813 F. Supp. 2d 678, 706 (D. Md. 2011).
We find Hughes and Davis persuasive because the
This prejudice-based approach finds further support in
This leaves the question of what standard of review we should apply to a district court‘s decision to permit or bar a defendant from raising a counterclaim that it failed to replead. We hold the appropriate standard of review is abuse of discretion because we apply that standard in the analogous
ii. Application
Applying this standard here, we conclude the district court did not abuse its discretion by concluding that the CB&I Defendants’ failure to replead their indemnity counterclaim did not prejudice Sinclair. The court properly allowed the CB&I Defendants to continue asserting their indemnity counterclaim.
Sinclair received notice that the CB&I Defendants intended to continue pressing their indemnity counterclaim. They alleged two counterclaims and one crossclaim in their first answer, including their indemnity counterclaim. App. at 70-78. The CB&I
We reject Sinclair‘s argument it was prejudiced because “no discovery had been conducted on indemnity.” Aplt. Br. at 50. The merits of the indemnity counterclaim concern contract interpretation, and Sinclair has not identified what discovery it would have sought or what facts it would have established with discovery. Notably, Sinclair also did not invoke
We conclude the district court did not abuse its discretion in allowing the CB&I Defendants to pursue their indemnity counterclaim.
We affirm the district court‘s summary judgment ruling that the EPC Contract requires Sinclair to indemnify the CB&I Defendants for their litigation costs. We first explain why Howe-Baker owes no indemnity to Sinclair and then address Sinclair‘s indemnity obligations to the CB&I Defendants. Although we do not discuss every point made by the district court on this issue, we generally agree with its analysis.
Article 28 of the EPC Contract establishes cross-indemnity duties for Howe-Baker and Sinclair when there is damage or loss to Sinclair‘s property. Although these duties interact in complicated ways, Howe-Baker owes no indemnity to Sinclair under the circumstances here. Article 28.1.4 requires Howe-Baker to indemnify Sinclair for “any claim, demand, cause of action, liability, loss or expense arising from damage or loss to the property of Sinclair . . . arising out of the [EPC Contract],” but only “to the extent caused by the negligence of [the CB&I Defendants].” As we held above, Sinclair failed to identify an independent duty that supports its negligence claims against the CB&I Defendants. Thus, Sinclair cannot contend the “damage or loss to the property of Sinclair . . . arising out of the [EPC Contract]” was caused by the CB&I Defendants’ negligence.20
Sinclair argues that its indemnity obligations extend only to third-party claims against the CB&I Defendants, and not to claims that Sinclair itself may bring against the CB&I Defendants. We disagree because Article 28 does not expressly limit Sinclair‘s indemnity obligations to third-party claims. Interpreting Sinclair‘s indemnity obligations to include claims that Sinclair itself may bring against the CB&I Defendants comports with Article 28 because Sinclair is the party most likely to assert “claim[s], demand[s], cause[s] of action, liability, loss[es] or expense[s]” against the CB&I Defendants arising from “damage to or loss of the property of Sinclair” in relation to the EPC Contract. See App. at 18,260.
C. The Eggleston Order
Sinclair challenges the magistrate judge‘s Eggleston Order that denied Sinclair‘s and Mr. Eggleston‘s attempt to retract his deposition testimony. At his first deposition, Mr. Eggleston, Sinclair‘s former inspection supervisor at the Refinery, testified he knew in 2009 that FV-241 was made from carbon steel. He attempted to retract his testimony by submitting an addendum and errata sheets, and he explained his retractions in a second deposition. In the Eggleston Order, the magistrate judge struck these retractions under
After providing additional background, we reject ACE and the IVS Defendants’ arguments that we lack jurisdiction to review the Eggleston Order or that Sinclair waived its right to appeal the order by not objecting to it in district court. Reaching the merits, we hold that the magistrate judge did not abuse his discretion in striking Mr. Eggleston‘s retractions. We therefore affirm the Eggleston Order.
