Utah Physicians for a Healthy Env't v. Diesel Power Gear LLC
Utah Physicians for a Healthy Env't v. Diesel Power Gear LLC
Opinion of the Court
Plaintiff Utah Physicians for a Healthy Environment (UPHE) brought this citizen enforcement action under the Clean Air Act (CAA). UPHE claims Defendants-three businesses and four individuals-violated the CAA and federally-enforceable Utah State Implementation Plan Regulations relating to the installation, removal, operation, and sale of emission control devices on diesel vehicles.
BACKGROUND
Defendant B&W Auto is a used automobile dealership that sells and repairs trucks, with a focus on custom built diesel trucks.
*1131DieselSellerz.com is an online diesel truck marketplace that was previously dismissed from this case. Stuart is CFO and COO of DieselSeller.com. Defendant Keaton Hoskins was employed to provide sales and marketing services for DieselSellerz.com from 2013 through 2015.
UPHE, a Utah-based non-profit organization, brought this suit asserting various CAA and Utah SIP claims against Defendants. UPHE claims Defendants modified diesel trucks in violation of emissions limitation standards, sold parts designed to evade emissions standards, and sold illegally-modified trucks. According to UPHE, Defendants' violations contribute pollution to air in the Wasatch Front, causing UPHE's members harm.
As redress for these violations, UPHE seeks injunctive relief and civil penalties. On June 8, 2018, the court entered a stipulated preliminary injunction enjoining B&W Auto and Sparks from violating several provisions of the CAA.
LEGAL STANDARD
Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."
ANALYSIS
Defendants admit to conduct that violates the CAA but nevertheless move for summary judgment on all of UPHE's claims. They primarily argue UPHE lacks constitutional standing and that the individual Defendants cannot be held liable as "responsible corporate officers." UPHE moves for summary judgment on various claims in four separate Partial Motions for Summary Judgment. The court takes up the threshold issues raised in Defendants' Motion before turning to UPHE's Motions.
I. Standing
Defendants argue UPHE lacks standing to bring its claims. To satisfy Article III of the Constitution, a plaintiff must have standing to bring a claim in federal court.
To satisfy the first element, UPHE must show (1) at least one of its members has suffered an injury in fact that is "(a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to [Defendants' illegal conduct]; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision."
A. Injury in Fact
At the summary judgment stage, a plaintiff must "set forth by affidavit or other evidence specific facts [demonstrating injury in fact], which for purposes of the summary judgment motion will be taken to be true."
UPHE provides affidavits from four of its members asserting various injuries relating to air pollution, including health and recreational harms.
These and other statements in UPHE's members' affidavits establish injury in fact.
B. Causation
To satisfy the second requirement of standing, a plaintiff must show its members' injuries are fairly traceable to the defendant's alleged violations and not "the result of the independent action of some third party not before the court."
Although Defendants do not dispute their emissions contribute to air pollution in the Wasatch Front, they strenuously argue any pollution attributable to their violations is negligible in comparison to other sources of pollution. For that reason, Defendants maintain UPHE cannot fairly trace its members' injuries to Defendants' violations. Although both sides present compelling arguments, the court ultimately concludes UPHE has satisfied its burden to establish causation.
The Tenth Circuit has not adopted a standard for evaluating causation when many sources contribute to injury-causing air pollution. Previously, this court applied a standard proposed by UPHE
This standard was first applied in Clean Water Act cases, with good reason; when multiple parties discharge pollution into a single waterway, "the pollution of any one may be shown to cause some part of the injury suffered."
Defendants urge a different "meaningful contribution" approach in this Clean Air Act case, drawing on a series of cases involving greenhouse gas (GHG) emissions starting with Massachusetts v. EPA .
Absent that level of "meaningful contribution" to global warming, plaintiffs have struggled to meet the causation requirement in other GHG cases. For example, the Ninth Circuit found too attenuated an environmental group's claim that state agencies' failure to set emissions standards at oil refineries in Washington "contribute[d] to climate-related changes that result in [plaintiffs'] purported injuries."
