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Leslie A. Taborac v. Nisource

October 21, 2011

LESLIE A. TABORAC, PLAINTIFF,
v.
NISOURCE, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Peter C. Economus

MEMORANDUM OPINION AND ORDER

OPINION AND ORDER

This matter is before the Court upon the Motion to Dismiss of Defendants NiSource, Inc., NiSource Corporate Services, Columbia Gas of Ohio, and Don Ayers. (Doc. # 4.) Plaintiff Leslie A. Taborac filed a memorandum in opposition*fn1 (doc. # 9), to which Defendants filed a reply (doc. # 10). Defendants' motion seeks dismissal of all of Plaintiff's claims. For the following reasons, this Court hereby GRANTS Defendants' motion.

I. FACTS*fn2

Plaintiff was a 31-year employee of Defendant Columbia Gas ("Columbia Gas"). (2d Am. Compl., doc. # 9-1, && 2, 7.) Columbia Gas acted as an agent of Defendants NiSource, Inc. ("NiSource") and NiSource Corporate Services ("NCS"), and Defendant Don Ayers was Plaintiff's supervisor and manager at Columbia Gas. (Id. at && 5, 6.) According to Plaintiff, Defendants NCS, Columbia Gas, and Ayers engaged "in continuing predicate acts" for the "purposes of shielding NiSource, Inc. and its subsidiaries from PUCO regulatory scrutiny[.]" (Id. at & 64.) The alleged "predicate acts" stemmed from two incidents. First, "Defendants Columbia Gas of Ohio, NCS, and NiSource . . . combined to further the goals of the enterprise in shielding itself from PUCO regulatory scrutiny and sanctions" by entering into a "settlement agreement" regarding Plaintiff's claims of sexual harassment by a PUCO inspector. (Id. at & 68.) Second, Defendants Columbia Gas, Ayers, NiSource, and NCS created "an express or tacit agreement to mislead PUCO investigators in a safety compliance audit of Columbia Gas of Ohio by falsely blaming Plaintiff for . . . safety regulatory non-compliance at . . . pipelines subject to PUCO audit." (Id. at & 66.)

Columbia Gas terminated Plaintiff from her position at Columbia Gas, allegedly for falsifying inspection documents. (Id. at & 28.) Plaintiff claims that the reasons provided for her termination were "pretext" for a discriminatory employment action, and she claims that Defendants "acquiesced" in the PUCO investigator's sexual harassment. As a result, she brings five state-law claims against all the defendants: Counts One, Two, and Four for actions allegedly in violation of Ohio Revised Code § 4112.02 et seq.; Count Three for intentional infliction of emotional distress; and Count Five for breach of a corporate anti-discrimination and harassment policy. (Id., && 41 -- 63.) Plaintiff also claims that Defendants' conduct violated Ohio Revised Code § 2905.11(A)(5) (extortion), 18 U.S.C. § 1512(b) (witness tampering), and 18 U.S.C. § 1589(a)(3) (forced labor). Those violations, she claims, form the basis of Count Six, a claim under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), as codified in 18 U.S.C. § 1961 -- 1968 (2006). (Id. at && 64 -- 74.)

II. LAW AND DISCUSSION

A. Jurisdiction

As a threshold matter, Defendants argue that this Court lacks subject matter jurisdiction because Plaintiff has "concoct[ed] a RICO claim that has no factual or legal basis." (Motion, page 3.) Defendants assert that Plaintiff's RICO claim is merely just a jurisdictional grab, and, in fact, "the gravamen of Plaintiff's complaint is the alleged wrongful termination of her employment with Columbia Gas." (Id. at page 8.)

Dismissal for lack of subject-matter jurisdiction because of the inadequacy of the federal claim is proper only when that claim is "so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy." Hamdi v. Napolitano, 620 F.3d 615, 624 (6th Cir. 2010) (citing Primax Recoveries, Inc. v. Gunter, 433 F.3d 515, 519 (6th Cir. 2006) (quoting Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89 (1998)).

Section 1331 of Title 28 of the United States Code grants federal district courts subject-matter jurisdiction over all claims "arising under" federal law. Cobb v. Contract Transport, 452 F.3d 543, 548 (6th Cir. 2006) (citing Arbaugh v. Y& H Corp., 546 U.S. 500 (2006)). "A claim arises under federal law when the plaintiff's statement of his own cause of action shows that it is based upon federal laws or the federal Constitution." Id. at 548 (citing Louisville & N.R. Co. v. Mottley, 211 U.S. 149, 152 (1908) (internal quotation marks and brackets omitted)); see also Bell v. Hood, 327 U.S. 678, 681 (1946) ("Before deciding there is no jurisdiction, the district court must look to the way the complaint is drawn to see if it is drawn so as to claim a right to recover under the Constitution and the laws of the United States. For to that extent, 'the party who brings a suit is master to decide what law he will rely upon, and . . . does determine whether he will bring a suit 'arising under the [Constitution or laws] of the United States by his declaration or bill."). Although there are exceptions to the well-pleaded complaint rule, including, as noted by Defendants, where a plaintiff has made a claim "solely for the purpose of obtaining jurisdiction," Cobb, 452 F.3d at 548 -- 49, this Court cannot say that Plaintiff's RICO claim was made "solely" for the purpose of obtaining jurisdiction. Further, "a plaintiff need not be entitled to relief under federal law in order for a district court to exercise subject matter jurisdiction." Id. at 549, citing Bell v. Hood, 327 U.S. at 685. To find that this Court lacks subject matter jurisdiction over Plaintiff's RICO claim would be to "erroneously conflate[ ] subject-matter jurisdiction with failure to state a claim upon which relief may be granted." Id. This Court certainly has subject-matter jurisdiction over RICO claims, and there is insufficient evidence in the pleadings to determine that Plaintiff's RICO claim was made "solely" for the purpose of obtaining jurisdiction. As a result, this Court finds that it has subject-matter jurisdiction. Thus, dismissal under Fed.R.Civ.P. 12(b)(1) would not be appropriate. However, for the reasons set forth below, this Court concludes that dismissal under Fed.R.Civ.P. 12(b)(6) is appropriate.