Resolution of this issue affects Sinclair‘s seventh claim alleging ACE and the IVS Defendants breached a duty to warn Sinclair about FV-241‘s carbon steel metallurgy and vulnerability to HTHA. We address the relevance of Mr. Eggleston‘s testimony to that claim later in this opinion.
1. Additional Factual and Procedural Background
On July 21, 2017, Mr. Eggleston testified about the damage assessment he performed after the 2009 fire at the Unit. App. at 6636. He testified that he performed Brinell hardness tests on FV-241, which was “involved in [the] heater” that caught on fire. Id. at 6644-45. A Brinell hardness test measures “the hardness of a material by pressing a hardened metal ball against the smooth material surface of the item being tested,” creating an indent on the material. Id. at 6581 (declaration of Dr. Michael E. Stevenson, expert for the IVS Defendants).
Mr. Eggleston explained that Brinell testing could be used to determine the strength of carbon steel, but not stainless steel. Id. at 6647-49; see id. at 6581 (Dr. Stevenson‘s declaration, explaining that for certain materials including carbon steel, Brinell testing can be used to determine material strength). He testified that he performed Brinell testing on FV-241 to determine whether it had been weakened by the fire because the valve was made from carbon steel, and that he would not have performed Brinell testing on it if it were made from stainless steel. Id. at 6647-49. Mr. Eggleston also identified several parts of FV-241 on which he performed Brinell testing, including on both flanges. Id. at 6646, 6661-62, 6667.22
In August 2017, Mr. Eggleston submitted an addendum and errata sheets to his deposition testimony. In the addendum, he stated that since his July 21, 2017 deposition,
In December 2017, Mr. Eggleston was deposed a second time. He testified that he had inspected FV-241 following his first deposition after Sinclair‘s counsel suggested he do so. Id. at 9164-65, 9166-67. He also explained the bases for his addendum and errata sheets. Id.
The IVS Defendants moved to strike Mr. Eggleston‘s addendum and errata sheets. ACE joined the motion. The parties submitted competing expert reports about whether FV-241 had indentations consistent with Brinell testing.
In the Eggleston Order, the magistrate judge granted this motion. The order permitted certain “technical” changes on Mr. Eggleston‘s errata sheets “relating to incorrect spelling, clarification, or changes where the reporter appears to have misunderstood Mr. Eggleston or made an error.” Id. at 16,085-86. But it struck the remainder of Mr. Eggleston‘s errata sheets and his addendum as sham testimony because they made material changes that contradicted his deposition testimony. Sinclair did not file an objection to the magistrate judge‘s ruling in the district court.
2. Reviewability of the Eggleston Order
We first address whether we can review the Eggleston Order.
ACE and the IVS Defendants rely on SEC v. Merrill Scott & Associates, Ltd., 600 F.3d 1262 (10th Cir. 2010), our first published opinion squarely holding that a party‘s failure to object to a magistrate judge‘s non-dispositive ruling under
In Niehaus v. Kansas Bar Association, 793 F.2d 1159 (10th Cir. 1986), we said a party‘s failure to object to a magistrate judge‘s non-dispositive ruling resulted in waiver.
If Niehaus was unclear about the consequences of failure to object, we resolved that ambiguity in other decisions preceding Merrill Scott & Associates. First, in Moore v. United States, 950 F.2d 656 (10th Cir. 1991), although the appellant sought review of a magistrate judge‘s findings and recommendations on a dispositive matter rather than a non-dispositive ruling, we said, citing Niehaus, “Although we plainly have jurisdiction over this appeal, we have adopted a firm waiver rule when a party fails to object to the findings and recommendations of the magistrate.” Id. at 659 (citations omitted); see
Breaking with the foregoing cases,28 Merrill Scott & Associates held that a party‘s failure to object to a magistrate judge‘s non-dispositive ruling under
On July 18, 2018, the district court entered a stay pending the resolution of numerous pending motions. The court “ORDER[ED] a stay in [the action] until [all pending motions] are resolved,” except “that the parties shall continue to fully brief all motions which have been filed . . . .” App. at 16,070. Sinclair could reasonably have inferred that the stay order prohibited it from filing objections to the Eggleston Order, which was entered on July 24, 2018. The 14-day window to object under
3. Whether the Eggleston Order was Error
Reaching the merits, we hold that the magistrate judge did not abuse his discretion in striking Mr. Eggleston‘s retractions.
a. Additional legal background
(e) Review by the Witness; Changes.