Defendants argue this case is more like a global warming case than a waterway pollution case, and that a "meaningful contribution" or alternative threshold standard should therefore apply. It is true that this case lies somewhere between the two lines of cases. By its nature, air is less contained than water, so it can be more difficult to trace air pollution back to its sources in a given location relative to water pollution. And Defendants persuasively highlight the many sources contributing to air pollution in the Wasatch Front, including on-road mobile sources, wildfires, and oil refineries.
*1135But the direct relationship between UPHE's injuries and Defendants' pollution makes this case more analogous to a waterway case than a GHG case. Unlike plaintiffs in a GHG case, UPHE need not trace Defendants' emissions from a point source to global climate change and then back to the Wasatch Front. Rather, UPHE complains that Defendants' emissions in the Wasatch Front directly and immediately contribute to air pollution in the Wasatch Front, and that the air pollution causes its members harm.
To be sure, Defendants' emissions are a small fraction of total emissions in the Wasatch Front. But aside from the "meaningful contribution" language used in GHG cases, Defendants do not articulate a principled threshold requirement for causation. Further, a causation standard that precludes citizens from suing for CAA violations directly contributing pollution to the air they breathe would seriously undermine the CAA's citizen enforcement provision.
For these reasons, the court will apply the standard articulated above: to meet its burden on causation, UPHE must show Defendants discharged a pollutant that causes or contributes to the kinds of injuries suffered by UPHE's members in the Wasatch Front. UPHE meets this burden by showing Defendants' violations contribute nitrous oxides (NOx) and particulate matter (PM) to air in the Wasatch Front,
C. Redressability
For the third standing requirement, redressability, a plaintiff must show "it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision."
Civil penalties, if awarded, would redress UPHE's injuries by deterring future *1136violations.
UPHE also seeks mandatory injunctive relief in the form of an injunction ordering Defendants to "recall and either repair or destroy all of the illegal parts and vehicles they have conveyed to third-parties that continue to pollute."
Finally, UPHE asks that up to $ 100,000 of any civil penalty be earmarked for use in a beneficial mitigation project as provided by 42 U.S.C. 7604(g)(2).
Defendants argue UPHE's claims are not redressable for the same reason they fail to show causation: because Defendants' violations are but a "drop in the ocean" of total air pollution in the Wasatch Front. According to Defendants, UPHE members' pollution-related injuries cannot be redressed by a favorable outcome in this action because even if UPHE is successful, other sources of emissions will continue to exist in the Wasatch Front and cause harm to the members. This argument fails for the same reasons articulated above. UPHE demonstrates Defendants' violations contribute to the pollution harming its members. Were Defendants' contributions to cease, that pollution would no longer pose a risk to the members. That is enough to satisfy the redressability requirement.
*1137Having shown its members suffer redressable injuries in fact fairly traceable to Defendant's violations, UPHE has standing to pursue each of its claims except for mandatory injunctive relief.
II. The Responsible Corporate Officer Doctrine
Defendants argue many of UPHE's claims against the individual Defendants are legally barred because the CAA does not authorize civil enforcement suits against "responsible corporate officers." The court disagrees.
The CAA authorizes citizen suits against "any person" for violations of "an emission standard or limitation" under the Act.
The criminal enforcement provision of the CAA was amended in 1977 to add "any responsible corporate officer" to the definition of "person."
Although the Tenth Circuit has not spoken on this issue, a number of other courts have held responsible corporate officers can be held liable in CAA and Clean Water Act
The committee's decision with respect to the civil penalty provisions of the act is intended to assure that the rationale of the Park case (for food and drug law) will apply to enforcement of the Clean Air Act. The committee thus intends [t]hat in providing sanctions which reach and touch the individuals who execute the corporate mission ... the act imposes not only a positive duty to seek out and remedy violations when they occur but also, and primarily, a duty to implement measures that will insure violations will not occur. The requirement of foresight and vigilance imposed on responsible corporate agents are beyond question demanding, and perhaps onerous, but they are no more stringent than the public has a right to expect of those who voluntarily assume positions of authority in business enterprises whose services and products affect the health and well-being of the public that supports them.70
In light of these cases and the legislative history, it is the court's best judgment that the responsible corporate officer doctrine applies in CAA citizen enforcement suits. The individual Defendants in this case can therefore be held liable if they had authority to prevent or correct CAA violations and failed to exercise that authority, provided they had knowledge of the facts giving rise to the violation.
