A.O.A. v. Rennert (350 F. Supp. 3d 818, 2018)

United States District Court for the Eastern District of Missouri 2018-10-16

The Public Health and Welfare

Citations

Full opinion text

CATHERINE D. PERRY, UNITED STATES DISTRICT JUDGE

This Order considers defendants' motion to dismiss plaintiffs' first amended complaint and defendants' motion for determination of foreign law, along with certain other procedural motions.

In their motion to dismiss, defendants assert that dismissal is required for several reasons. They argue that principles of international comity require abstention, that the Court lacks personal jurisdiction over the non-Missouri defendants, and that the complaint fails to state a claim upon which relief can be granted. In their motion for determination of foreign law, defendants ask me to rule that the law of Peru applies to all aspects of this case. Plaintiffs respond by arguing for the application of Missouri law. Additionally pending are a motion to substitute parties to replace the defendant Trusts with the trustees and beneficiaries of each Trust, and a motion to consolidate three additional cases with these consolidated cases.

For the reasons that follow, I conclude that the Court lacks personal jurisdiction over the newly-added individual and Trust defendants, although the Court continues to have jurisdiction over previously-named defendants Ira Rennert and Renco. I conclude that plaintiffs' negligence-based claims survive the motion to dismiss, whether considered under Missouri, New York, or Peruvian law, but their claims of strict liability and civil conspiracy fail to state a claim on which relief may be granted. I conclude that the law of Missouri should apply to this case. Finally, I conclude that abstention based on international comity is not appropriate.

Plaintiffs are hundreds of Peruvian children (many of whom have attained majority in the many years these cases have been pending) who live near the La Oroya Complex, a metallurgical smelting and refining complex owned and operated by the defendant companies and their Peruvian subsidiary. The individual defendants are directors and/or officers of the defendant companies. The defendant Trusts were established by defendant Ira Rennert for the benefit of himself and his family and together own the defendant companies. Plaintiffs allege that defendants, acting from Missouri and New York, ran the operations of the La Oroya Complex in a manner that resulted in plaintiffs' exposure to lead and other toxic substances, which caused plaintiffs' serious medical and developmental injuries. They bring a variety of state-law tort claims against the defendants.

Operative Complaint

Plaintiffs originally brought their seven-count complaint in this action against four corporate defendants: Doe Run Resources Corporation ("Doe Run Resources"), DR Acquisition Corp. ("DR Acquisition"), The Renco Group, Inc. ("Renco"), and Renco Holdings, Inc.; and six individual defendants: Marvin K. Kaiser, Albert Bruce Neil, Jeffery L. Zelms, Theodore P. Fox III, Daniel L. Vornberg, and Ira L. Rennert. With leave of Court, and upon stipulation of the parties, plaintiffs filed an amended complaint in February 2017, naming fifteen additional defendants, specifically, Doe Run Cayman Holdings LLC ("Cayman Holdings"); individual defendants Roger L. Fay, Marvin M. Koenig, John A. Siegel Jr., Dennis A. Sadlowski, John A. Binko, and Michael C. Ryan; and several Ira Rennert Trusts ("the Trusts"). Originally-named defendants Renco Holdings and Daniel L. Vornberg are not named in the amended complaint.

The amended complaint is brought in twelve counts:

• Count I - Negligence against Renco, Doe Run Resources, DR Acquisition, Cayman Holdings, the Trusts, Rennert, Fay, Koenig, Siegel, Sadlowski, Binko, and Ryan;

• Count II - Negligence against Rennert, Kaiser, Neil, Zelms, Fox, Fay, Koenig, Siegel, Sadlowski, Binko, and Ryan;

• Count III - Civil Conspiracy against Renco, Doe Run Resources, DR Acquisition, Cayman Holdings, the Trusts, Rennert, Fay, Koenig, Siegel, Sadlowski, Binko, and Ryan;

• Count IV - Civil Conspiracy against Rennert, Kaiser, Neil, Zelms, Fox, Fay, Koenig, Siegel, Sadlowski, Binko, and Ryan;

• Count V - Absolute or Strict Liability against Renco, Doe Run Resources, DR Acquisition, Cayman Holdings, the Trusts, Rennert, Fay, Koenig, Siegel, Sadlowski, Binko, and Ryan;

• Count VI - Absolute or Strict Liability against Rennert, Kaiser, Neil, Zelms, Fox, Fay, Koenig, Siegel, Sadlowski, Binko, and Ryan;

• Count VII - Contribution Based on Tortious Conduct of Entities Acting in Concert against all defendants;

• Count VIII - Direct Liability for Breach of Assumed Duties Pertaining to Foreseeable Harms against Doe Run Resources, Cayman Holdings, Kaiser, Neil, Zelms, and Fox;

• Count IX - Direct Liability for Breach of Assumed Duties Pertaining to Foreseeable Harms against Renco, DR Acquisition, Rennert, Fay, Koenig, Siegel, Sadlowski, Binko, and Ryan;

• Count X - Negligent Performance of a Contract or Undertaking against Doe Run Resources, Cayman Holdings, Kaiser, Neil, Zelms, and Fox;

• Count XI - Negligent Performance of a Contract or Undertaking against Renco, DR Acquisition, Rennert, Fay, Koenig, Siegel, Sadlowski, Binko, and Ryan;

• Count XII - Direct Participation Liability against Renco, Rennert, and the Trusts.

All defendants seek to dismiss the amended complaint in its entirety.

Motion to Dismiss

I. Personal Jurisdiction

As noted above, the amended complaint added as defendants eight trusts established by Ira Rennert for the benefit of himself and his family; six individuals who are described as officers and directors of various of the originally-named company defendants; and one additional company, Doe Run Cayman Holdings LLC. Originally-named defendants Ira Rennert and Renco challenge personal jurisdiction, as do all newly-added defendants other than Cayman Holdings, which is a Missouri limited liability company. I conclude that this Court cannot assert personal jurisdiction over the Trusts and the newly-added individual defendants, and so I will dismiss the case against them without prejudice. I conclude that Rennert and Renco are properly subject to personal jurisdiction in this district.

To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff is only required to make a prima facie showing of personal jurisdiction, that is, plaintiff must allege facts sufficient to support a "reasonable inference that the defendants can be subjected to jurisdiction within the state."

K-V Pharm. Co. v. J. Uriach & CIA, S.A. , 648 F.3d 588, 591-92 (8th Cir. 2011) ; Digi-Tel Holdings, Inc. v. Proteq Telecomms. (PTE), Ltd. , 89 F.3d 519, 522 (8th Cir. 1996). If the district court relies on pleadings and affidavits, the court must look at the facts in the light most favorable to the party invoking personal jurisdiction, and resolve all factual conflicts in favor of that party. Dakota Indus., Inc. v. Dakota Sportswear, Inc. , 946 F.2d 1384, 1387 (8th Cir. 1991) (citing Watlow Elec. Mfg. Co. v. Patch Rubber Co. , 838 F.2d 999, 1000 (8th Cir. 1988) ).