(1) Review; Statement of Changes. On request by the deponent or a party before the deposition is completed, the deponent must be allowed 30 days after being notified by the officer that the transcript or recording is available in which:
(A) to review the transcript or recording; and
(B) if there are changes in form or substance, to sign a statement listing the changes and the reasons for making them.
- “whether the [deponent] was cross-examined during his earlier testimony“;
- “whether the [deponent] had access to the pertinent evidence at the time of his earlier testimony or whether the [change to deposition testimony] was based on newly discovered evidence“; and
- “whether the earlier testimony reflects confusion which the [Rule 30(e) correction] attempts to explain.”
Id. (quoting Franks v. Nimmo, 796 F.2d 1230, 1237 (10th Cir. 1986)).
b. Analysis
Sinclair argues the magistrate judge erred by applying the Burns/Franks factors to decide whether to exclude Mr. Eggleston‘s errata sheets and addendum to his first deposition testimony. It contends the Burns/Franks factors apply only to party deponents
All three factors support exclusion of Mr. Eggleston‘s retractions. First, Sinclair‘s counsel was present at Mr. Eggleston‘s first deposition and had an opportunity to cross-examine him, but chose not to. Second, FV-241 was not newly discovered evidence. It was remanufactured and installed on the Unit in 2006. Mr. Eggleston inspected it in 2009 after the fire. Sinclair contacted Mr. Eggleston about a year before his first deposition and had ample opportunity to give Mr. Eggleston access to it. App. at 6659. Third, Mr. Eggleston did not exhibit confusion during his first deposition. Our review of the transcript shows that he understood the questions and answered them confidently with details. He exhibited sound recall.
Sinclair‘s arguments to the contrary are not convincing. First, it argues FV-241 was “newly discovered evidence” because it was new to Mr. Eggleston. But, as discussed above, FV-241 was not newly discovered. And FV-241 was not new to Mr.
Second, Sinclair argues FV-241 was not available to Mr. Eggleston before his first deposition because showing it to him was logistically challenging. But the record shows the opposite: FV-241 was available, but Sinclair made no effort to show it to Mr. Eggleston. In fact, shortly after Mr. Eggleston‘s first deposition on July 21, 2017, Sinclair suggested that Mr. Eggleston see FV-241. Id. at 9162-65. On or around August 26, 2017, he drove from Dumas, Texas to Denver to view FV-241, which indicates he could have viewed FV-241 before his first deposition. Id. at 9162-67.
Third, Sinclair argues Mr. Eggleston must have been confused during his first deposition because Dr. Cornelissen, its metallurgy expert, did not find Brinell testing marks on FV-241 consistent with Mr. Eggleston‘s testimony. We disagree. Sinclair does not identify a single passage of Mr. Eggleston‘s first deposition that indicates confusion. As noted above, nor have we.
* * * *
Considering the Burns/Franks factors, we see no abuse of discretion in the magistrate judge‘s decision to strike the addendum and portions of the errata sheets to Mr. Eggleston‘s first deposition that retracted his testimony. We therefore affirm the Eggleston Order. Mr. Eggleston is bound to his admission that he knew in 2009 that
D. Claims Against ACE and the IVS Defendants
We turn to Sinclair‘s claims against ACE and the IVS Defendants, which are the fourth through seventh claims in the SAC. They are:
- Breach of contract against ACE based on the Metallurgy Theory and OEM Specifications Theory;
- Negligence against ACE and the IVS Defendants based on the Metallurgy Theory and OEM Specifications Theory;
- Strict products liability against ACE and the IVS Defendants based on the Metallurgy Theory and OEM Specifications Theory; and
- Failure to warn against ACE and the IVS Defendants based on the Metallurgy Theory, and failure to warn that FirstVue could not verify that a valve was made from the correct metallurgy.