In a parallel argument, Defendants argue the individual Defendants cannot be held personally liable unless UPHE pierces the corporate veil. But the responsible corporate officer and corporate veil doctrines are conceptually distinct. The former assigns personal liability based on a corporate officer's failure to exercise his authority to prevent or correct violations, whereas the latter is a mechanism for disregarding a business entity and holding a principal liable for the acts of a business. Plaintiff does not seek to disregard B&W Auto or DPG's corporate formalities and hold individual Defendants liable for the *1139businesses' obligations. The corporate veil doctrine therefore does not apply.
III. UPHE's Partial Motions for Summary Judgment
Having resolved the preceding threshold questions, the court turns to UPHE's four Partial Motions for Summary Judgment. Additional arguments raised in Defendants' Motion for Summary Judgment relating to specific claims are addressed in the following analyses.
A. UPHE's Motion to Establish B&W Auto and Sparks' Liability
UPHE moves to establish Defendants B&W Auto and Sparks' liability for violations of the CAA and Utah SIP relating to (a) the removal of pollution control devices from federally-certified vehicles, (b) the installation of aftermarket emission control defeat parts in federally-certified vehicles, and (c) the sale of aftermarket emission control defeat parts as part of vehicles.
Defendants admit B&W Auto and Sparks violated the cited CAA and SIP provisions in question,
As for Defendants' third argument, Sparks can be held personally liable as a responsible corporate officer if he knew of the facts underlying the violations, had the ability to prevent or correct the violations, and failed to do so. Although UPHE shows Sparks had the ability to prevent and correct the violations, there remains a question of fact whether he had sufficient knowledge of the facts underlying the violations.
As CEO, manager, and owner of B&W Auto, Sparks was in a position to prevent B&W Auto from removing pollution control devices, installing emission control defeat parts, and selling defeat parts as part of vehicles.
1. Pass-Through Sale of "As Is" Vehicles
In their Motion for Summary Judgment, Defendants argue they cannot be held liable for the "pass-through sale" of modified trucks purchased by B&W Auto with emissions defeat parts already installed.
Under
for any person to manufacture or sell, or offer to sell, or install, any part or component intended for use with, or as part of, any motor vehicle or motor vehicle engine, where a principal effect of the part or component is to bypass, defeat, or render inoperative any device or element of design installed on or in a motor vehicle or motor vehicle engine in compliance with regulations under this subchapter, and where the person knows or should know that such part or component is being offered for sale or installed for such use or put to such use.
Defendants contend this provision prohibits only the " 'sale or installation' of 'parts or components' meant to defeat emissions," and that when a truck is acquired and sold as-is, "the emissions part is not being sold."
Defendants' reading of the statute and application to the facts here is untenable. Section 7522(a)(3)(B) prohibits by its plain language the sale of an emissions defeat part "as part of" a vehicle where the seller knows or should know the part is being "put to such use." This language plainly encompasses B&W Auto's "as is" sale of modified vehicles it knew or should have known to contain defeat emission parts. Insofar as Defendants move for summary judgment on UPHE's seventeenth, eighteenth, and nineteenth causes of action on this basis, the motion is denied.
B. UPHE's Motion to Establish DPG, Sparks, and Stuart's Liability for Selling Defeat Parts
UPHE next moves to establish DPG, Sparks', and Stuart's liability for selling aftermarket emission control defeat parts in violation of the CAA.