B. Standard for Granting Motion to Dismiss

Rule 12(b)(6) of the Federal Rules of Civil Procedure provides that a complaint may be dismissed if it fails to state a claim upon which relief can be granted. Because a motion under Rule 12(b)(6) is directed solely to the complaint itself, Roth Steel Prods. v. Sharon Steel Corp., 705 F.2d 134, 155 (6th Cir. 1983), the focus is on whether the plaintiff is entitled to offer evidence to support the claims, rather than on whether the plaintiff will ultimately prevail. Jackson v. Birmingham Bd. of Educ., 544 U.S. 167, 184 (2005) (citing Scheuer v. Rhodes, 4l6 U.S. 232, 236 (1974)). The purpose of a motion to dismiss under Rule 12(b)(6) "is to allow a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint is true." Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993). If there is an absence of law to support the type of claim made, or if the facts alleged are insufficient to state a valid claim, or if on the face of the complaint there is an insurmountable bar to relief, dismissal of the action is proper.Little v. UNUM Provident Corp., 196 F. Supp.2d 659, 662 (S.D. Ohio 2002) (citing Rauch v. Day & Night Mfg. Corp., 576 F.2d 697 (6th Cir. 1978)).

The function of the complaint is to afford the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests. See Conley v. Gibson, 355 U.S. 41, 47 (1957); Lewis v. ACB Business Serv., Inc., 135 F.3d 389, 405 (6th Cir. 1998). A complaint need not set down in detail all the particularities of a plaintiff's claim. Rule 8(a)(2) of the Federal Rules of Civil Procedure requires only a "short and plain statement of the claim showing that the pleader is entitled to relief." However, "Rule 8 . . . does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 1949. See also Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) ("A formulaic recitation of the elements of a cause of action" is not enough). The complaint "must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory." Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir. 1988) (emphasis in original).

Legal conclusions "must be supported by factual allegations" that give rise to an inference that the defendant is, in fact, liable for the misconduct alleged. Iqbal, 129 S.Ct. at 1949-50. The factual allegations must show more than a possibility that the defendant acted unlawfully. "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of 'entitlement to relief.'" Id. at 1949 (quoting Twombly, 550 U.S. at 557).

When considering a motion to dismiss pursuant to Rule 12(b)(6), the court must construe the complaint in the light most favorable to the plaintiff and accept all well-pleaded material allegations in the complaint as true. See Scheuer, 4l6 U.S. at 236; Arrow v. Federal Reserve Bank of St. Louis, 358 F.3d 392, 393 (6th Cir. 2004); Mayer, 988 F.2d at 638. The court will indulge all reasonable inferences that might be drawn from the pleading. See Saglioccolo v. Eagle Ins. Co., 112 F.3d 226, 228 (6th Cir. 1997). However, it will not accept conclusions of law or unwarranted inferences cast in the form of factual allegations. See Gregory v. Shelby County, 220 F.3d 433, 446 (6th Cir. 2000); Lewis, 135 F.3d at 405.

C. The Racketeering Influenced and Corrupt Organizations Act

Although RICO was passed as part of an initiative that specifically targeted organized crime and mob activity, see United States v. Turkette, 452 U.S. 576, 589 n.11 (1981), the Supreme Court has recognized that RICO reaches racketeering activity committed by legitimate businesses and organizations as well. Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 498-99 (1985) ("RICO was an aggressive initiative to supplement old remedies and develop new methods for fighting crime. . . . [RICO can be] used against respected businesses allegedly engaged in a pattern of specifically identified criminal conduct."). Section 1964(c) creates a civil cause of action and treble damages for "[a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter." Section 1962(c), which forms the basis for Plaintiffs' claim, provides that: "It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity . . . ."

1. PLAINTIFF'S RICO CLAIM

a. Plaintiff allegations of predicate acts fall well short of any pleading standard

To state a § 1962(c) RICO claim, a plaintiff must plead a person's "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." Sedima, 473 U.S. at 496; Moon v. Harrison Piping Supply, 465 F.3d 719, 723 (6th Cir. 2006); see also Salinas v. U.S., 522 U.S. 52, 62 (1997). "Racketeering activity" is defined in 18 U.S.C. § 1961(1) as any one of a numerous list of state and federal offenses. A pattern of racketeering activity "is proved by evidence of the requisite number of acts of racketeering committed by the participants in the enterprise." Turkette, 452 U.S. at 583. Title 18 U.S.C. § 1961(5) requires at least two racketeering acts or "predicate acts." Here, Plaintiff alleges that the Defendants violated RICO through the commission of three predicate ...


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