As we later explain, Sinclair conceded that if its claims under the Metallurgy Theory fail, its claims under the OEM Specifications Theory also fail. We thus address the claims based on the Metallurgy Theory and FirstVue‘s limitations before turning to the OEM Specifications Theory.
1. Claim 4 - Sinclair‘s Breach-of-Contract Claim Against ACE Based on the Metallurgy Theory
Sinclair‘s fourth claim alleged in part that ACE breached the ACE Contract because FV-241 was made from the incorrect metal. The district court granted summary judgment to ACE because Sinclair did not identify a provision of the ACE Contract that was breached based on ACE‘s making FV-241 from carbon steel instead of stainless steel. We affirm.
The district court determined the ACE Contract consisted of three documents, App. at 18,309-11: (1) ACE‘s proposal to Sinclair‘s Dick Edwards for ACE to inspect 68 valves and then repair or replace them as necessary, id. at 9528-31; (2) ACE‘s purchase order for ACE to inspect and repair 59 valves, id. at 9646; and (3) ACE‘s quote to Sinclair for FV-241, id. at 3340-42. The court also concluded the ACE Contract was unambiguous and thus should be interpreted without resort to extrinsic evidence. See id. at 18,594-95.
On appeal, no party disputes that the ACE Contract consists of the aforementioned three documents and is unambiguous. We therefore focus on these three documents without resort to extrinsic evidence. Sutherland, 273 P.3d at 1095 (no extrinsic evidence when interpreting unambiguous contracts) (citing Union Pac. Res. Co., 882 P.2d at 219-20).
No provision in the ACE Contract created a duty for ACE to determine whether FV-241‘s metallurgy was chemically appropriate for service in a hydrogen-rich environment and resistant to HTHA, and thus whether FV-241 was made from the right metal. ACE therefore did not breach the ACE Contract by providing a carbon steel valve to Sinclair.
Sinclair‘s arguments to the contrary are unpersuasive. Aplt. Br. at 62-65. First, it contends that ACE‘s proposal stated that FV-241 and other remanufactured valves would “be run through [Fisher FirstVue] to guarantee performance in the application specified.” Id. at 63. Sinclair argues this implies that ACE and the IVS Defendants would check FV-241‘s resistance to HTHA. In its brief, Sinclair inserted the bracketed phrase
Second, Sinclair points to language in ACE‘s proposal promising to “come to [Sinclair] with our best recommendation as to whether it will be more cost effective for [Sinclair] to go ahead and complete the repair . . . , rework or replace the trim . . . , or replace the valve with a newly remanufactured Encore valve . . . .” Id. at 9528. Sinclair argues the term “best recommendation” meant that ACE had to recommend a replacement valve with the correct metallurgy. But the term “best recommendation” is used in the context of whether repair, rework, or replacement of a valve is most cost-effective.
Third, as it tried to do in district court, id. at 18,594-95, Sinclair asks us to consider extrinsic evidence to interpret the ACE Contract despite conceding the contract is unambiguous, Aplt. Br. at 63-64. But Wyoming law bars us from considering extrinsic evidence when interpreting an unambiguous contract. Sutherland, 273 P.3d at 1095 (citing Union Pac. Res. Co., 882 P.2d at 219-20).
We agree with the district court that Sinclair failed to identify a contractual provision that ACE breached by providing a carbon steel valve. We thus affirm the district court‘s grant of summary judgment for ACE on Sinclair‘s fourth claim for breach of contract based on the Metallurgy Theory.34
2. Claims 5 and 6 - Sinclair‘s Negligence and Strict Products Liability Claims Against ACE and the IVS Defendants Based on the Metallurgy Theory
In the Omnibus Order, the district court granted summary judgment to ACE and the IVS Defendants on Sinclair‘s negligence and strict products liability claims that were based on the Metallurgy Theory. It reasoned that these claims required FV-241 to be defective, and that FV-241‘s metallurgy did not make it defective. Instead, FV-241 was the wrong product for its application. Applying Wyoming products liability law, we affirm.