There is no genuine dispute of material fact as to DPG, Sparks', and Stuart's liability for these claims, for some of the identified defeat parts. Defendants admit DPG sold "at least 88 exhaust gas recirculation delete kits to customers, including [to] customers in Utah, that have the principal effect of bypassing, defeating, or rendering inoperative pollution control devices on federally-certified motor vehicles." Defendants raise no dispute of fact as to these defeat parts.
But UPHE also claims DPG sold "at least 18 aftermarket exhaust pipes," "at least 49 delete pipes," and "at least 26 delete pipes and EGR delete kits [sold] to Defendant B&W."
UPHE's evidence falls short. To succeed on summary judgment, UPHE must demonstrate each element of its claim, and it cannot do so here without evidence-or an admission-showing the parts DPG sold had a "principle effect" that violated the CAA. UPHE's Motion is therefore granted as to its ninth cause of action against DPG, but only for the 88 exhaust gas recirculation delete kits Defendants admit violate the CAA. It is denied as to all other parts.
Turning to the Motion as it relates to Sparks, Defendants admit Sparks "personally caused DPG to order, and subsequently to sell, multiple delete pipes,"
As for Defendant Stuart, CFO and COO of DPG, Defendants admit Stuart is authorized to decide "what parts DPG will sell."
C. UPHE's Motion to Establish Hoskins' Liability
In its next Motion, UPHE asks the court to find Defendant Keaton Hoskins liable for violations of the CAA and Utah SIP relating to (a) the removal of pollution control devices from federally-certified vehicles, (b) the installation of aftermarket emission control defeat parts in federally-certified vehicles, and (c) owning *1142or operating motor vehicles registered in Utah without maintaining operable pollution control systems.
In its fourth and eighth causes of action, UPHE claims Hoskins illegally altered two vehicles by removing or rendering inoperative emission control systems, in violation of the CAA
Hoskins "does not dispute the facts set forth by [UPHE] in its [M]otion,"
D. UPHE's Motion to Establish DPG's Shared Liability for B&W Auto's Violations Regarding Tampered "Giveaway" Trucks
UPHE's final Motion seeks to establish DPG's shared liability for illegal modifications B&W Auto made to trucks given away as DPG sweepstakes prizes.
Since 2013, DPG has run a series of sweepstakes giveaway promotions. In connection with these promotions, DPG has given away or offered to give away various prizes, including at least 27 trucks.
The parties hold different views with respect to the sweepstakes. UPHE asks the court to find DPG is equally liable for B&W Auto's illegal modifications to the sweepstakes trucks, under two theories: either B&W Auto was acting as DPG's agent when it made the modifications, or the two businesses were working together as a "joint enterprise." Conversely, Defendants argue any claims related to the sale of the modified sweepstakes trucks must be dismissed because the trucks were not "sold" but given away as prizes.
UPHE has not established DPG's liability for the modifications under its agency or joint enterprise theories. A principal is liable for its agent's CAA's violations
*1144UPHE's joint enterprise theory similarly fails for lack of proof. As an initial matter, UPHE does not provide authority to show the joint enterprise theory of liability is available for federal claims brought under the CAA. But even assuming the theory is available, UPHE does not provide evidence it applies here. Under Utah law, a joint enterprise is "(1) [a]n agreement, express or implied, among the members of the group; (2) a common purpose to be carried out by the group; (3) a community of pecuniary interest in that purpose, among the members; and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control."
Turning to Defendants' argument, the transfer of the sweepstakes trucks to the winners falls within the definition of "sale." The CAA does not define the term sale, but according to Black's Law Dictionary, it is "[t]he transfer of property or title for a price."
Under these definitions, DPG sold the trucks to the sweepstakes winners. B&W Auto, acting as DPG's agent,
CONCLUSION
For the reasons stated:
• Defendants' Motion for Summary Judgment119 is DENIED;
• UPHE's Partial Motion for Summary Judgment to establish B&W Auto's and Sparks' Liability120 is GRANTED in part and DENIED in part;
• UPHE's Partial Motion for Summary Judgment to Establish DPG, Sparks', and Stuart's Liability for Selling Defeat Parts121 is GRANTED in part and DENIED in part;
• UPHE's Partial Motion for Summary Judgment to Establish Hoskins' Liability122 is GRANTED; and
• UPHE's Partial Motion for Summary Judgment to Establish DPG's Shared Liability for B&W Auto's Violations Regarding Tampered "Giveaway" Trucks123 is DENIED.
