United States District Court, S.D. Texas, Houston Division
INDELPRO S.A. DE C.V., Plaintiff,
VALERO MARKETING AND SUPPLY COMPANY, Defendant.
MEMORANDUM AND OPINION
Rosenthal, Chief United States District Judge
S.A. de C.V. has sued Valero Marketing and Supply Company,
alleging that Valero supplied contaminated marine fuel to one
of its ships, the M/V Zoe Schulte, damaging her
engine and engine components. (Docket Entry No. 1). Indelpro
asserts state-law claims of contract breach, breach of
warranties, negligence, and product liability.
(Id.). Valero answered and filed a third-party
complaint against Trafigura Trading LLC. (Docket Entry No.
5). Valero alleged that Trafigura sold the contaminated fuel
that damaged the M/V Zoe Schulte to Valero, and
asserted state-law contract breach, negligence, breach of
warranties, products liability, and a violation of the Texas
Civil Practice and Remedies Code. (Id.). Trafigura
has moved for either a more definite statement of
Valero's third-party complaint, or to sever some of
Valero's third-party claims and to transfer those claims
to the Southern District of New York under forum-selection
clauses, and to dismiss the remaining third-party claim under
an arbitration clause. (Docket Entry Nos. 24-26).
the court ruled on those motions, Valero moved for leave to
amend its third-party complaint, to add factual allegations
and to assert a Rule 14(c) tender as to Trafigura. (Docket
Entry No. 39). Trafigura opposes this motion because of the
attempted Rule 14(c) tender. (Docket Entry No. 43).
on the pleadings, motions, record, and the applicable law,
the court grants in part and denies in part Valero's
motion for leave to file an amended third-party complaint.
The court denies the motion for leave to amend to add the
Rule 14(c) tender because this amendment would be futile. The
court otherwise grants Valero's motion for leave to
amend. The remaining motions will be addressed in a separate
order to be issued with the related motions pending before
this court in The National Shipping Company v.
Valero, 19-1096 (S.D. Tex. 2019).
reasons for the ruling in this Memorandum and Opinion are
explained in detail below.
a Mexican company, time-chartered the M/V Zoe
Schulte. (Docket Entry No. 1 at ¶¶ 4, 8). In
March 2018, Indelpro ordered over 600 metric tons of marine
fuel from Valero. (Id. at ¶ 14). Indelpro
received an order confirmation stating that the fuel would
meet industry “specification standards.”
(Id. at ¶ 16). Valero delivered the fuel that
month, but Indelpro did not use it immediately. (Id.
at ¶¶ 18, 20).
2018, Indelpro was using the fuel in the M/V Zoe
Schulte when the vessel “began experiencing
serious operational issues.” (Id. at ¶
21). Indelpro tested the fuel and discovered that it did not
meet industry standards or the “basic international
standard for marine fuel.” (Id. at
¶¶ 23-25). Indelpro alleges that as a result of
using the contaminated fuel, the M/V Schulte was
physically damaged and Indelpro's operations were
disrupted and delayed. (Id. at ¶¶ 27-30).
March 2019, Indelpro sued Valero in federal district court on
the basis of diversity jurisdiction under 28 U.S.C. §
1332, and, “as an independent basis for jurisdiction
over the subject matter of this action, ” admiralty and
maritime jurisdiction under 28 U.S.C. § 1333.
(Id. at ¶¶ 2- 3). Valero answered and
filed a third-party complaint against Trafigura Trading LLC
under Federal Rule of Civil Procedure 14(a). (Docket Entry
No. 5). Valero alleged that Trafigura supplied five fuel
shipments under five contracts between February and March
2018, and that it was Trafigura's fuel that damaged the
M/V Zoe Schulte. (Id. at ¶¶
10-29). Trafigura moved for either a more definite statement,
or to sever some of the claims against it and to transfer
them to the Southern District of New York under
forum-selection clauses, and to dismiss the remaining claim
under an arbitration clause. (Docket Entry Nos. 24-26).
Trafigura argued as to the more definite statement that
“Valero alleges that Trafigura delivered [fuel]
pursuant to five contracts, ” but “has not
identified the contracts, and Trafigura has located only
three relevant contracts.” (Docket Entry No. 26 at 2).
the court ruled on those motions, Valero moved for leave to
amend its third-party complaint, including to assert a Rule
14(c) tender against Trafigura. (Docket Entry No. 39).
Trafigura opposes this motion. (Docket Entry No. 43).
The Legal Standard for Leave to Amend
may amend its pleading once without seeking the court's
leave or the adverse party's consent before a responsive
pleading is served. Fed.R.Civ.P. 15(a). After a responsive
pleading is served, the party may amend only “with the
opposing party's written consent or the court's
leave.” Id. Although a court “should
freely give leave when justice so requires, ”
id., leave to amend “is not automatic, ”
Matagorda Ventures, Inc. v. Travelers Lloyds Ins.
Co., 203 F.Supp.2d 704, 718 (S.D. Tex. 2000) (citing
Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 598
(5th Cir. 1981)). A district court reviewing a Rule 15(a)
motion to amend pleadings may consider factors such as
“undue delay, bad faith or dilatory motive on the part
of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the
opposing party by virtue of the allowance of the amendment,
[and] futility of the amendment.” Rosenzweig v.
Azurix Corp., 332 F.3d 854, 864 (5th Cir. 2003) (quoting
Foman v. Davis, 371 U.S. 178, 182 (1962)). A
plaintiff should be denied leave to amend a complaint if
“the proposed change clearly is frivolous or advances a
claim or defense that is legally insufficient on its
face.” 5 Charles A. Wright & Arthur R. Miller,
Federal Practice and Procedure § 1216 (3d ed.
2019); see also Ayers v. Johnson, 247 Fed.Appx. 534,
535 (5th Cir. 2007) (“A district court acts within its
discretion when dismissing a motion to amend that is
frivolous or futile.”).
Trafigura's motions were fully briefed, but before the
court ruled on them, Valero moved for leave to file an
amended third-party complaint against Trafigura. (Docket
Entry No. 39). The proposed amended complaint cures the
deficiencies Trafigura identified in its motion for a more
definite statement. The amended third-party complaint alleges
that there were three contracts and identifies them, as well
as the shipments that contained the allegedly contaminated
fuel. (Docket Entry No. 39-1 at ¶¶ ...