Stansbury v. McCarty Corporation

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

LENNARD H. STANSBURY CIVIL ACTION

VERSUS NO. 21-1909

MCCARTY CORPORATION, ET AL. SECTION “B”(3)

ORDER AND REASONS

Before the Court are defendants Bertram C. Hopeman and Liberty

Mutual Insurance Company, as alleged insurer of Hopeman’s alleged

executive officers Albert Arendt Hopeman, Jr., Bertram C. Hopeman,

Charles Johnson, and Kenneth Wood’s motion to dismiss for failure

to state a claim (Rec. Doc. 158), plaintiff’s response in

opposition (Rec. Doc. 167), and defendants’ reply in support of

their motion to dismiss (Rec. Doc. 172).

For the reasons discussed below,

IT IS ORDERED that defendants’ motion to dismiss pursuant to

Rule 12(b)(6) (Rec. Doc. 158) is GRANTED, dismissing plaintiff’s

claims against Bertram C. Hopeman and Liberty Mutual Insurance

Company, as the alleged insurer of Hopeman Brothers’s alleged

executive officers Albert Arendt Hopeman, Jr., Bertram C. Hopeman,

Charles Johnson, and Kenneth Wood, unless no later than July

8, 2022, plaintiff files an amended complaint correcting

deficiencies noted below.

I. FACTS AND PROCEDURAL HISTORY

Plaintiff Lennard H. Stansbury alleges exposure to asbestos

when he worked at various industrial and marine jobsites in the

greater New Orleans, Louisiana area from approximately 1966 to the

late 1970s. The jobsites included Avondale Shipyard and Dixie

Machine, Welding & Metal Works, Inc. Rec. Doc. 7-1 at 3; Rec. Doc.

1-1 at 2; Rec. Doc. 1-2 at 24. While plaintiff was an employee at

Avondale, defendant Hopeman Brothers, Inc. was a seller, user,

distributor, and/or supplier to Avondale Shipyard of asbestos-

containing products known as marinite/micarta “sandwich” boards.

Rec. Doc. 129 at 23. Plaintiff alleges that he was exposed to

asbestos fibers generated by Hopeman Brothers employees who were

cutting and manipulating Marinite/Micarta asbestos sandwich boards

while at Avondale. Id.; see also Rec. Doc. 167 at 3. Plaintiff

currently suffers from mesothelioma which he attributes to his

occupational exposure to asbestos. Rec. Doc. 7-1 at 3.

On November 20, 2020, plaintiff filed suit in state court

alleging negligence, product liability, and tort liability related

to asbestos exposure. Rec. Doc. 1-1 at 4. Employers Insurance

Company of Wausau filed a third-party demand on August 24, 2021,

naming Huntington Ingalls Incorporated (f/k/a Northrop Grumman

Ship Systems, Inc., f/k/a Avondale Industries, Inc.)

(“Huntington”) as a third-party defendant. Rec. Doc. 1-4 at 19.

Huntington then filed a notice of removal on October 19, 2021.

Rec. Doc. 1. Plaintiff subsequently filed a motion to remand (Rec.

Doc. 7), which was denied by this Court on January 6, 2022. Rec.

Doc. 98. On March 8, 2022, plaintiff filed a fourth amended

complaint. Rec. Doc. 129. Defendants Bertram C. Hopeman and Liberty

Mutual Insurance Company, as the alleged insurer of alleged

executive officers Albert Arendt Hopeman, Jr., Bertram C. Hopeman,

Charles Johnson, and Kenneth Wood (“Executive Officers”), filed

the instant motion to dismiss for failure to state a claim on May

5, 2022. Rec. Doc. 158.