The Clean Air Act authorizes citizen suits for violations of "an emission standard or limitation" under the Act, and the term "emission standard or limitation" includes standards established by a State Implementation Plan (SIP).
Dkts. 64, 81, 108, 109.
Dkt. 107.
Dkt. 107 at 14.
Dkt. 114 (Sparks Decl.) Ex. 1 at ¶ 4.
Dkt. 107 at 43.
Dkt. 107 at 22.
Dkt. 107 at 19. Although 4X4 Anything is named as a Defendant, the parties agree it is a d/b/a of DPG. See Dkt. 65 at 1 n.2; Dkt. 81 at 2 n.1.
Dkt. 107 at 23.
The Wasatch Front is a metropolitan region along the Wasatch Range in northern Utah. About eighty percent of the State's population resides along this roughly 120 mile stretch from Brigham City to Nephi. See Wasatch Front, Wikipedia, https://en.wikipedia.org/wiki/Wasatch_Front (last updated February 22, 2019).
Dkt. 104.
Fed. R. Civ. P. 56(a).
Anderson v. Liberty Lobby, Inc. ,
N. Natural Gas Co. v. Nash Oil & Gas, Inc. ,
Buell Cabinet Co., Inc. v. Sudduth ,
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc. ,
UPHE is a non-profit organization whose purposes include "advocat[ing] for clean air, healthy land and clean water." Dkt. 58 at 3. This lawsuit is germane to that purpose. UPHE asserts its individual members' participation in this lawsuit is not required, and the court agrees.
Laidlaw ,
At a hearing on January 23, 2018, the court found Utah Physicians met its burden to make a "threshold showing of standing to advance [its] claims at least to the dispositive motion stage." Dkt. 79 at 16.
Lujan v. Defenders of Wildlife ,
Laidlaw ,
Summers v. Earth Island Inst. ,
Laidlaw ,
See Dkt. 58 Exs. B-E.
See, e.g. , Dkt. 58 Ex. B (Garber) ¶ 6; Dkt. 58 Ex. C (Jones) ¶¶ 5-11; Dkt. 58 Ex. D (Evans) ¶ 5; Dkt. 58 Ex. E (K. Jones) ¶ 3.
See, e.g. , Dkt. 58 Ex. B (Garber) ¶ 7; Dkt. 58 Ex. C (Jones) ¶¶ 10-11; Dkt. 58 Ex. E (K. Jones) ¶ 9.
Dkt. 58, Ex. B ¶¶ 7, 10.
Defendants do not dispute this element of standing is met.
Lujan ,
Nova Health Sys. v. Gandy ,
Dkt. 79 at 12-13.
Piney Run Pres. Ass'n v. Cnty. Comm'rs of Carroll Cnty. ,
WildEarth Guardians v. Colorado Springs Utils. Bd. , No. 17-cv-00357,
Piney Run ,
Public Interest Research Group of New Jersey, Inc. v. Powell Duffryn Terminals Inc. ,
Northwest Envtl. Def. Ctr. ,
Accord
Washington Envt'l Council v. Bellon ,
Amigos Bravos v. U.S. Bureau of Land Mgmt. ,
Dkt. 107 at 9-13.
But see Amigos Bravos ,
Dkt. 107 at 6 (Defendants admit "[t]he consequences of B&W Auto's nominal violations resulted in increased emissions into the Wasatch Front ....."); Dkt. 69 Ex. 1 at 4 ("[T]he majority of PM2.5 and PM2.5 precursor gases [along the Wasatch Front] come from mobile sources [including automobiles and trucks]."); Dkt. 69 Ex. 2 at 4 ("In Weber County 54% of NOx comes from on road vehicles of which 44% of the emissions come from diesel vehicles ...").