a. Additional legal background
In Wyoming, “[t]he requirement of showing a defect is one element common to every products liability case, whether it is brought on a theory of negligence . . . [or] strict
The Wyoming Supreme Court has held that when a product is simply the “wrong” one for its application, it is not defective. In McLaughlin v. Michelin Tire Corp., it addressed whether Michelin tires installed on a mining company‘s Caterpillar scraper were defective or the wrong product for the application. 778 P.2d at 60-61. Cobre Tire (“Cobre“), a seller of Michelin tires, provided tires and tire maintenance for the mining company. Id. at 61-62. Cobre relied on Michelin‘s advice to choose tires for the scraper. Id. The tires caused the scraper to experience severe handling and control problems that eventually caused a bodily injury. Id. The court held the tires were not defective, but instead were the “wrong product” for the application. Id. at 64-65 (collecting decisions).
McLaughlin explained the proper claim against a seller or manufacturer that furnishes a wrong product is one for breach of the implied warranty of fitness for a particular purpose, not a products liability claim. If (1) a buyer relies on the “seller‘s [or manufacturer‘s] skill and judgment” to select a product for a particular purpose, (2) the seller or manufacturer knows about that reliance, and (3) “the product malfunctions when it is being used in the manner in which it was intended by the [buyer],” then the buyer may bring a claim for breach of the implied warranty of fitness for a particular purpose.
b. Analysis
Sinclair concedes it must show FV-241 was defective to prevail on its negligence and strict liability claims against ACE and the IVS Defendants. Aplt. Bt. at 69. It has not identified a defect, so we affirm.
As noted, the Wyoming Supreme Court‘s decision in Loredo clarified that “if a product is safe for normal use, it is not defective.” Loredo, 212 P.3d at 633 (citing Campbell, 970 P.2d at 392). In other words, FV-241 was not defective if the evidence showed it was safe for normal use.
ACE submitted evidence that FV-241 was safe for normal use. It points to deposition testimony by Dr. Cornelissen, Sinclair‘s metallurgy expert, suggesting that FV-241‘s metallurgy would have been acceptable if it had been placed into service outside a hydrogen-rich or corrosive environment, Aplee. ACE Br. at 33-34 (citing App. at 12,283), and to deposition testimony by Mr. Burns that about 90% of valves he handled at ACE were made from carbon steel, id. at 34 (citing App. at 3243). Meanwhile, Sinclair has made no effort to explain FV-241‘s normal use, let alone show it would be unsafe in normal use. The limited but uncontroverted evidence therefore shows that FV-241‘s metallurgy did not make it defective. Rather, it was the wrong product for its application in the Unit.
This reasoning is analogous to McLaughlin, in which the Wyoming Supreme Court noted that “[a] product is designed for specific uses, and if it is properly made but unsuitable for its intended use, its design is faulty.” 778 P.2d at 77. Here, Sinclair has not shown that ACE or the IVS Defendants designed FV-241 for specific use in a corrosive environment. Rather, ACE and the IVS Defendants intended FV-241 to have a certain mechanical strength to withstand certain temperature and pressure conditions without regard to whether it would carry hydrogen. Because Sinclair submitted no evidence that FV-241 would have failed outside of hydrogen service, the district court correctly held that it was not defective.
Sinclair‘s two key arguments to the contrary are not convincing. First, Sinclair urges us to apply an alternate definition of product defect found in Section 2(b) of the Restatement (Third) of Torts: Products Liability. But in 2009, the Wyoming Supreme Court had an opportunity to adopt Section 2(b) because the state district court had applied it, but chose not to do so. Loredo, 212 P.3d at 630-31. In 1998, the Wyoming Supreme Court briefly discussed Section 2(b), but did not adopt it. Campbell, 970 P.2d at 392 n.1. Because the Wyoming Supreme Court has declined to adopt Section 2(b) on two occasions, we do not apply it here.