There are two types of personal jurisdiction: general and specific. Daimler AG v. Bauman , 571 U.S. 117, 127, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014). General, or "all-purpose," jurisdiction exists over a corporation when the forum state is its place of incorporation or the location of its principal place of business. Id. at 121, 127, 134 S.Ct. 746 ; see also Goodyear Dunlop Tires Operations, S.A. v. Brown , 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011). In an exceptional case, an additional state could have general jurisdiction if the corporation's activities in that state are "so substantial and of such a nature as to render the corporation at home in that State." Daimler , 571 U.S. at 139 n.19, 134 S.Ct. 746.

Specific, or "conduct-linked," jurisdiction involves suits "arising out of or related to the defendant's contacts with the forum[.]" Helicopteros Nacionales de Colombia, S.A. v. Hall , 466 U.S. 408, 414 n.8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) ; see also Daimler , 571 U.S. at 122, 134 S.Ct. 746. The defendant's activities within the forum state must give rise to, or relate to, the cause of action. Romak USA, Inc. v. Rich , 384 F.3d 979, 984 (8th Cir. 2004). For a Missouri court to exercise specific jurisdiction over an out-of-state defendant, two requirements must be met: 1) jurisdiction must be allowed by the Missouri long-arm statute; and 2) the reach of the long-arm statute must comport with due process. Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co. , 646 F.3d 589, 593-94 (8th Cir. 2011). Missouri's long-arm statute authorizes, inter alia , personal jurisdiction over defendants who transact business or commit a tort within the state. Mo. Rev. Stat. § 506.500.1(1), (3). Due process requires that a defendant have certain minimum contacts with the state, such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Wash. , 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The individual categories in the long-arm statute, such as transacting business or making a contract, are construed broadly "to provide for jurisdiction, within the specific categories enumerated in the statute, to the full extent permitted by the Due Process Clause." State ex rel. Metal Serv. Ctr. of Ga., Inc. v. Gaertner , 677 S.W.2d 325, 327 (Mo. banc 1984).

When assessing the sufficiency of a defendant's contacts, the court should examine five factors: (1) the nature and quality of contacts with the forum state; (2) the quantity of such contacts; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) convenience of the parties. Burlington Indus., Inc. v. Maples Indus., Inc. , 97 F.3d 1100, 1102 (8th Cir. 1996). Physical entry into a "is certainly a relevant contact." Walden v. Fiore , 571 U.S. 277, 285, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014).

A. The Trusts and the Newly-Added Individual Defendants

The Trusts were established under New York law and are alleged to together own 100% of Renco stock. Renco lost its corporate status from December 31, 2003 to August 10, 2004. The amended complaint alleges that the Trusts, along with other shareholders, officers, and directors of Renco are personally liable for the torts committed by Renco during the time of the dissolution. ECF 474 ¶ 110. It also alleges that certain of the officers and directors participated in the tortious activity, including acts that caused the delay of necessary environmental improvements at the La Oroya Complex. See, e.g., ECF 474 ¶ 123, 124, 138-140.

Plaintiffs argue that under New York law they may look to the owners and officers of the dissolved corporation for damages attributable to the dissolved corporate defendant's acts during that time. But in L-Tec Elec. Corp. v. Cougar Elec. Org., Inc. , the court held that once a corporation has been reinstated, "its corporate status is restored nunc pro tunc ," and the individual defendants are relieved of any personal liability. 198 F.3d 85, 87 (2nd Cir. 1999) ; see N.Y. Tax § 203-a(7). Plaintiffs' argument based on this theory fails.

Plaintiffs' amended complaint makes very few allegations about the Trusts. It names them in the paragraphs introducing the defendants. ECF 474 ¶ 12, 13, 14. It adds them to a few paragraphs that make allegations about Rennert (ECF 474 ¶ 78, 83, 84, 235) but provides no specific allegations about their actions. The amended complaint makes numerous allegations against "defendants" generally, and plaintiffs' brief opposing the motion to dismiss does the same. To the extent those allegations can be construed to include the Trusts, they are too vague to establish personal jurisdiction in Missouri. Merely alleging that a party is a shareholder, even a 100% shareholder, without more does not establish personal jurisdiction over the shareholder. Cf. Lakota Girl Scout Council, Inc. v. Havey Fund-Raising Mgmt., Inc., 519 F.2d 634, 638 (8th Cir. 1975). Plaintiffs have not shown that this Court can exercise personal jurisdiction over these New York Trusts, and I will grant the motion to dismiss as to the Trusts.

The newly-added individual defendants worked for Renco and various of the other corporate defendants, including some of those with their principal places of business in Missouri. In addition to being Renco officers, several of them are alleged to have held special powers of attorney to act in Peru for Renco and the other corporate defendants, including some of the Missouri corporate defendants. Unlike most of the individual defendants named in the original complaint, none of these defendants ever worked in Missouri or entered into any contracts in Missouri. Although none dispute being officers of Renco, some were never directors of Renco or the other corporations, and the two who were directors (Fay and Sadlowski) attested that they were never "dominant or controlling" directors. ECF 757-1. Plaintiffs have not presented any evidence that these defendants have had sufficient contacts with Missouri to allow the exercise of personal jurisdiction here.

Plaintiffs also argue that the Trusts and the newly-added individual defendants waived any objection to personal jurisdiction in Missouri. Between the date the amended complaint was deemed filed, February 21, 2017, and the filing of the motion to dismiss on May 12, 2017, attorneys entered their appearances for all the newly-added defendants. Those lawyers participated in a status conference, joined in filing a status report, and agreed to certain requested extensions of time. In the time the motion has been pending, the newly-added defendants have participated in discovery and in the regular scheduling conferences with the Court. I do not agree with plaintiffs that those actions constituted a waiver of the new defendants' right to challenge personal jurisdiction. Indeed, given all the other things going on in this case, it was entirely reasonable for the new lawyers to take the actions that they did before filing the anticipated motion to dismiss. And their actions taken after the motion was filed are consistent with my directives that discovery proceed without delay and without regard to any pending motions. These newly-added defendants did not waive their right to challenge personal jurisdiction. I will grant the motion to dismiss for lack of personal jurisdiction as to defendants Roger L. Fay, Marvin M. Koenig, John A. Siegel Jr., Dennis A. Sadlowski, John A. Binko, and Michael C. Ryan.