See, e.g. , Dkt. 69 Ex. 1 at 4 (describing the health and environmental effects of PM2.5 and its precursor pollutants).
Laidlaw ,
Larson v. Valente ,
WildEarth Guardians v. Public Service Co. of Colorado ,
See Bronson v. Swensen ,
See Laidlaw ,
See Grand Canyon Trust v. Energy Fuels Res. (U.S.A.) Inc. ,
Dkt. 58 at 23; Dkt. 49 at 135.
Dkt. 49 at 136.
See WildEarth ,
Other courts confronted with the cumulative nature of pollution have rejected similar redressability arguments. See, e.g., Northwest Envtl. Defense Ctr. v. Owens Corning Corp. ,
The court previously found individual Defendants are "persons" under the CAA who can be sued for their personal participation in violative conduct, "regardless of their status as employees or members of an LLC." Dkt. 79 at 23.
U.S. v. Park ,
Dkt. 75 at 14 (quoting Illinois v. Commonwealth Edison Co. ,
The Clean Water Act presents the same issue; it has a responsible corporate officer provision in the criminal enforcement section but not the civil enforcement section. Compare
See, e.g., U.S. v. Mac's Muffler Shop, Inc. , No. C85-138R,
Illinois v. Commonwealth Edison Co. ,
H.R. Rep. 95-294, at 1149 (1977).
See Mac's Muffler Shop ,
Dkt. 64.
Dkt. 75 at 7-9 (agreeing with UPHE's statements of the CAA and SIP claims and that those "element[s] ha[ve] been met").
See Mac's Muffler Shop ,
Dkt. 64, Ex. A (Sparks Depo.) at 16:14-25.
Id. at 25:13-26:4.
Dkt. 107 at 37-38.
Dkt. 107 at 37.
References to named Defendant 4x4 Anything have been removed as the parties agree 4x4 Anything is a d/b/a of DPG. See Dkt. 65 at n.2; Dkt. 81 at 2 n.1.
Dkt. 81.
Dkt. 81 at 6-9.
Dkt. 88 at 10.
Dkt. 88 at 13.
Dkt. 88 at 17.
Dkt. 64, Ex. A (Sparks Depo.) at 133:23-134:13.
Dkt. 88 at 11.
Dkt. 88 at 13.
Dkt. 88 at 12-13.
Dkt. 108.
Under the CAA, it is a violation "for any person knowingly to remove or render inoperative any ... device or element of design [installed on or in a motor vehicle or motor vehicle engine in compliance with regulations under this subchapter] after [the vehicle's] sale and delivery to the ultimate purchaser."
Utah SIP Regulation R307-201-2 provides: "No person shall remove or make inoperable within the State of Utah the system or device [for the control of crankcase emissions or exhaust emissions in compliance with the Federal motor vehicle rules] or any part thereof, except for the purpose of installing another system or device, or part thereof, which is equally or more effective in reducing emissions from the vehicle to the atmosphere."
Under the CAA, it is a violation "for any person to ... install, any party or component intended for use with, or as part of, any motor vehicle or motor vehicle engine, where a principal effect of the part or component is to bypass defeat or render inoperative any device or element of design installed on or in a motor vehicle or motor vehicle engine in compliance with regulations under this subchapter, and where the person knows or should know that such part or component is being ... installed for such use or put to such use."
Utah SIP Regulation R307-201-2 states: "Any person owning or operating any motor vehicle or motor vehicle engine registered in the State of Utah on which is installed or incorporated a system or device for the control of crankcase emissions or exhaust emissions in compliance with the Federal motor vehicle rules, shall maintain the system or device in operable condition and shall use it at all times that the motor vehicle or motor vehicle engine is operated."
Dkt. 108 at 3-6.
Dkt. 113 at 3.
UPHE purports to move on its thirteenth cause of action, but it appears UPHE intended to move on the sixteenth cause of action. The thirteenth cause of action is against B&W Auto whereas the sixteenth is against Hoskins for installing aftermarket defeat parts. See Dkt. 49 at 112.