II. LAW AND ANALYSIS

A. Rule 12(b)(6) Standard

Rule 12(b)(6) of the Federal Rules of Civil Procedure allows

a party to move for dismissal of a complaint for failure to state

a claim upon which relief can be granted. To survive a motion to

dismiss under Rule 12(b)(6), a plaintiff’s complaint “must contain

‘enough facts to state a claim to relief that is plausible on its

face.’” Varela v. Gonzales, 773 F.3d 704, 707 (5th Cir. 2014)

(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In

other words, a plaintiff’s “[f]actual allegations must be enough

to raise a right to relief above the speculative level.” Twombly,

550 U.S. at 555. “A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(citing Twombly, 556 U.S. at 556).

When deciding whether a plaintiff has met its burden, a court

“accept[s] all well-pleaded factual allegations as true and

interpret[s] the complaint in the light most favorable to the

plaintiff, but ‘[t]hreadbare recitals of the elements of a cause

of action, supported by mere conclusory statements’ cannot

establish facial plausibility.” Snow Ingredients, Inc. v.

SnoWizard, Inc., 833 F.3d 512, 520 (5th Cir. 2016) (quoting Iqbal,

556 U.S. at 678) (some internal citations and quotation marks

omitted). Plaintiffs must “nudge[] their claims across the line

from conceivable to plausible.” Twombly, 550 U.S. at 570.

B. Executive Officer Liability

Generally, Louisiana law does not provide third parties with

a cause of action against directors and officers for negligence.

See La. World Exposition v. Fed. Ins. Co., 858 F.2d 233, 239 (5th

Cir. 1988) (quoting Unimobil 84, Inc. v. Spurney, 797 F.2d 214,

215 (5th Cir. 1986)); see also Manning v. United Med. Corp. of New

Orleans, 2004-0035, p. 5-6 (La. App. 4 Cir. 4/20/05); 902 So. 2d

406, 410 (quoting Korson v. Indep. Mall I, Ltd., 595 So. 2d 1174,

1178 (La. App. 5th Cir. 1992)) (“[T]he United States Fifth Circuit

has reaffirmed that Louisiana law does not provide third parties

with a cause of action against directors and officers for

negligence.”). However, in Canter v. Koehring Co., the Louisiana

Supreme Court established an exception to this rule. See 283 So.

2d 716, 721 (La. 1973), superseded by statute on other grounds as

stated in Walls v. Am. Optical Corp., 740 So.2d 1262, 1265 (La.

1999); Rolls on behalf of A.R. v. Packaging Corp. of Am. Inc., 34

F.4th 431, 437-438 (5th Cir. 2022) (applying Canter to determine

whether a management-level employee can be held personally liable

for a plaintiff’s injury).

A plaintiff can hold a director or officer personally liable

for an injury when the following four elements are met:

(1) the employer owed a duty of care to the third person,

breach of which caused the damage for which recovery is

sought; (2) that duty was delegated by the employer to

the defendant; (3) the defendant employee breached his

duty through personal (not technical or vicarious)

fault; and (4) the employee had a personal duty toward

the injured third party, the breach of which

specifically caused the third party’s damages . . . [and]

personal liability [is not] imposed upon the employee

simply because of his general administrative

responsibility for some function of employment.

Kling Realty Co., Inc. v. Chevron USA, Inc., 575 F.3d 510, 514

(5th Cir. 2009) (citing Canter, 283 So. 2d at 721); see also Rolls,

34 F.4th at 437-438. Canter liability to third persons for the

negligence of corporate officers and employees may only be imposed

for bodily injury claims. Kling, 575 F.3d at 515 (citing Unimobil,

797 F.2d at 217; Ford v. Elsbury, 32 F.3d 931, 935-36 (5th Cir.

1994)).

C. Whether Canter Applies

In defendants’ motion to dismiss, they rely on Canter as

“[t]he seminal authority in Louisiana for imposition of executive

officer liability.” Rec. Doc. 158-1 at 5. However, in their reply

they seem to suggest that “executive officer liability under Canter

was superseded by Act No. 147 when the 1976 legislature amended

La. R.S. 23:1032 to extend employer tort immunity to persons

previously considered third parties under the act.” Rec. Doc. 172

at 2.1 In making this suggestion, defendants nevertheless

misunderstand the effect of the 1976 amendment on Louisiana Revised

Statute 23:1032.