B. Rennert and Renco

Unlike the newly-added defendants, Rennert and Renco have waived their right to object to personal jurisdiction, and I will deny the motion to dismiss as to them.

Personal jurisdiction is an individual right that may be waived. Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee , 456 U.S. 694, 703, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982). A person may submit to the jurisdiction of the court by appearance, by not timely raising the defense in an answer or responsive pleading, or by conduct that amounts to a "legal submission to the jurisdiction of the court, whether voluntary or not." Id. A "bald assertion" of lack of personal jurisdiction does not preserve the defense in perpetuity, as the defense may be lost by later conduct such as not timely seeking a ruling. Yeldell v. Tutt , 913 F.2d 533, 539 (8th Cir. 1990) (citing Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 168, 60 S.Ct. 153, 84 L.Ed. 167 (1939) ). Moreover, waiver of personal jurisdiction may occur when a defendant fails to object repeatedly "to the power of the court to act over the defendant's person." Alger v. Hayes , 452 F.2d 841, 844 (8th Cir. 1972).

Over the lengthy course of this litigation, Rennert and Renco never before asserted lack of personal jurisdiction. Their past actions are inconsistent with their present argument. For example, in opposing remand to state court the last time, defendants argued that jurisdiction would only be proper in this Court. ECF 38. They participated in motion practice in state court (including writs of prohibition and mandamus) and removed the case three times. See ECF 45. They filed an interlocutory appeal when I denied their request to stay these cases pending the arbitration with Peru, but successfully obtained a stay of the case while their appeal was pending. ECF 62, 71, 72. In their answers to the original petition, Rennert and Renco admitted that subject-matter jurisdiction and venue were proper in this Court, and never mentioned personal jurisdiction. ECF 81, 83. They participated in motion practice, numerous hearings, and very extensive discovery over a period of many years before ever raising this objection to personal jurisdiction. Their waiver of a personal-jurisdiction challenge could not be more unequivocal.

To the extent that defendants argue that the Bristol-Myers Squibb decision changed the law of personal jurisdiction and gave them a new chance to object to personal jurisdiction, they are wrong. In that case, more than 600 plaintiffs from 34 states brought suit in a California state court against a pharmaceutical company, alleging damage to their health from the drug Plavix. Bristol-Myers Squibb Co. v. Super. Ct. of Cal., San Francisco Cty. , --- U.S. ----, 137 S.Ct. 1773, 1777, 198 L.Ed.2d 395 (2017). The Supreme Court reversed a decision by the California Supreme Court, which had held that Bristol-Meyers was subject to personal jurisdiction in California for the claims of the non-California plaintiffs. Although personal jurisdiction existed over Bristol-Meyers for the claims of the California plaintiffs, there were insufficient California contacts between the defendant and the non-California plaintiffs as to those plaintiffs' claims. Id. at 1782-1783. The Supreme Court described this as a "straightforward application... of settled principles of personal jurisdiction[.]" Id. at 1783. In other words, it was not a new rule. Bristol-Myers certainly knew to make the argument, as did many other defendants who had unsuccessfully raised it in lower courts in similar mass tort cases involving out-of-forum plaintiffs. See, e.g., State ex rel. Bayer Corp. v. Moriarty, 536 S.W.3d 227 (Mo. banc 2017). Rennert and Renco could have raised the same argument, but they did not, and they have waived the right to challenge personal jurisdiction in Missouri.

In any event, Bristol-Myers does not change the fact that Rennert and Renco are subject to specific personal jurisdiction here, even aside from the waiver. The essence of plaintiffs' claims against Rennert and Renco is that they took actions in Missouri that caused injuries to the plaintiffs in Peru. Rennert and Renco had extensive contacts with Missouri. Rennert used Renco to structure the acquisition and financing of the La Oroya operation, he attended numerous meetings in Missouri to discuss the environmental cleanup in Peru, and he approved (and failed to approve) the funding and scheduling of that cleanup. Rennert's and Renco's alleged conduct constitutes transacting business in Missouri within the meaning of Missouri's long-arm statute. Mo. Rev. Stat. § 506.500.3. Rennert's and Renco's activities within and contacts with the state are sufficient to meet the state long-arm requirements and the due process requirements of the Fourteenth Amendment.

II. Failure to State a Claim

Defendants move to dismiss all of the plaintiffs' claims under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. In their response to the motion to dismiss, plaintiffs conceded that their Count VII, for contribution, fails even under Missouri law. I conclude that Counts V and VI fail to state a claim for strict liability. Counts III and IV fail to state a claim for civil conspiracy because only negligence claims remain and one cannot conspire to be negligent. Because these five claims fail even under Missouri law, I will dismiss them and need not consider the issues of piercing the corporate veil, comity, and determination of foreign law as to them.

When reviewing a Rule 12(b)(6) motion to dismiss, I must assume the allegations in the complaint to be true and construe the complaint in favor of the plaintiff. See Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555-56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; Huggins v. FedEx Ground Package Sys., Inc. , 592 F.3d 853, 862 (8th Cir. 2010) ; Anzaldua v. Northeast Ambulance & Fire Prot. Dist. , 978 F.Supp.2d 1016, 1021 (E.D. Mo. 2013). To survive a motion to dismiss, the complaint need not contain "detailed factual allegations," but it must contain facts with enough specificity "to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Specifically, to survive a motion to dismiss, a complaint must contain enough factual allegations, accepted as true, to state a claim for relief "that is plausible on its face." Twombly , 550 U.S. at 570, 127 S.Ct. 1955. The issue in determining a Rule 12(b)(6) motion is not whether the plaintiff will ultimately prevail, but whether it is entitled to present evidence in support of its claim. See Skinner v. Switzer , 562 U.S. 521, 529-30, 131 S.Ct. 1289, 179 L.Ed.2d 233 (2011) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) ).

I must accept the plaintiffs' factual allegations as true and construe them in plaintiffs' favor, but I am not required to accept the legal conclusions the plaintiffs draw from the facts alleged. Twombly, 550 U.S. at 555, 127 S.Ct. 1955 ; Retro Television Network, Inc. v. Luken Commc'ns, LLC , 696 F.3d 766, 768-69 (8th Cir. 2012). Drawing on my "judicial experience and common sense," I must consider the plausibility of each claim as a whole, not the plausibility of each individual allegation. Zoltek Corp. v. Structural Polymer Grp. , 592 F.3d 893, 896 n. 4 (8th Cir. 2010). In Twombly , the Supreme Court clarified that Rule 8(a)(2) requires complaints to contain "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action." Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ; accord Ashcroft v. Iqbal , 556 U.S. 662, 678-79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

A. Veil Piercing, Alter-Ego Liability, Internal Affairs Doctrine, and Agency

Defendants argue generally that all counts must be dismissed under the law of Peru. They argue that Peruvian law does not recognize theories of veil piercing, alter-ego liability, or agency liability. For the reasons that follow, I conclude that plaintiffs have adequately alleged a claim under the veil-piercing, alter-ego, and agency theories they assert.

