United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
F. ATLAS SENIOR UNITED STATES DISTRICT JUDGE.
the Court is Defendant Survitec Survival Products, Inc.'s
(“Survitec”) Motion to Dismiss Pursuant to
Federal Rule of Civil Procedure 12(b)(6) (“Motion to
Dismiss” or “Motion”) [Doc. # 5]. Plaintiff
Fire Protection Service, Inc. (“FPS”) responded,
Survitec replied. The Motion is ripe for decision. Based on
the parties' briefing, pertinent matters of record, and
relevant legal authority, the Court denies
Survitec's Motion to Dismiss.
factual background is drawn from the allegations in Plaintiff
FPS's Complaint. These allegations, for the purposes of the
Motion, are taken as true. See, e.g., Harrington
v. State Farm Fire & Cas. Co., 563 F.3d 141, 147
(5th Cir. 2009).
a Delaware corporation headquartered in Jacksonville,
Florida, is in the business of manufacturing marine safety
and survival equipment, including life rafts. FPS, a Texas
corporation headquartered in Houston, was a dealer and
servicer of Survitec's life rafts until Survitec
terminated their dealer arrangement in December
2017. After FPS's attempts to have Survitec
repurchase its life raft inventory failed, FPS initiated this
lawsuit in Texas state court on June 14, 2019.
asserts a single cause of action against Survitec for
violation of Texas's Fair Practices of Equipment
Manufacturers, Distributors, Wholesalers, and Dealers Act
(“Deal Protection Act” or the
“Act”). See Tex. Bus. & Com. Code
§ 57.001 et seq. FPS alleges Survitec violated
its duty under the Act to repurchase, after termination of
the parties' dealer agreement, all the life rafts and
parts FPS had purchased from Survitec. Survitec timely
removed based on diversity jurisdiction.
MOTION TO DISMISS STANDARD
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) is viewed with disfavor and is rarely granted.
Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir.
2011) (citing Harrington, 563 F.3d at 147). The
complaint must be liberally construed in favor of the
plaintiff, and all facts pleaded in the complaint must be
taken as true. Harrington, 563 F.3d at 147. The
complaint must, however, contain sufficient factual
allegations, as opposed to legal conclusions, to state a
claim for relief that is “plausible on its face.”
See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009);
Patrick v. Wal-Mart, Inc., 681 F.3d 614, 617 (5th
pleading rules call for “a short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). When there are
well-pleaded factual allegations, a court should presume they
are true, even if doubtful, and then determine whether they
plausibly give rise to an entitlement to relief.
Iqbal, 556 U.S. at 679. “A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Id. at 678. “A pleading that offers
‘labels and conclusions' or ‘a formulaic
recitation of the elements of a cause of action will not
do.'” Id. (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007)). The Court
“accept[s] all well-pleaded facts as true, viewing them
in the light most favorable to the plaintiff.”
Edionwe, 860 F.3d at 291 (quoting Gines v. D.R.
Horton, Inc., 699 F.3d 812, 816 (5th Cir. 2012)).
moves to dismiss FPS's Complaint for failure to state a
claim under the Deal Protection Act. The Act governs the
relationship of suppliers and dealers with respect to certain
“equipment, ” as defined by the Act. See
Tex. Bus. & Com. Code § 57.002(7). Survitec asserts
that the parties' dispute regarding the repurchase of
life rafts is not governed by the Dealer Protection Act
because life rafts do not qualify as “equipment”
within the meaning of Act.
The Dealer Protection Act
that the sale and rental of “agricultural,
construction, industrial, mining, outdoor power, forestry,
and lawn and garden equipment through” independent
dealers “vitally affect [Texas's economy], the
public interest, and the public welfare, ” the Texas
Legislature in 2011 enacted the Dealer Protection Act to
regulate “the business relationship between . . .
independent dealers and equipment suppliers.” Fair
Practices of Equipment Manufacturers, Distributors,
Wholesalers, and Dealers Act, 82nd Leg., R.S., ch. 1039,
§ 1, 2011 Tex. Sess. Law Serv. (codified at Tex. Bus.
& Com. Code § 57.001 et seq.). Under the
Act, “[a] supplier who refuses to repurchase any
inventory covered [by the Act] after termination or
discontinuation of the dealer agreement is liable to the
dealer for” 110 percent of the repurchase price,
freight charges, accrued interest, and attorney fees and
costs. See Tex. Bus. & Com. Code §
57.355(a). A “dealer agreement” is defined as