Defendants are correct that prior to the 1976 amendment,

§ 23:1032 provided that “workers’ compensation benefits were the

exclusive remedy of an employee, his personal representatives,

dependents or relations, against an employer for injuries arising

out of and in the course of his employment.” Walls, 740 So. 2d at

1265; see also Rec. Doc. 172 at 2. The law did not “expressly

confer immunity from tort suits on any person other than the

employer;” consequently, Canter held that although barred from

seeking recovery from their employer, injured workers were

“allowed to seek recovery in tort from negligent executive officers

and their liability insurers.” Walls, 740 So. 2d at 1265. Not long

1 Defendants last section of their reply entitled, “notwithstanding the above,

plaintiff still fails to satisfy the Canter factors,” also seems to indicate

that defendants believe Canter should not apply here. See Rec. Doc. 172 at 5.

after this ruling, the 1976 Louisiana legislature amended

§ 23:1032 to extend the employer’s tort immunity to “persons

previously considered third parties under the Act,” including “any

officer, director, stockholder, partner, or employee of such

employer or principal.” See id.; see also La. Stat. Ann. § 23:1032

(2022). Nevertheless, contrary to defendants’ understanding, this

amendment did not completely foreclose Canter’s application.

Long after the 1976 amendment to § 23:1032, the Fifth Circuit

affirmed that “[i]n Louisiana, the legal framework with which to

conduct [an executive officer liability] examination is provided

by Canter.” See In re 1994 Exxon Chem. Fire, 558 F.3d 378, 385

(5th Cir. 2009). The Court specified that “[i]n Canter, the Supreme

Court of Louisiana approved a four-part test to determine whether

individual liability may be established against an employee for

breach of a duty imposed solely by reason of his employment or

agency relationship.” Id.; see also Rolls, 34 F.4th at 437-438.

“In cases where the suit is brought by a non-employee third-party,

as here, executive officer liability for negligence has not been

abrogated.” Kemp v. CTL Distrib., Inc., 440 F. App’x 240, 244 n.1

(5th Cir. 2011) (citing In re 1994 Exxon, 558 F.3d at 386)

(“Canter’s four-part test is used to determine whether an employee

is individually liable to third persons.

Here, plaintiff sues Hopeman Brothers’s executive officers

for negligence. See Rec. Doc. 129 at 1-2, 23-26. Plaintiff,

however, was never a Hopeman employee. See id. at 23-26 (alleging

that plaintiff was exposed to asbestos from Hopeman’s products and

employees while employed by Huntington). Consequently, when

plaintiff files suit against the Executive Officers, he does so as

a “non-employee third party,” not a Hopeman Brothers co-employee.

See Kemp, 440 F. App’x at 240. Meaning, plaintiff’s quest to hold

the Executive Officers liable for negligence “has not been

abrogated.” Id.; see also In re 1994 Exxon, 558 F.3d 378 (applying

Canter when non-Exxon employees sued a group of Exxon employees

for negligence related to a chemical fire); Ford, 32 F.3d at 936

(applying Canter when plaintiffs sued an Arcadian employee for his

role in an explosion that occurred at a fertilizer plant owned by

Arcadian). Thus, to the extent that defendants argue executive

officer liability under Canter was fully superseded by the 1976

amendment to § 23:1032, the Court finds the argument wanting, and

thus, applies Canter to determine whether plaintiff alleged

executive officer liability in the instant matter. See Rec. Doc.

172 at 2-3.

D. Whether Plaintiff Fails to State a Claim Against the

Executive Officers

1. Interpreting Canter

After determining that Canter applies here, the Court must

now decide which party applied Canter correctly. See generally

Rec. Docs. 158-1, 167. In defendants’ motion to dismiss, they argue

that if Canter applies, then plaintiff fails to satisfy the second

element of the Canter framework, which dictates that the duty of

care owed to the third party must be “delegated by the principal

or employer to the defendant.” Rec. Doc. 158-1 at 5, 9 (quoting

Canter, 283 So. 2d at 721). Defendants explain that “the Amended

Complaint are devoid of any reference to a duty delegated by

Plaintiff’s employer, Avondale, to Hopeman’s alleged executive

officers, an essential element of executive officer liability

under Louisiana law.” Id. at 9. Plaintiff, on the other hand,

implores the Court to interpret the second prong as requiring a

“look to the delegation of duty between defendant Hopeman and

Hopeman’s [Executive Officers]—not Avondale.” Rec. Doc. 167 at 9.