The defendants remaining in Count I, which alleges negligence, are Rennert and the corporate defendants Renco, Doe Run Resources, DR Acquisition, and Cayman Holdings. Count II alleges negligence against remaining defendants Rennert, Kaiser, Neil, Zelms, and Fox. Count X alleges negligent performance of a contract or undertaking by defendants Doe Run Resources, Cayman Holdings, Kaiser, Neil, Zelms, and Fox. Count XI asserts negligent performance of an undertaking by defendants Renco, DR Acquisition, and Rennert. All of these counts seek to impose some sort of derivative or veil-piercing liability. Defendants seek to dismiss these counts for failure to adequately plead piercing the corporate veil, alter-ego liability, and agency. Defendants also urge that none of these concepts are recognized by Peruvian law.

Defendants first argue that under the "internal affairs doctrine" recognized by Missouri and New York, the Court must apply Peruvian law to these theories because non-party Doe Run Peru was incorporated in Peru.

The internal affairs doctrine is a conflict of laws principle which recognizes that only one State should have the authority to regulate a corporation's internal affairs - matters peculiar to the relationships among or between the corporation and its current officers, directors, and shareholders - because otherwise a corporation could be faced with conflicting demands.

Edgar v. MITE Corp., 457 U.S. 624, 645, 102 S.Ct. 2629, 73 L.Ed.2d 269 (1982). Some courts have interpreted this doctrine to mean that any consideration of whether the corporate veil could be pierced must be determined using the law of the state of incorporation. Defendants urge that under this doctrine the Court must use the law of Peru. Non-parties Doe Run Peru and Doe Run Mining are Peruvian companies, but under the facts of this case the Court would have to look at the law of Missouri and New York as well, because Cayman Holdings and DR Acquisition were established under Missouri law and Doe Run Resources and Renco were incorporated under New York law.

Defendants cite to cases supporting their premise that veil piercing requires "a court to examine the internal structure and administration of a corporation and its parents or affiliates[.]" ECF 843 at p. 16. Even so, this does not necessarily mean that veil piercing itself requires application of the internal affairs doctrine. The internal affairs doctrine provides that the law of the state of incorporation should be applied when internal corporate governance matters are at issue, to ensure uniform applications of law. Defendants' cases illustrate this. In In re Bridge Info. Sys., Inc. , the court noted that the internal affairs doctrine generally applies to disputes involving the administration or governance of a corporation. 325 B.R. 824, 830 (Bankr. E.D. Mo. 2005). That court determined that the veil-piercing claim, which involved a creditor's fraud claim against a controlling shareholder of the bankrupt corporation that resulted in direct injury to the corporation, would be governed by the law of the state of incorporation. Id. at 830-31.

Yates v. Bridge Trading Co. , 844 S.W.2d 56 (Mo. Ct. App. 1992), another case relied on by defendants, was an action brought by a stockholder against a Delaware corporation based on a stock purchase agreement that contained a Missouri choice-of-law provision. Discussing the internal affairs doctrine, the court recognized that the issuance of stock is part of the internal affairs of a corporation, which would "require[ ] the application of the laws of the state of incorporation." Id. at 61. The court, however, nevertheless noted the flexibility of the internal affairs doctrine as applied to pseudo-foreign corporations as well as the most-significant-relationship test used by other courts to apply local law to a foreign corporation's internal affairs, and determined that the internal affairs doctrine did not require application of Delaware law to the agreement in the circumstances of that case. Id. at 61-62. I also note that in other cases, courts have applied Missouri's veil-piercing law to out-of-state corporations without discussing the internal affairs doctrine. See, e.g., Weitz Co. v. MH Washington, 631 F.3d 510, 520-22 (8th Cir. 2011).

Comment e of the Restatement (Second) of Conflict of Laws § 302 explains that matters regarding a corporation's internal administration, such as the election or appointment of directors, the adoption of bylaws, the issuance of corporate shares, or cumulative voting requirements should be governed by a single law. Restatement (Second) of Conflict of Laws § 302 cmt. e (1971). This is because it would be impractical to have these sorts of internal matters, "which involve a corporation's organic structure or internal administration, governed by different laws." Id.

The purpose of the internal affairs doctrine would not be served by applying it to the veil-piercing claims here. This is not a case involving a fight among shareholders or over the election of corporate officers. Rather, the veil-piercing issue in this case relates to the way the various entities were operated in relation to one another and to Doe Run Peru. As the case does not involve any disputes about the internal affairs of the various defendants, Missouri law applies to the veil-piercing issues.

When one corporation dominates and controls another to the point where formal corporate separateness is no longer followed, the subordinate corporation becomes the "alter ego" of the parent. Weitz Co. , 631 F.3d at 520. The veil of the parent may be pierced and the separate formal corporate structures may be ignored when the "formal corporate separateness is used to accomplish a fraud, injustice, or some unlawful purpose." Id. To state a valid claim for veil piercing under Missouri law, one must show three elements: (1) control - meaning domination of finances, policy, and business practice so that the corporate entity had no will or existence of its own; and (2) such control perpetuated fraud or a wrong, a violation of a statutory or other positive duty, or an unjust act in breach of plaintiffs' rights; and (3) the control and subsequent breach of duty proximately caused the injury. Collet v. American Nat'l Stores, Inc. , 708 S.W.2d 273, 284 (Mo. Ct. App. 1986). Collet employs eleven factors that indicate the degree of control held by the parent corporation. Id. Any combination of the eleven factors could support the conclusion that a parent corporation controls a subsidiary corporation. Paglin v. Saztec Int'l, Inc. , 834 F.Supp. 1184, 1191 (W.D. Mo. 1993).

Similarly, under New York law, veil piercing is possible where "the owner exercised complete domination over the corporation with respect to the transaction at issue and such domination was used to commit a fraud or wrong that injured the party seeking to pierce the veil." Am. Fuel Corp. v. Utah Energy Dev. Co. , 122 F.3d 130, 134 (2nd Cir. 1997). Determinations of veil piercing are fact specific and courts may consider several factors, including the disregard of corporate formalities; inadequate capitalization; intermingling of funds; overlap in ownership, officers, directors, and personnel; and payment or guarantee of the corporation's debts by the dominating entity. Freeman v. Complex Computing Co. , 119 F.3d 1044, 1053 (2nd Cir. 1997).

