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Reuss v. East Coast Warehouse & Distribution Corp.

United States District Court, D. New Jersey

December 6, 2017




         I. Introduction

         This matter comes before the Court on the Defendant, East Coast Warehouse and Distribution Corp.'s (“East Coast Warehouse”) motion for leave to file a Third-Party Complaint against Aldi, Inc. (“Aldi”) [D.E. 50]. The Court has considered the motion, opposition, reply, and applicable law.[1] Pursuant to Federal Rule of Civil Procedure 78, the Undersigned did not hear oral argument and has considered this matter on the papers. For the reasons below, the Court will deny Defendant's motion.

         II. Background

         This litigation arises out of alleged damage caused to jars of hazelnut spread (the “Cargo”) produced by Plaintiff, Wilhelm Reuss GmbH & Co KG, Lebensmittel Werk (“Wilhelm”), and shipped from Hamburg, Germany to East Coast Warehouse's facility. See Complaint, D.E. 1, at ¶ 1. Plaintiff Wilhelm is a manufacturer of chocolate hazelnut spreads, chocolate fillings and desserts, and produced the Cargo in question. Id. at ¶ 3. Wilhelm's customers included Kruger North America, Inc. (“Kruger”). In October 2013, Kruger hired Defendant East Coast Warehouse to store the Cargo being shipped from Germany in a warehouse located in Elizabeth, New Jersey. Id. at ¶ 11.

         Plaintiffs allege that the Cargo was “in good order and condition” when it was shipped from Germany. Id. at ¶ 13. However, Plaintiffs contend that the Cargo became infested with mice while being stored in East Coast Warehouse's facility, rendering the Cargo “unfit for human consumption.” Id. at ¶ 15. Plaintiffs Wilhelm, Kruger, and Gaede & Glauerdt Assecuradeur GmbH & Co. KG (“Gaede”) brought this action against East Coast Warehouse, alleging breach of a bailment contract and damages sustained to the Cargo. See generally, Complaint, D.E. 1.

         East Coast Warehouse now seeks to file a Third-Party Complaint against Aldi for their alleged destruction of the Cargo in its possession. See Proposed Third-Party Complaint, D.E. 50-2. In the proposed Third-Party Complaint, East Coast Warehouse alleges that Aldi entered into an agreement with Kruger and/or Wilhelm to purchase a portion of the Cargo for resale. Id. at ¶ 9. From September to December, 2014, 465, 192 jars of the Cargo were shipped from the East Coast Warehouse facility to twelve different warehouses that Aldi owns throughout the United States. Id. at ¶ 10. According to the proposed Third-Party Complaint, “[o]n or about January 12, 2015, Kruger informed [East Coast Warehouse] that Aldi reported alleged contamination on some part of the Cargo.” Id. at ¶ 11. After reporting the alleged contamination, East Coast Warehouse claims that Aldi and Kruger discussed the Cargo, East Coast Warehouse's involvement, and “Plaintiffs' actual and/or potential claim” against East Coast Warehouse. Id. at ¶ 12. East Coast Warehouse alleges that, despite having “actual and/or constructive knowledge” of an actual or potential dispute between Plaintiffs and East Coast Warehouse, “on or about January 22, 2015, Aldi destroyed or arranged for the destruction of all 177, 629 jars of the Cargo in its possession. . .” Id. at ¶ 19. East Coast Warehouse's Proposed Third-Party Complaint contains one count for “negligent destruction of evidence.” Id. at ¶¶ 21-28.

         III. Discussion

         Federal Rule of Civil Procedure 14(a) governs motions for leave to file third-party complaints. Rule 14(a)(1) states that:

A defending party may, as third-party plaintiff, serve a summons and complaint to a nonparty who is or may be liable to it for all or part of the claim against it. But the third-party plaintiff must, by motion, obtain the court's leave if it files the third-party complaint more than 14 days after serving its original answer.