According to plaintiff, “[i]n a third-party claim where a non-

employee alleges liability on the part of a defendant’s executive

officers, the focus must be on the relationship, and the acts or

omissions, between the defendant tortfeasor and its executive

officers.” Id. After careful consideration, the Court finds that

plaintiff provides the correct interpretation.

In Canter, plaintiff was employed on a construction contract

between his employer, the Industrial Construction Company, and

Pittsburgh Plate Glass Company to build a chemical plant. 283 So.

2d at 723. After dying from a workplace accident while helping to

build the plant, plaintiff’s widow brought a wrongful death action

against five Pittsburgh Plate engineers and their insurer. Id. In

determining whether plaintiff had a valid claim against

Pittsburgh’s employees, the Louisiana Supreme Court did not

evaluate whether plaintiff’s employer, the Industrial Construction

Company, had delegated a duty of care to the Pittsburgh Plate

engineers. See id. Instead, the court examined whether Pittsburgh

Plate, the corporate entity, had delegated the duty to the

engineers, employees of the corporation. See id. (finding that

Pittsburgh Plate “had delegated to these engineers whatever

responsibilities it had for furnishing engineering specifications,

services, and instructions under its contract with Industrial”).

Thus here, the Court need not analyze whether plaintiff

alleges his employer, Avondale, delegated a duty of care to Hopeman

Brothers’s executive officers. See id. To assess whether the

Executive Officers, not only Hopeman Brothers, are liable for

plaintiff’s injuries, the Court must determine whether plaintiff

alleged that Hopeman Brothers delegated a duty of care to its

Executive Officers—not Avondale. See id; see also Kemp, 440 F.

App’x at 245 (stating that plaintiffs must prove “CTL delegated

its duty to McLelland” when plaintiffs’ deceased husband/father

worked for Delta Trailer, Inc., not CTL, and McLelland, was the

CTL employee who plaintiff sued); Cambre v. Union Carbide Corp.,

No. 21-1067, 2022 WL 671655, at *1, 3 (E.D. La. Mar. 7, 2022)

(finding that “Dow and Union Carbide did not, as required under

Canter, delegate relevant safety duties to the employee

defendants” when non-employee plaintiffs sued Dow and Union

Carbide employees); Wright v. ANR Pipeline Co., 652 F. App’x 268,

270 (5th Cir. 2016) (per curiam) (finding non-employee plaintiffs

did not establish that pipeline companies delegated a duty of care

to Lucky, a pipeline company employee), vacating Ayers v. ANR

Pipeline Co., No. 10-925, 2011 WL 13359147 (W.D. La. June 4,

2011).2

2. Whether Plaintiff Alleged Facts Sufficient to State a Claim

Although the Court finds plaintiff interpreted Canter

correctly, it does not necessarily follow that plaintiff stated a

valid claim for executive officer liability. The Court must find

that plaintiff alleged Hopeman Brothers owed a duty of care to

plaintiff, that Hopeman Brothers delegated that duty to the

Executive Officers, that the Executive Officers breached that duty

through personal fault, and that the Executive Officers had a

personal duty toward plaintiff, and personal liability is not being

imposed simply because of the Executive Officers’ general

administrative responsibility. See Rolls, 34 F.4th at 437-438

(citing Canter, 283 So. 2d at 721). Defendants mainly argue that

plaintiff fails to allege that Hopeman Brothers delegated a duty

2 Because the Court finds that the relevant inquiry is not whether Avondale

delegated a duty of care to the Executive Officers, but rather whether Hopeman

Brothers delegated this duty, defendants’ arguments regarding whether Avondale

“had a non-delegable duty to provide and maintain a safe workplace safe from

asbestos exposure” are irrelevant and need not be addressed by the Court. See

Rec. Doc. 158-1 at 7-9; Rec. Doc. 167 at 5. Moreover, defendants seem to concede

that Hopeman Brothers did have a duty toward plaintiff. See Rec. Doc. 172 at 3.

of care to the Executive Officers. See Rec. Doc. 158-1 at 7-10;

Rec. Doc. 172 at 5. However, the Court must establish that

plaintiff pleaded all the Canter elements to find a cause of action

for executive officer liability. See Rolls, F. 4th at 437.