The amended complaint alleges that Doe Run Cayman Ltd., Doe Run Mining, and Doe Run Peru were formed in 1997 for the purpose of acquiring the La Oroya Complex. Plaintiffs allege that defendants controlled these entities, including Doe Run Peru, through a series of intermediary companies, with defendants Renco and Rennert directly and indirectly owning all subsidiaries since 1997. ECF 474 ¶ 14. Renco owned DR Acquisition, which then owned Doe Run Resources. Id. at ¶ 15 and 16. From 1997 to 2001, Doe Run Peru was owned by a Peruvian subsidiary - Doe Run Mining. Id. at ¶ 33. Doe Run Mining was owned by Doe Run Cayman Ltd., which was wholly owned by Doe Run Resources. In June 2001, Doe Run Mining was dissolved, and Doe Run Cayman Ltd. directly held ownership of Doe Run Peru until 2007. Id. at ¶ 34. During this time before 2007, Doe Run Cayman Ltd. was directly owned by Doe Run Resources, which in turn was held by DR Acquisition, which was directly owned by Renco. Id. at ¶ 35. In February 2007, Doe Run Resources, through its parent DR Acquisition, transferred Doe Run Cayman Ltd. to a new Missouri holding company, Doe Run Cayman Holdings, LLC (referred to as "Cayman Holdings" in this Memorandum and Order). Id. at ¶ 17, 36-37. Later in March 2007, DR Acquisition transferred its interests in Cayman Holdings to Renco. Id. From 1997 to 2007, Renco and Rennert maintained ownership of these subsidiaries, including Doe Run Peru, through capital stock. Id. at ¶ 32. Moreover, plaintiffs have demonstrated control via the overlap of officers and directors serving on boards of subsidiaries simultaneously, with Rennert serving as chairman of Renco, Doe Run Resources, and DR Acquisition. ECF 474 ¶ 10, 18-22.

Plaintiffs allege that defendants controlled the policy and decision-making processes of Doe Run Peru through various agreements for professional, technical, and managerial services. ECF 474 ¶ 39-68. Plaintiffs specifically allege that defendant Doe Run Resources provided staff and equipment to, and managed the employees and operations of, the La Oroya Complex, which included: performing all human resources operations such as payroll, employee incentives programs, and training; managing metallurgical production and materials handling, smelting and refining, shipping, purchasing, sales, and transportation; managing external operations such as public relations and community relations, handling political issues, and coordinating with governmental entities; managing environmental controls, monitoring, and remediation; and training the personnel who handled environmental management, among many other things. ECF 474 ¶ 49. They allege that Renco provided operational services to Doe Run Resources that included management of production, operation, personnel, and finances; obtained insurance; filed taxes; and claimed the right to any benefit of business losses. ECF 474 ¶ 52-59. Plaintiffs allege that defendant Rennert personally approved all capital expenditures, financing for operations and maintenance, budgeting and forecasting, business organization and management, and intercompany agreements (including those for management and consulting services). Rennert is also alleged to have required daily reporting from Peru on certain issues, and to have controlled all corporate meetings, voting rights, and bylaws. ECF 474 ¶ 60-63.

These activities go far beyond the routine corporate "parental involvement"

that normally includes such things as " 'monitoring of the subsidiary's performance, supervision of the subsidiary's finance and capital budget decisions, and articulation of general policies and procedures.' " Masterson Pers., Inc. v. The McClatchy Co. , No. Civ. 05-1274RHKJJG, 2005 WL 3132349, at *5 (D. Minn. Nov. 22, 2005) (quoting United States v. Bestfoods , 524 U.S. 51, 72, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998) ). Instead, plaintiffs here allege that, through these agreements and in other ways, defendants controlled the day-to-day affairs of Doe Run Peru's business. ECF 474 ¶ 49, 59. These allegations include a majority of the Collet factors. If defendants were performing this level of management of Doe Run Peru and the La Oroya Complex, then a factual basis for the "control prong" is satisfied. See Kleweis v. Transp. Support, Inc. , 972 F. Supp. 494, 496 (E.D. Mo. 1997) (control prong satisfied when plaintiffs provided evidence of policy promulgation, approval of budgets, and controlling "strategic direction" of the subsidiary).

The second element required to pierce the corporate veil is whether control was used to "commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention of plaintiff's legal rights." Collet , 708 S.W.2d at 284. Plaintiffs allege that defendants, for their own financial benefit, caused significant environmental damages at La Oroya. ECF 474 ¶ 70, 77-83, 92. Undercapitalizing a subsidiary by creating it and then operating it without a sufficient supply of money can serve as a proxy for this element. Radaszewski by Radaszewski v. Telecom Corp., 981 F.2d 305, 308 (8th Cir. 1992). Plaintiffs allege that the undercapitalization of Doe Run Peru left the company unable to implement environmental protection measures. ECF 474 ¶ 94-96. These allegations suggest an "improper purpose," which may exist when a corporation operates "without sufficient funds to meet obligations to those who must deal with it[.]" May Dep't Stores Co. v. Union Elec. Light & Power Co. , 341 Mo. 299, 107 S.W.2d 41, 55 (1937). Plaintiffs' allegations satisfy the second element required by Collet .

Finally, plaintiffs must allege that the control and breach of duty proximately caused their injury. Collet , 708 S.W.2d at 284. Plaintiffs have alleged that it was foreseeable that the lack of pollution-control technology could result in harm because of the danger from un-remediated toxic emissions. Generally, causation is a question of fact. Schaub v. VonWald , 638 F.3d 905, 921 (8th Cir. 2011). Here plaintiffs sufficiently alleged this element. Plaintiffs have satisfied all three elements under Collet ; therefore their theories of veil piercing are adequately pled under Missouri and New York law because of the overlap of factors that support the basis for a claim.

I also conclude that, contrary to defendants' arguments, Peruvian law could allow veil piercing under these allegations. Instead of having an expressed doctrine as recognized by common law courts, Peruvian law has a form of indirect liability derived from misfeasance. As explained by plaintiffs' expert, a Peruvian lawyer and law professor, the lack of a codified positive legal rule does not preclude derived liability from fraudulent misfeasance under Article 96 of the Civil Code because entities that are organized via "legal fraud" violate the public order, thereby allowing for dissolution of the entity similar to veil piercing. ECF 871-121, Espinoza Report at ¶ 5.12. It may be possible to disregard the purpose of limited liability when members of the corporate entity do not act in good faith and the corporate entity frustrates economic expectations associated with the makeup of the legal entity. Id. at ¶ 5.16 n.4. An example of this can occur when fraudulent (unlawful) conduct materializes by harming creditors' economic expectations. Id. When applied in the context of Doe Run, this is the sort of activity at the heart of plaintiffs' claims - the La Oroya Complex was an undercapitalized corporate entity directly controlled by defendants, and the undercapitalization resulted in plaintiffs' harm.