Second, Sinclair argues that under the ACE Contract, it hired ACE and the IVS Defendants to make “best recommendations” and to “assist Sinclair with its special purpose.” Aplt. Br. at 70-71 (quoting App. at 18,330). But as we discussed earlier, Sinclair has not identified any provision of the ACE Contract that was breached by making FV-241 from carbon steel, and Sinclair uses the “best recommendations”
For these reasons, we agree with the district court that Sinclair has failed to show FV-241‘s carbon steel composition made it defective as opposed to the wrong product for its application. Because Sinclair‘s negligence and strict products liability claims depend on showing that FV-241 was defective and it has not done so, we affirm.
3. Claim 7 - Sinclair‘s Failure-to-Warn Claim Against ACE and the IVS Defendants
Sinclair‘s failure-to-warn claim against ACE and the IVS Defendants rested on their alleged breach of a duty to (a) warn that FV-241 was made from carbon steel and was vulnerable to HTHA (the Metallurgy Theory), and (b) warn that FirstVue could not verify the compatibility of a valve‘s metallurgy with chemical conditions. The district court rejected both claims in the Omnibus Order.
As for the Metallurgy Theory claim, we affirm because Sinclair knew before 2013 that FV-241 was made from carbon steel. No reasonable jury could find otherwise. As for the FirstVue claim, we affirm because Sinclair forfeited certain arguments in district court and waived them here by not arguing plain error.
a. Sinclair knew before 2013 that FV-241 was made from carbon steel
Sinclair knew before 2013 that FV-241 was made from carbon steel. This eliminated any duty ACE and the IVS Defendants may have had to warn Sinclair that FV-241 was made from carbon steel and thus vulnerable to HTHA. We thus affirm the district court‘s dismissal of Sinclair‘s failure-to-warn claim based on the Metallurgy Theory.
i. Additional legal background
Wyoming law recognizes that “if [a] product itself is not defective but may be unreasonably dangerous if it is used improperly, a plaintiff may show a ‘defect’ by establishing that the manufacturer failed to warn about dangers associated with the product.” Rohde v. Smiths Med., 165 P.3d 433, 441 (Wyo. 2007). Such a claim requires “determining whether a warning is necessary and/or whether the warnings provided were adequate.” Id. at 441. The plaintiff must also show that the product caused its injury and that a warning would have changed its behavior and prevented the injury. See Abraham v. Great W. Energy, LLC, 101 P.3d 446, 456 (Wyo. 2004) (citing Tune v. Synergy Gas Corp., 883 S.W. 2d 10, 14 (Mo. 1994)).
The duty to warn does not require a seller or manufacturer to warn a product user “of dangers of which the user is aware or of obvious dangers.” Parker v. Heasler Plumbing & Heating Co., 388 P.2d 516, 519 (Wyo. 1964); see Sherman v. Platte Cnty., 642 P.2d 787, 789-90 (Wyo. 1982) (applying this principle more recently in the premises liability context).
ii. Analysis
The district court found that Sinclair knew about the risks of HTHA at all relevant times.35 App. at 18,331. It thus concluded: “[I]f Sinclair knew that FV-241 was made from carbon steel [before 2013], then ACE and IVS Defendants had no duty to warn Sinclair that it was nonconforming.” Id. at 18,333. We agree.36 We further agree the evidence showed that Sinclair knew before 2013 that FV-241 was made from carbon steel.37
Second, when Sinclair received FV-241 from IVS in 2006, the valve‘s actuator tag, flanges, and valve body carried markings indicating it was made from carbon steel. Id. at 2827 (“Incident Investigation” document, indicating that FV-241‘s flange was labeled as carbon steel); id. at 17,666 (Sinclair‘s admission). Before the district court, Sinclair argued its employees who received FV-241 from IVS and turned it over to A&B for installation would not have known what the markings meant. Id. at 18,333 (citing Sinclair‘s argument, App. at 17,666). But as the district court observed in the Omnibus Reconsideration Order, id. at 18,602, Sinclair cited no evidence to support this argument, id. at 17,666.
Third, Mr. Eggleston testified he knew in 2009 that FV-241 was made from carbon steel. His recollection of other details about FV-241 reinforced this admission.
