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Fluor Enterprises, Inc. v. Mitsubishi Hitachi Power Systems Americas, Inc.

United States District Court, E.D. Virginia, Richmond Division

April 16, 2019

FLUOR ENTERPRISES, INC., Plaintiff,
v.
MITSUBISHI HITACHI POWER SYSTEMS AMERICAS, INC., Defendant.

          MEMORANDUM OPINION

          HANNAH LAUCK, UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Plaintiff Fluor Enterprises, Inc.'s (“Fluor”) Motion to Strike Defendant's Jury Demand (the “Motion to Strike”) pursuant to Federal Rule of Civil Procedure 39(a)(2). (ECF No. 45.) Defendant Mitsubishi Hitachi Power Systems Americas, Inc. (“Mitsubishi”) responded, and Fluor replied. (ECF Nos. 47, 48.) Accordingly, the matter is ripe for disposition. The Court dispenses with oral argument because the materials before it adequately present the facts and legal contentions, and argument would not aid the decisional process. The Court exercises jurisdiction pursuant to 28 U.S.C. § 1332(a).[1] For the reasons that follow, the Court will grant Fluor's Motion to Strike.

         I. Factual and Procedural Background

         The Court offers only a brief recitation of the factual and procedural background and assumes familiarity with its June 15, 2018 Memorandum Opinion. (ECF No. 33.)

         A. Relevant Factual Background

         In February 2012, Mitsubishi entered into a Turbine Supply Agreement (the “TSA”) with Virginia Electric and Power Company (“VEPCO”) to sell turbine generators-one steam turbine generator and three combustion turbine generators-to VEPCO for use in a power generating facility. Because the facility was located in Brunswick County, Virginia, the project became known as the “Brunswick Project.”

         Five months later, in July 2012, VEPCO contracted with Fluor for Fluor to construct the Brunswick Project (the “Fluor Contract”). Under the Fluor Contract, Fluor was responsible for many aspects of the Brunswick Project, including “all design, engineering, procurement, construction, installation, start-up[, ] and testing work necessary to engineer, procure and construct the Brunswick Project.” (Counterclaim ¶ 8, ECF No. 17.) Mitsubishi was not a party to the Fluor Contract. Around the same time VEPCO entered into the Fluor Contract, it assigned the TSA to Fluor through a Partial Assignment, Assumption, and Coordination Agreement (“Partial Assignment Agreement”). (Partial Assignment Agreement 18, ECF No. 1-8.) VEPCO retained the obligation to pay Mitsubishi per the terms of the TSA.

         Fluor alleges that Mitsubishi breached the TSA and the Partial Assignment Agreement because it delivered parts late; it delivered improperly labeled parts; and it delivered parts that did not meet minimum quality requirements. (Compl. ¶¶ 24, 33, ECF No. 1.) Fluor further contends that Mitsubishi failed to pay Fluor the liquidated damages to which it is entitled pursuant to the TSA and the Partial Assignment Agreement. (Compl. ¶ 33.)

         Mitsubishi brings a defamation claim against Fluor based on statements made by Fluor's CEO, David Seaton, during an August 3, 2017 earnings call with shareholders. (Counterclaim 10-14.) During this call, Mr. Seaton stated:

All three projects, four if you include the Brunswick project that incurred a charge in 2015, had a fundamental problem. And the projects did not meet the original baseline assumptions due to improper estimating, craft productivity and equipment issues. All of these projects were bid in 2014 by the same pursuit team.
In addition, all four projects were based on next gen turbines or steam generators that were first of a kind for Fluor. The quality control and completeness of these turbines delivered to the site were not in line with our bid assumptions, and we are pursuing our options.

         (Counterclaim ¶ 15.) (emphasis in original).

         Mitsubishi contends that Mr. Seaton's statements were false and therefore defamatory because:

(a) the quality control and completeness of the turbines was in line with all reasonable requirements and expectations for the Brunswick Project; (b) any equipment issues with the turbines were minor in nature, and did not cause Fluor's substantial financial losses or the “fundamental problem” to which the Statements refer; and (c) the turbines ...

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