         Here, East Coast Warehouse filed its Answer on October 27, 2016 [D.E. 21] and filed this motion on August 22, 2017 [D.E. 50], and therefore past the 14 day deadline.

         The decision to grant leave to file a third-party complaint is left with the sound discretion of the court. See Somportex Ltd. v. Philadelphia Chewing Gum Corp., 453 F.2d 435, 439 (3d Cir. 1971), cert. denied, 405 U.S. 1017 (1972). However, “[a] third-party claim may be asserted under Rule 14(a) only when the third-party's liability is in some way dependent on the outcome of the main claim or when the third-party is secondarily liable to defendant.” F.D.I.C. v. Bathgate, 27 F.3d 850, 873 (3d Cir. 1994). While a third-party claim does not need to be based on the same theory as the main claim, third-party claims must be brought under some theory of secondary liability such as indemnification, contribution, or some other theory of derivative liability recognized by relevant substantive law. See Toberman v. Copas, 800 F.Supp. 1239, 1242 (M.D. Pa. 1992). Accordingly, “[c]ourts have stringently followed the rule that a third-party complaint may not set forth a claim of the third party defendant's liability to the plaintiff” and it is clear that a “theory that another party is the correct defendant is not appropriate for a third party complaint.” Slater v. Skyhawk Transportation, Inc., 187 F.R.D. 185, 203 (D.N.J. 1999) (quoting Toberman at 1242). “A third-party complaint that does not make a facial showing of secondary liability will not be entertained by the court.” Ronson v. Talesnick, 33 F.Supp.2d 347, 358 (D.N.J. 1999) (superseded on other grounds by statute). Importantly, a Third-Party Complaint is only proper under R. 14(a) when a right to relief exists under substantive law. East Coast Warehouse asserts a claim of “negligent destruction of evidence” against Aldi because Aldi “knew or should have known Plaintiffs had an actual and/or potential legal claim against [East Coast Warehouse].” Proposed Third-Party Complaint, D.E. 50-2, at ¶ 22. Therefore, this Court first must consider whether New Jersey law recognizes a right to relief for negligent destruction of evidence, also known as negligent spoliation, by a third party.

         East Coast Warehouse argues that “[u]nder New Jersey law, a ‘defendant who has been deprived of the ability to defend an action brought by a plaintiff because a third party has destroyed evidence' has a cause of action for damages against the third party.” Movant's Brief, D.E. 50-1, at 8 (citing Hewitt v. Allen Canning Co., 321 N.J.Super. 178, 184 (App. Div. 1999)). East Coast Warehouse contends that if it is somehow found liable to Plaintiffs, it “likely can establish that Aldi negligently destroyed materially necessary evidence which negatively impacted [East Coast Warehouse's] ability to defend itself against Plaintiffs' claims.” Movant's Br., D.E. 50-1, at 8. East Coast Warehouse states that Aldi was “keenly aware of an actual and/or potential dispute between Plaintiffs and [East Coast Warehouse], ” pointing to the fact that Aldi first notified Kruger of the alleged contamination, then discussed East Coast Warehouse's involvement with Kruger, and finally, sent an inspector to East Coast Warehouse's facility in Elizabeth to take pictures. Id. at 9. East Coast Warehouse argues that Aldi's destruction of a portion of the Cargo “handcuffs” East Coast Warehouse's defense because it is “unware of the scope, size or extent of the alleged damage to the Cargo Aldi destroyed.” Id. Accordingly, East Coast Warehouse argues that it is entitled to implead Aldi because it may have a claim of spoliation against Aldi and is entitled to seek damages from Aldi, should East Coast Warehouse be found liable for the Cargo that Aldi negligently destroyed. Id. at 9-10.

         Plaintiffs argue that East Coast Warehouse has not plead a viable claim. Plaintiffs contend that New Jersey law does not recognize a cause of action for negligent destruction of evidence. According to Plaintiff, New Jersey ...

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