Sinclair‘s attempts to downplay this testimony fail. It contends that even though Mr. Eggleston testified his Brinell testing in 2009 would have left marks on four areas of FV-241, Dr. Cornelissen, Sinclair‘s metallurgy expert, found only one “definitive” Brinell testing mark when he examined FV-241 after the 2013 explosion and fire. Id. at 6646, 6667 (Eggleston testimony); id. at 9232, 9234 (Cornelissen testimony). But Dr. Cornelissen‘s testimony addressed whether Mr. Eggleston correctly performed Brinell testing.39 It did not directly address whether Mr. Eggleston knew FV-241 was made from carbon steel.
Further, Sinclair argues it can rely on Mr. Eggleston‘s second deposition, wherein he explained why he tried to retract his earlier testimony. Aplt. Br. at 77. But as the district court correctly held in the Omnibus Reconsideration Order, Mr. Eggleston‘s second deposition testimony is inadmissible for the same reason his Rule 30(e) changes are inadmissible. App. at 18,601-02.
Finally, Sinclair contends, without pointing to evidence, that Mr. Eggleston‘s testimony cannot be imputed to Sinclair. Aplt. Br. at 78. But Mr. Eggleston was Sinclair‘s inspection supervisor and responsible for inspecting the Unit after the 2009 fire. “[A] corporation is chargeable with the knowledge of its agents and employees acting within the scope of their authority.” United States ex rel. Polukoff v. St. Mark‘s Hosp., 895 F.3d 730, 745 n.9 (10th Cir. 2018) (quoting W. Diversified Servs., Inc. v. Hyundai Motor Am., Inc., 427 F.3d 1269, 1276 (10th Cir. 2005)); Grayson v. Williams, 256 F.2d 61, 66 (10th Cir. 1958) (“[A]dmissions made by an agent while acting in the scope of his employment and concerning the subject matter of his employment are binding on the principal.“); see
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b. Failure-to-warn claim based on FirstVue‘s limitations
In the Omnibus Order, the district court held that because Sinclair was not a user or consumer of FirstVue, it lacked standing to assert failure-to-warn claims about FirstVue. App. at 18,335-36. On appeal, Sinclair argues the court erred because ACE and the IVS Defendants owed a duty of care to all persons within the zone of risk. Aplt.
i. Legal standards
Under Wyoming law, one owes a duty of care to those in the zone of foreseeable risk. Glenn v. Union Pac. R. Co., 262 P.3d 177, 193-94 (Wyo. 2011) (collecting cases). But a manufacturer is strictly liable only to the consumers and users of its products. Ogle v. Caterpillar Tractor Co., 716 P.2d 334, 341-42 (Wyo. 1986) (expressly adopting Section 402A of the Restatement (Second) of Torts as Wyoming law). In general, the class of plaintiffs that may maintain a negligence claim is larger than the class that may sue for strict liability.
ii. Analysis
Sinclair argues the district court erred by holding that its failure-to-warn claim failed because it was not a consumer or user of FirstVue. It contends that because its failure-to-warn claim is a negligence claim, ACE and the IVS Defendants owed a duty of care to all those in the zone of foreseeable risk associated with FirstVue. But Sinclair forfeited this argument by failing to make it in district court.
We trace Sinclair‘s forfeiture to its imprecise pleading and briefing on summary judgment. In the SAC, it vaguely labeled its seventh claim for relief as “failure to warn.” App. at 1737. It did not explain whether this claim was for negligence or strict products liability. In their motion for summary judgment, the IVS Defendants understood that Sinclair‘s failure-to-warn claim was for strict products liability instead of negligence. They cited Section 402A of the Restatement (Second) of Torts, which concerns strict
Sinclair now insists that its failure-to-warn claim regarding FirstVue is a negligence claim and argues it has standing despite being a non-user and non-customer of FirstVue. Aplt. Br. at 79-80. But Sinclair forfeited that argument in district court and has waived it here by failing to argue that the district court plainly erred by failing to construe its claim as a negligence claim. See Richison v. Ernest Grp., Inc., 634 F.3d 1123, 1127-30 (10th Cir. 2011).