Plaintiffs also plead theories of agency as a basis for liability. A principal-agent relationship between two corporate entities is established when there is such domination and control "that the controlled corporation has no separate mind, will or existence of its own and is but a business conduit for its principal." Blackwell Printing Co. v. Blackwell-Wielandy Co. , 440 S.W.2d 433, 437 (Mo. 1969). The following elements show an agency relationship: the agent has the power to alter legal relations, the agent is a fiduciary within the scope of matters entrusted to it, and a principal has a right to control the conduct of the agent. Blanks v. Fluor Corp. , 450 S.W.3d 308, 382-383 (Mo. Ct. App. 2014) (quoting State ex rel. Ford Motor Co. v. Bacon, 63 S.W.3d 641, 642 (Mo. banc 2002) ). New York law is similar; three elements are necessary to show an agency relationship: a manifestation the agent shall act, an acceptance of the undertaking, and an understanding that the principal controls the undertaking. In re Rubin Bros. Footwear, Inc. , 119 B.R. 416, 422 (Bankr. S.D.N.Y. 1990). An agency relationship cannot be established where the alleged principal lacks control over the alleged agent. In re Shulman Transp. Enter., Inc. , 744 F.2d 293, 295 (2nd Cir. 1984).

As noted above, the overlap of common directors, control of business operations, and total ownership of the chain of subsidiaries demonstrate a factual allegation of control by defendants to establish an agency relationship over Doe Run Peru. Sedalia Mercantile Bank & Trust Co. v. Loges Farms, Inc. , 740 S.W.2d 188, 202-03 (Mo. Ct. App. 1987) (concluding an agency relationship did not exist because the parent only required its subsidiary to follow guidelines and the parent did not direct operations, thus the relationship was not total, actual, and participatory). An agent is a fiduciary for matters within the scope of the agency, and once the agency relationship is established, a fiduciary relationship arises as a matter of law. Int'l Envtl. Mgmt., Inc. v. United Corp. Servs., Inc. , 858 F.3d 1121, 1125 (8th Cir. 2017). "To adequately allege an actual agency relationship, a plaintiff need only allege facts sufficient to support a reasonable inference of actual authority." Skanga Energy & Marine Ltd. v. Arevenca S.A. , 875 F.Supp.2d 264, 269 (S.D.N.Y. 2012). Plaintiffs have pled facts to establish an inference of authority; therefore, defendants' argument for a lack of agency relationship fails.

Plaintiffs' allegations also state a basis for liability under Article 1981 of the Peruvian Civil Code. When a subordinate relationship exists - meaning when the subordinate acts on behalf of the parent - and results in damage, then the parent may be liable for the acts of the subordinate. ECF 871-121, Espinoza Report at ¶ 5.24. This type of relationship is a low bar, only requiring a "causal relationship" between the parties. Id. at ¶ 5.25. Thus, if it is possible to exercise power over a party, then a subordinate relationship is present because of the mere existence of the relationship and the exercise of control. The relationship between defendants and Doe Run Peru qualifies as a "subordinate" relationship because Doe Run Peru acted on behalf of its owners. Liability is established when there is the mere existence of a relationship between the principal and agent. Id. at ¶ 5.26. When a party directs another to act, and the latter causes damages while performing those duties, then the "direct principal and the vicarious principal are subject to joint liability." Id. at ¶ 5.27. Peruvian law recognizes liability arising under agency principles.

For the reasons stated above, plaintiffs have adequately pled theories of liability premised on alter-ego/piercing the corporate veil and agency sufficient to withstand dismissal under Rule 12(b)(6), whether considered under Missouri, New York, or Peruvian law.

B. Negligence (Counts I and II)

Counts I and II allege that defendants owed a duty to the plaintiffs to control the toxic substances generated by the La Oroya Complex, to ensure that all were within safe levels, and to remediate and warn plaintiffs to prevent their being harmed. These counts allege that the defendants negligently and recklessly handled the wastes, resulting in damage to the plaintiffs.

To state a claim for negligence under Missouri law, the plaintiff must allege that the defendant had a duty of care to protect the plaintiff from injury, the defendant failed in performing the duty, and the defendant's failure proximately caused harm to the plaintiff. Lopez v. Three Rivers Elec. Co-op., Inc. , 26 S.W.3d 151, 155 (Mo. banc 2000). A duty of care to a plaintiff may hinge upon whether the defendant should have foreseen a risk in a given set of circumstances. Taylor v. Dale-Freeman Corp. , 389 S.W.2d 57, 61 (Mo. 1965). That being said, "foreseeability alone is not enough to establish a duty." Stitt by Stitt v. Raytown Sports Ass'n , 961 S.W.2d 927, 930 (Mo. Ct. App. 1998). There must be "some right or obligation to control the activity which presents the danger of injury." Id. ; see also Pippin v. Hill-Rom Co. , 615 F.3d 886, 890 (8th Cir. 2010). A company owes a duty of care to the population of a given area to guard against the careless release of toxic pollutants and other residues of their production process. Elam v. Alcolac, Inc. , 765 S.W.2d 42, 175 (Mo. Ct. App. 1988). New York law is essentially the same: "Negligence is the absence of care, according to the circumstances." Palsgraf v. Long Island R. Co. , 248 N.Y. 339, 162 N.E. 99, 99 (1928) (internal quotation marks and citation omitted).

Count I specifically alleges that Renco, Doe Run Resources, DR Acquisition, Cayman Holdings, and Rennert exerted complete control over the Peruvian subsidiaries and the La Oroya Complex and negligently and recklessly generated, stored, and failed to control toxic wastes from the mine, resulting in injury to the plaintiffs. It also alleges that these defendants failed to warn the plaintiffs of the foreseeability of damage from defendants' handling of the toxic wastes.

Count II alleges that defendants Rennert, Kaiser, Neil, Zelms and Fox knew of and personally participated in the tortious acts of the defendant corporations. It specifically alleges that these defendants were involved in the budgeting processes for the Complex, including setting environmental goals and the pollution-control budget; knew of available technologies that would have remediated the damage but failed to use them; knew of the toxic releases but failed to notify plaintiffs or others in the surrounding community; delayed implementation of proper pollution controls; and withheld information regarding the dangers of the toxic emissions.

Plaintiffs' allegations are sufficient to state plausible claims of negligence against these defendants under either Missouri or New York law.

