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Dillon v. State Liquefied Compressed Gas Board

United States District Court, S.D. Mississippi, Northern Division

June 4, 2018

HEATHER DILLON, ET AL. PLAINTIFF
v.
STATE LIQUEFIED COMPRESSED GAS BOARD, ET AL. DEFENDANTS

          ORDER

          CARLTON W. REEVES UNITED STATES DISTRICT JUDGE.

         The Court considers three items in the above-styled case. Plaintiffs filed a Motion for a Temporary Restraining Order and Preliminary Injunction[1] and a Motion to Open Discovery.[2]Defendants filed a Motion to Dismiss. After considering the motions, evidence, and applicable law, the Court denies Plaintiffs' Motions and grants Defendants' Motion.

         I. Facts

         On September 25, 2017, a propane gas explosion killed three people and severely burned two others at a mobile home in Bay Springs, Mississippi. The Liquefied Compressed Gas Division of the Mississippi Insurance Department and State Fire Marshal initiated an investigation into the incident.[3] The investigation revealed that Heather Dillon-an employee of Delta Propane Gas, Inc., a subsidiary of United Propane Gas, Inc.-serviced the propane system before the explosion. Investigators found that Dillon improperly serviced the system on August 22, August 28, and September 25, 2017, and failed to notify the Insurance Department of certain services and alterations made to the system.

         On December 4, 2017, the Liquefied Compressed Gas Board served Dillon, Delta Propane, and United Propane with a “Notice of Hearing and Statement of Charges, ” containing seven charges of alleged violations of the National Fire Protection Association standards and state statutes and regulations. The Notice advised them that a hearing would take place on January 11, 2018, and that the proceeding could result in the issuance of monetary fines and/or permit or certificate revocation, subject to the Insurance Commissioner/State Fire Marshal Mike Chaney's approval. The Notice further specified they have a right to respond to the charges in writing, appear at the hearing to present testimony and evidence, and retain a lawyer and court reporter. The Board has since rescheduled the hearing to July 10, 2018.

         In response to the Notice, Dillon and United Propane expressed concerns about discovery and hearing procedures. Specifically, they asked for the appointment of an impartial hearing officer and an assistant attorney general to advise the hearing officer. They requested to take depositions, inspect physical evidence, and obtain a sample of the propane tested by the Insurance Department.

         The Board denied these requests. It provided the following procedural rules for the hearing, pursuant to Miss. Code § 75-57-105: “maintaining order and decorum in the hearing, guiding the proceedings, ruling on objections, and speaking up and asking questions at any time.” It further stated that it would not produce any physical evidence because the Insurance Department needed to keep the evidence for an ongoing criminal investigation. The Board specified that, as in other administrative hearings, the formal rules of evidence would not apply.

         On March 19, 2018, Chaney issued an amended “Notice of Hearing and Statement of Charges, ” containing nine charges. A month later, the Board advised Dillon and Delta Propane that they should submit any requests regarding discovery or other procedural matters in writing by May 7, and the Board would reconsider any requests at its May 10, 2018 meeting, which Dillon and Delta Propane were invited to attend.

         Plaintiffs Dillon, Delta Propane, and United Propane responded by filing the instant suit against the Board; the Board members, [4] in their official and individual capacities; and the Insurance Commissioner/State Fire Marshal Chaney, in his official and individual capacities. Plaintiffs bring a Fourteenth Amendment procedural due process claim under 42 U.S.C. § 1983 and seek to enjoin the pending administrative proceeding. They allege that the Board members, as industry competitors of Delta Propane and United Propane, have a direct financial interest in the outcome of the hearing, rendering the Board unduly biased.

         On April 13, 2018, Plaintiffs filed a Motion for a Temporary Restraining Order and Preliminary Injunction to enjoin the proceeding. In response, Defendants filed a Motion to Dismiss, arguing that the abstention doctrine requires this Court to abstain from interfering with an ongoing state proceeding. The magistrate judge stayed discovery on April 26, 2018, pending the Court's decision on the Motion to Dismiss. In light of the stay, Plaintiffs filed a Motion to Open Discovery and for a Rule 56(d) Summary Judgment Continuance on May 14, 2018. They ask that the case proceed to a preliminary injunction hearing and request time for discovery.

         II. Defendants' Motion to Dismiss

         A. Legal Standard

         Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of an action that fails “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6).

         When considering a Rule 12(b)(6) motion, the Court accepts all factual allegations as true and makes all reasonable inferences in the plaintiff's favor. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The plaintiff's complaint “must contain a short and plain statement of the claim showing that the pleader is entitled to relief.” Id. at 677-78 (quotation marks and citation omitted). The plaintiff's claims need not include “detailed factual allegations, ” but the complaint must contain “more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Id. at 678 (quotation marks and citation omitted). The plaintiff must also plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the ...


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