First, plaintiff did allege that Hopeman Brothers owed him a

duty of care. See Rec. Doc. 129 at 23. In his complaint, plaintiff

states, “Hopeman Brothers, Inc. negligently, recklessly, willfully

and/or because of gross and wanton negligence or fault, failed to

properly discharge their duties to the Complainant regarding the

asbestos products known as marinite/micarta “sandwich” boards,

sold, distributed, supplied and/or used by Hopeman Brothers, Inc.

at Avondale Shipyard.” Id.; see also id. at 16-17 (alleging that

defendants had a duty of care to plaintiff). He then describes

nine different ways that Hopeman Brothers failed to discharge their

duties to plaintiff. Id. at 23-24. Moreover, defendants

essentially concede in their reply memorandum that plaintiff has

a valid claim against Hopeman Brothers, implying that Hopeman

Brothers indeed had a duty toward plaintiff. See Rec. Doc. 172 at

3 (acknowledging that Hopeman Brothers can face liability for

injuries it caused to plaintiff). Accordingly, plaintiff has

alleged that Hopeman Brothers owes a duty of care to plaintiff,

the breach of which has caused the damage for which recovery is

sought. See Ford, 32 F.3d at 936 (citing Canter, 283 So. 2d at

721).

Regarding Canter’s second prong, plaintiff claims he alleges

that Hopeman Brothers delegated a duty of care to the Executive

Officers. See Rec. Doc. 167 at 11. In plaintiff’s complaint he

specifically states:

Albert Arendt Hopeman Jr., Bertram C. Hopeman, Charles

Johnson[,] and Kenneth Wood were Executive Officers of

Hopeman Brothers, Inc. (or its legal predecessors) with

the specific responsibility for the health and safety of

Complainant and his fellow employees during the time he

were exposed to substances which resulted in

Complainant’s mesothelioma and other ill effects related

thereto.

Rec. Doc. 129 at 24. Plaintiff argues that this allegation

represents “a specific delegation of responsibility to protect him

from the dangers of asbestos that Hopeman was negligently,

recklessly, and willfully creating.” Rec. Doc. 167 at 11. However,

rather than providing factual allegations, plaintiff merely offers

a conclusory statement. See Iqbal, 556 U.S. at 678 (“Threadbare

recitals of the elements of a cause of action, supported by mere

conclusory statements, do not suffice.”). Other than this one

allegation, plaintiff does not deliver any facts to support the

notion that Hopeman Brothers indeed delegated its duty of care to

the Executive Officers. See Rec. Doc. 129 at 23-26. Thus, plaintiff

does not seem to satisfy the second element of the Canter

framework.

Nevertheless, even if the Court were to assume that plaintiff

alleged a duty to delegate to the Executive Officers, plaintiff

has also failed to satisfy the third and fourth elements of the

Canter framework. See Rec. Doc. 158-1 at 10. The third prong

specifically requires that plaintiff allege the Executive Officers

“bear[] personal blame for” plaintiff’s injuries. Rolls, 34 F.4th

at 438. Furthermore, “for personal liability to attach under

Canter, the employee defendant must have had some personal contact

with and responsibility toward the injured plaintiff.” Cambre,

2022 WL 671655, at *4 (citing Kemp, 440 F. App’x at 246; Esco v.

Smith, 468 So. 2d 1169 (La. 1985)). Additionally, “[w]hether the

[executive officer] was aware or should have been aware of a risk

of harm and nevertheless failed to respond to the risk in the

manner in which a reasonably prudent [executive officer] would

respond in the same or similar circumstances” is a key issue in

determining executive officer liability. Kemp, 440 F. App’x at 246

(quoting Ford, 32 F.3d at 936). An executive officer’s “knowledge

of the dangers present could give rise to the personal duty

contemplated in Canter.” Cambre, 2022 WL 671655, at *5 (quoting

Ford, 32 F.3d at 936).