Plaintiffs' allegations also plausibly state a claim of negligence under Articles 1985 and 1981 of the Civil Code of Peru. Article 1981 creates a broad duty of care for those engaged in "the exercise of their duties" when "another person under his command is responsible for said damage" of a person. ECF 871-121, Espinoza Report at ¶ 5.52. Defendants were directly or indirectly responsible for the La Oroya Complex and the alleged discharge of pollutants. Article 1985 is analogous to both direct cause and proximate cause, two essential elements for a claim of negligence. To establish a claim under Article 1985, the harm must be directly attributed to the defendants' conduct and "probability judgment." This judgment is measured by what a person of normal mentality (similar to a reasonable person) could have foreseen because of his or her actions when assessed in the abstract. Id. at ¶ 5.60. Plaintiffs allege that their harm was a foreseeable consequence when defendants allegedly failed to implement measures to reduce environmental harm. Id. at ¶ 5.62. Article 1985 assesses damages for any consequences derived from the action or omission that generated the harm. Id. at ¶ 5.61. Additionally, Articles 142.1 and 142.2 of the General Environmental Law create a right of action against anyone that causes damage to the environment or human health, specifically defining environmental damage as "any material impairment suffered by the environment... that may be caused through the breach of legal provisions and which results in actual or negative potential effects." ECF 871-121, Espinoza Report at ¶ 5.46. The reference to breach of legal provisions is similar to the breach of duty required under American negligence law. Read together these Articles indicate that Peru recognizes claims analogous to negligence.

Counts I and II of the amended complaint thus allege plausible claims under Missouri, New York, and Peruvian law, and survive dismissal under Rule 12(b)(6).

C. Strict Liability (Counts V and VI)

Counts V and VI of the amended complaint allege absolute or strict liability. Plaintiffs argue that defendants' activities, which included the smelting, refining, and processing of heavy metals, are analogous to blasting operations or the release of radioactive emissions, and thus constitute an abnormally dangerous activity.

Missouri courts have applied the tort of strict liability for ultrahazardous or abnormally dangerous activities "very narrowly." Bennett v. Mallinckrodt, Inc. , 698 S.W.2d 854, 868 (Mo. Ct. App. 1985). In fact, the only "abnormally dangerous" activities that Missouri courts have found sufficient to state a claim for strict liability are activities involving nuclear materials, such as in Bennett , and blasting, such as in Clay v. Mo. Highway & Transp. Comm'n, 951 S.W.2d 617 (Mo. Ct. App. 1997). For other activities, claims must be based on other torts such as negligence, nuisance, or trespass. Bennett, 698 S.W.2d at 868. See, e.g., Rychnovsky v. Cole, 119 S.W.3d 204 (Mo. Ct. App. 2003) (failure to maintain gravity flow sewer line must be brought as negligence, nuisance, trespass, or ejectment action); Scott v. Dyno Nobel, Inc. , No. 3:13-cv-5032-DGK, 2017 WL 395298 (W.D. Mo. Mar. 9, 2016) (claim for injury from toxic emissions from ball bearing plant is really a negligence claim that plant was not operated properly); Wilson Road Dev. Corp. v. Fronabarger Concreters, Inc., 971 F. Supp. 2d 896, 916-17 (E.D. Mo. 2013) (claims about land-moving activities were really complaints about the manner in which the activities were conducted, which is a claim of negligence, not strict liability).

A review of the factors listed in the Restatement (Second) of Torts (1977), on which Missouri courts have relied, shows why this tort is so difficult to plausibly allege. Those factors are: (a) existence of a high degree of risk of some harm to the person, land, or chattels of others; (b) likelihood that the harm that results from it will be great; (c) inability to eliminate the risk by the exercise of reasonable care; (d) extent to which the activity is not a matter of common usage; (e) inappropriateness of the activity to the place where it is carried on; and (f) extent to which its value to the community is outweighed by its dangerous attributes. Restatement (Second) of Torts § 520 (1977).

Plaintiffs simply allege that the "ownership, operation, maintenance, management, handling, processing and use of metals and gases and other toxic substances" at the La Oroya Complex "constitute an abnormally dangerous activity or ultra-hazardous activity, because such activities create a high risk of significant harm." ECF 474 ¶ 144, 151. They have thus alleged only one of the factors listed under the Restatement - the high risk of harm. They do not attempt to allege that the risk cannot be eliminated through the exercise of reasonable care or that lead mining is not a common activity, or any of the other Restatement factors. In their brief they argue that "routine maintenance" would not have eliminated the risk (ECF 640 at p. 169), but this is not the test. Even if "routine" maintenance would not eliminate the risk, this cannot be a strict liability claim if "reasonable care" would have done so. Indeed, in the same paragraph of their brief, plaintiffs go on to argue that defendants could have lessened the risk had they "implement[ed] suitable technologies and processes to prevent the pollution and contamination." Id. This is a negligence allegation, not an allegation that the activity is so unusual and so unreasonably dangerous that its hazards cannot be eliminated through the exercise of reasonable care. Counts V and VI fail to state claims under Missouri law.

Plaintiffs make no attempt to argue that their allegations are sufficient to state a claim under New York law, and my review of New York law shows that the allegations here are not sufficient to proceed. New York also considers the Restatement factors; and while New York courts do not always require factual allegations showing that all six factors support the claim, more than a bald assertion of danger is required. See, e.g., Town of New Windsor v. Avery Dennison Corp., No. 10-CV-8611(CS), 2012 WL 677971 (S.D.N.Y. Mar. 1, 2012) (denying motion to dismiss where complaint plausibly alleged facts supporting all but one Restatement factor).

Because the strict liability counts fail to state a claim even under Missouri or New York law, I need not consider whether a similar claim could survive under Peruvian law.

D. Direct Participation Liability, Breach of Assumed Duties, Negligent Performance of a Contract or Undertaking (Counts VIII, IX, X, XI, and XII)

Count VIII (brought against defendants Doe Run Resources, Cayman Holdings, Kaiser, Neil, Zelms, and Fox) and Count IX (brought against defendants Renco, DR Acquisition, and Rennert) are both titled "Direct Liability for Breach of Assumed Duties Pertaining to Foreseeable Harms."

Count X (against defendants Doe Run Resources, Cayman Holdings, Kaiser, Neil, Zelms, and Fox) and Count XI (against defendants Renco, DR Acquisition, and Rennert) are both titled "Negligent Performance of a Contract or Undertaking." Count XII is brought against defendants Renco and Rennert and is titled "Direct Participation Liability."