Dkt. 109.
Dkt. 107 at 19.
Dkt. 115 at 4-5.
See Dkt. 64, Ex. A (Sparks Depo.) at 79:8-10 ("DPG never actually takes title. DPG just pays for the invoice for ... B&W to transfer the title to the owner, to the new winner."); Dkt. 107-3 at ¶ 31 ("DPG also contracted with B&W Auto to provide a custom built truck as a sweepstakes prize.").
Dkt. 107 at 14-18. There are some discrepancies between the parties' account of which trucks were given away as sweepstakes prizes. Compare Dkt. 109 at 3 with Dkt. 107 at 14-18.
1-800 Contacts v. Lens.com. ,
See Restatement (Third) of Agency § 3.03 cmt. b ("[A]n agent's apparent authority originates with expressive conduct by the principal toward a third party ... [t]he fact that one party performs a service that facilitates the other's business does not constitute such a manifestation.").
Dkt. 107-3 at ¶ 31.
See Dkt. 114 (Sparks Decl.) Ex. 2 at ¶ 32 ("DPG does not own the giveaway vehicles, nor makes [sic] decisions about what vehicle is provided by B&W Auto.").
Farmers Ins. Exchange v. Parker ,
Dkt. 109 at 4.
Defendants' arguments relating to "corporate affiliate liability" and the corporate veil are inapposite. Plaintiff does not seek to hold DPG derivatively liable for B&W Auto's actions or to pierce the corporate veil. Rather, UPHE asks the court find DPG "directly liable for causing B&W Auto's admitted violations." Dkt. 116 at 4.
UPHE also argues in its Opposition to Defendants' Motion for Summary Judgment that DPG is the "equitable owner" of the sweepstakes vehicles, because it paid for them. Dkt. 110 at 23. It claims "DPG is the effective or equitable owner ... with B&W Auto acting as [DPG's] agent and the mere holder of bare legal title." Dkt. 110 at 23. Apart from two bankruptcy cases applying the equitable title doctrine, UPHE provides no authority for its position. And Defendants cite controlling cases urging a limited application of the doctrine. See, e.g., Crouch v. U.S. ,
SALE, Black's Law Dictionary (10th ed. 2014)
PRICE, Black's Law Dictionary (10th ed. 2014).
Although UPHE has not shown B&W Auto acted as DPG's agent in making modifications to the trucks, as discussed above, the record does show B&W Auto acted as DPG's agent in purchasing and conveying the trucks to the sweepstakes winners. Unlike for the modifications, there is no question of fact as to whether DPG directed B&W Auto to convey the vehicles to the winners. See Dkt. 64, Ex. A (Sparks Depo.) at 79:8-10 ("DPG never actually takes title. DPG just pays for the invoice for ... B&W to transfer the title to the owner, to the new winner."); Dkt. 107-3 at ¶ 31 ("DPG also contracted with B&W Auto to provide a custom built truck as a sweepstakes prize.").
Dkt. 64, Ex. A (Sparks Depo.) at 82:13-25; Dkt. 111, Ex. E (Stuart Depo.) at 47:17-49:20.
Dkt. 64, Ex. A (Sparks Depo.) at 80:9-81:13; Dkt. 111, Ex. E (Stuart Depo.) at 47:17-48:2.
UPHE cites several cases examining the legality of lotteries or "bank nights," in which courts found prizes were exchanged for consideration because the hosting businesses gained direct or indirect benefits from the promotion. See Affiliated Enterprises v. Gantz ,
Dkt. 107.
Dkt. 64.
Dkt. 81.
Dkt. 108.
Dkt. 109.
Reference
- Full Case Name
- UTAH PHYSICIANS FOR A HEALTHY ENVIRONMENT v. DIESEL POWER GEAR LLC, 4x4 Anything LLC, Sparks Motors LLC, David W. Sparks, David Kiley, Joshua Stuart, and Keaton Hoskins
- Cited By
- 5 cases
- Status
- Published