We therefore affirm the district court‘s grant of summary judgment to ACE and the IVS Defendants on Sinclair‘s failure-to-warn claim based on FirstVue‘s limitations.
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4. Sinclair‘s Remaining Claims Based on the OEM Specifications Theory
Sinclair‘s remaining claims are based on the OEM Specifications Theory.42 In the IVS Second MSJ Order, the district court accepted Sinclair‘s concession that FV-241‘s failure to meet Fisher‘s OEM specifications for wall thickness would not alone have caused FV-241‘s failure, App. at 18,848, because “the wall thickness issue only affected the timing of the failure,” id. at 18,676 (Sinclair‘s concession). In other words, Sinclair conceded that if its claims based on the Metallurgy Theory fail, its claims based on the OEM Specifications Theory also fail.
Based on this concession, the district court granted summary judgment to ACE and the IVS Defendants on Sinclair‘s remaining claims based on the OEM Specifications Theory. Id. at 18,848-51. On appeal, Sinclair provides no reason why it is not bound by its concession. Because we agree with the district court‘s conclusion that Sinclair‘s claims based on the Metallurgy Theory are not viable, we affirm the district court‘s grant of summary judgment on Sinclair‘s claims based on the OEM Specifications Theory.
III. CONCLUSION
Although our analysis diverges from the district court‘s in some respects, we affirm the orders dismissing or granting summary judgment on all of Sinclair‘s claims and granting summary judgment in favor of the CB&I Defendants’ indemnity counterclaim.
Notes
If the Legislature clearly states that a threshold limitation on a statute‘s scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue. But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.546 U.S. at 515-16 (citation and footnote omitted). Neither
There appears to be a circuit split on this issue. For example, the Second, Third, Sixth, Seventh, and Eleventh Circuits have treated a failure to object as non-jurisdictional waiver. Marcella v. Cap. Dist. Physicians’ Health Plan, Inc., 293 F.3d 42, 46-47 (2d Cir. 2002); Cont‘l Cas. Co. v. Dominick D‘Andrea, Inc., 150 F.3d 245, 251 n.9 (3d Cir. 1998); Allen v. Highlands Hosp. Corp., 545 F.3d 387, 406 (6th Cir. 2008); Hunt v. DaVita, Inc., 680 F.3d 775, 780 n.1 (7th Cir. 2012); Maynard v. Bd. of Regents of the Div. of Univs. of the Fla. Dep‘t of Educ., 342 F.3d 1281, 1286 (11th Cir. 2003). The D.C. Circuit—and perhaps the First Circuit—have held that the objection requirement is jurisdictional. CNPq—Conselho Nacional de Desenvolvimento Cientificoe Technologico v. Inter-Trade, Inc., 50 F.3d 56, 58-59 (D.C. Cir. 1995) (per curiam); see Pagano v. Frank, 983 F.2d 343, 346 (1st Cir. 1993). The Ninth Circuit has held that a failure to object results in forfeiture, not waiver. Simpson v. Lear Astronics Corp., 77 F.3d 1170, 1173-75 & n.1 (9th Cir. 1996).
The purpose of Rule 30(e) is obvious. Should the reporter make a substantive error, i.e., he reported “yes” but I said “no,” or a formal error, i.e., he reported the name to be “Lawrence Smith” but the proper name is “Laurence Smith,” then corrections by the deponent would be in order. The Rule cannot be interpreted to allow one to alter what was said under oath. If that were the case, one could merely answer the questions with no thought at all then return home and plan artful responses. Depositions differ from interrogatories in that regard. A deposition is not a take home examination.Greenway v. Int‘l Paper Co., 144 F.R.D. 322, 325 (W.D. La. 1992) (quoted with approval in Garcia, 299 F.3d at 1242 n.5, and BancFirst ex rel. Est. of M.J.H. v. Ford Motor Co., 422 F. App‘x 663, 666 (10th Cir. 2011) (unpublished)).