All five counts allege in some manner that the named defendants assumed the operation of the La Oroya Complex and in doing so assumed duties of care to plaintiffs. These counts allege that the defendants' breach of these duties of care caused the plaintiffs' injuries from toxic emissions. Counts VIII, IX, and XII allege that defendants are directly liable for their actions and those of their agents. Counts X and XI appear to allege derivative liability arising from various express contractual undertakings (Count X) or from financial agreements among the corporate entities (Count XI). All counts list various environmental, financial and management activities that they allege defendants negligently performed or failed to perform, and all counts make allegations related to underfunding the Complex or avoiding costs of environmental improvements. All counts allege that these actions were taken to financially benefit the parent corporations and the individual defendants to the detriment of Doe Run Peru and the Complex.

Despite the titles to Counts X and XI referring to negligent breach of contract, plaintiffs urge that all five of these counts are based only on negligence, not on contract. In general, neither Missouri nor New York law recognizes claims brought by non-parties to a contract for negligent breach of a contract. See, e.g., Fleischer v. Hellmuth, Obata & Kassabaum, Inc., 870 S.W.2d 832, 834 (Mo. Ct. App. 1993) ; see also Hardcore Concrete, LLC v. Fortner Ins. Servs., Inc., 220 S.W.3d 350 (Mo. Ct. App. 2007) ; 532 Madison Ave. Gourmet Foods, Inc. v. Finlandia Ctr., Inc., 96 N.Y.2d 280, 727 N.Y.S.2d 49, 750 N.E.2d 1097 (2001). Of course, third-party beneficiaries can sue for breach of contract when "the terms of the contract... express directly and clearly an intent to benefit an identifiable person or class." L.A.C. ex rel. D.C. v. Ward Parkway Shopping Ctr. Co., L.P. , 75 S.W.3d 247, 260 (Mo. banc 2002) (internal quotation marks and citation omitted). But that is not the same as a claim of negligent breach of contract that could be brought by an "unlimited number, or indeterminate class, of potential claimants[.]" Fleischer , 870 S.W.2d at 835 (citing Westerhold v. Carroll, 419 S.W.2d 73, 79 (Mo. 1967) ).

Both Missouri and New York law have, however, recognized that a party may, through contract or otherwise, assume a duty toward a person who is not party to the underlying transaction; and if a duty is so assumed, a defendant must exercise reasonable care. Kraus v. Hy-Vee, Inc., 147 S.W.3d 907, 924 (Mo. Ct. App. 2004) (company that conducted traffic study that failed to recommend traffic light assumed duty to person killed at unsignaled intersection); Espinal v. Melville Snow Contractors, Inc., 98 N.Y.2d 136, 746 N.Y.S.2d 120, 773 N.E.2d 485, 487-88 (2002) (describing situations where New York law provides tort liability to third persons not in privity of contract). Both states have recognized that Section 324A of the Restatement (Second) of Torts provides the analytical framework for whether a defendant has assumed a duty toward a third person. Berliner v. Milwaukee Electric Tool Corp. , 501 S.W.3d 59, 67 (Mo. Ct. App. 2016) (company providing safety services at power plant assumed duty to workers); Espinal, 746 N.Y.S.2d 120, 773 N.E.2d at 488. Section 324A states:

One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if

(a) his failure to exercise reasonable care increases the risk of such harm, or

(b) he has undertaken to perform a duty owed by the other to the third person, or

(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.

Restatement (Second) of Torts § 324A (1965). When a defendant undertakes an activity that the defendant knows can affect the safety of third persons, the defendant has a duty of care to those third persons "to act in such a way that they will not be injured." Wolfmeyer v. Otis Elevator Co. , 262 S.W.2d 18, 22 (Mo. 1953). A contractual obligation can be relevant in a negligence action to determine what duties defendant has undertaken, see id. at 21, but that does not necessarily translate into a claim for breach of the contract, whether negligently or intentionally. See L.A.C., 75 S.W.3d 247.

It appears that Peruvian law recognizes somewhat similar types of claims. Under Articles 1314 and 1327, there exists a similar cause of action to breach of assumed duties. Article 1314 states: "Anyone who acts with the required ordinary diligence is not liable for a failure to meet an obligation, or its partial, late or defective completion." ECF 871-121, Espinoza Report ¶ 5.82. Article 1327 provides that there will be no compensation available if an alleged tortfeasor used "ordinary diligence." Id. at ¶ 5.83. Ordinary diligence is analogous to a reasonable care standard because in assuming the duty to act, a party must do so "with the act of protecting an obligation," which requires an assessment of attention and caution to a set of characteristics. Id. at ¶ 5.84-5.85. Assuming the duty requires acting with reasonable care under the circumstances. Articles 1969, 1981, and 1983 impose extra-contractual liability on individuals and corporations, and when combined with Article 1314, the same liability can apply to third parties when individuals or corporations assume a duty via contract. ECF 871-121, Espinoza Report at ¶ 5.86. Moreover, Article 1457 allows for extra-contractual liability claims to proceed in conjunction with Articles 1969, 1981 or 1983 because Article 1457 provides an action for negligence in fulfilling the duty if a task for the benefit of a third person occurs in a contract. Id. at ¶ 5.88-5.90. Peruvian law recognizes an analogous claim to breach of assumed duties because both Missouri and Peru consider the harm done to third parties with respect to an acquired obligation.

All five counts here adequately allege that defendants undertook certain activities, and then were negligent in performing them. Although they are overlapping and somewhat difficult to distinguish from one another, they are each sufficient to state a claim on which relief can be granted.

As noted above in the section discussing piercing the corporate veil, Counts VIII, IX, and XII allege that the defendants named in those counts are directly liable to plaintiffs. Direct liability of this sort is supported by United States v. Bestfoods , 524 U.S. 51, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998), which recognized that a parent corporation could be directly liable for a CERCLA violation as an "operator" as that term is used in 42 U.S.C. § 9601(20)(A)(ii). The Court in Bestfoods distinguished this type of liability from derivative or veil-piercing liability, 524 U.S. at 67-68, 118 S.Ct. 1876, and held that CERCLA did not change the existing common law of direct liability that can apply when " 'the alleged wrong can seemingly be traced to the parent through the conduct of its own personnel and management' and 'the parent is direct a participant in the wrong complained of.' " Id. at 64, 118 S.Ct. 1876 (quoting Douglas & Shanks, Insulation from Liability through Subsidiary Corporations , 39 Yale L. J. 193, 207-08 (1929) ). As the Supreme Court noted, "it is entirely appropriate for directors of a parent corporation to serve as directors of its subsidiary, and that fact alone may not serve to expose the parent corporation to liability for its subsidiary's acts." Id. at 69, 118 S.Ct. 1876 (internal quotation marks and citation omitted). It is presumed that directors are wearing their "subsidiary hats," instead of their "parent hats" when acting on behalf of the subsidiary. Id. This presumption is strongest when an officer is acting consistently with corporate norms, but "wanes as the distance from those accepted norms approaches the point of action by