In his complaint, plaintiff does allege that the Executive

Officers “knew that there were specific engineering and industrial

hygiene procedures which should have been employed by Hopeman

Brothers, Inc.’s employees to reduce exposures, knew that those

exposed to asbestos on the job could bring home asbestos on their

clothes and thereby injuriously exposed those in the household.”

Rec. Doc. 129 at 25. Plaintiff claims that the Executive Officers

“consciously and intentionally chose not to inform Complainant of

this information or implement any meaningful safety precautions.”

Id. However, these generalized claims fall short of alleging that

the Executive Officers had actual knowledge of a discrete, imminent

risk, which ultimately led to plaintiff’s injuries. See Ford, 32

F.3d at 939 (finding Canter liability when employees testified

that they had complained of safety issues to management, management

refused to act, and management said “[s]ometimes you have to

overlook safety to get the job done”); Ellis v. Evonik Corp., No.

21-1089, 2021 WL 4862146, at *6 (E.D. La. Oct. 19, 2021) (finding

that a claim of “actual knowledge” of health risks “because [the

employees’] respective roles at the facility required them to be

aware of the health effects . . . which were widely known in their

industry to cause cancer” was “speculative” and “falls far short

of sufficiently alleging that these four employees had actual

knowledge of a particular health risk”). Importantly, plaintiff

never alleges that the Executive Officers had “some personal

contact with and responsibility toward the injured plaintiff,”

which Canter requires. See Kemp, 440 F. App’x at 246 (quoting Esco,

468 So. 2d at 1175) (“[T]he Louisiana Supreme Court has explained

that in order for personal liability to attach under Canter, ‘that

person must have some personal contact with and responsibility

towards the injured employee.’”).

Plaintiff does detail that there were reports and protocols

that could have alerted defendants of the need to mitigate health

risks associated with asbestos-containing products. Rec. Doc. 129

at 6-17. Additionally, plaintiff alleges that “Defendants were or

should have been aware of the deadly danger of asbestos dust to

workers using asbestos containing products or working around

others who were using asbestos containing products.” Id. at 6.

Nevertheless, plaintiff does not allege facts demonstrating

defendants “bear[] personal blame for” plaintiff’s injuries. See

generally Rec. Doc. 129; see also Rolls, 34 F.4th at 438.

Accordingly, plaintiff has failed to state a claim for executive

officer liability, and this claim must be dismissed, unless

plaintiff effectively cures noted factual deficiencies in an

amended complaint no later than July 8, 2022.3

New Orleans, Louisiana this 15th day of June, 2022

___________________________________

SENIOR UNITED STATES DISTRICT JUDGE

3 Defendants also move to strike the exhibits attached to plaintiff’s opposition

memorandum, claiming that the Court may only rely on the Complaint in denying

a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Rec. Doc.

172 at 1-2. When considering a motion to dismiss under Rule 12(b)(6), the Court

“must limit itself to the contents of the pleadings, including attachments

thereto.” Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir.

2000) (citing Fed. R. Civ. P. 12(b)(6)). However, a district court may consider

documents “attached to the motion to dismiss” when the documents “are referred

to in the plaintiff’s complaint and are central to the plaintiff’s claim.”

Scanlan v. Tex. A&M Univ., 343 F.3d 533, 536 (5th Cir. 2003). The exhibits

attached to plaintiff’s opposition are neither referred to in plaintiff’s

complaint nor do they seem central to plaintiff’s claim that the Executive

Officers are liable for plaintiff’s injuries. See generally Rec. Doc. 129.

Accordingly, the Court does not rely on these exhibits in determining that

plaintiff failed to state a claim of executive officer liability.