United States District Court, N.D. Ohio, Eastern Division
STATE EX REL. WOODRIDGE LOCAL SCHOOLS, et al., Plaintiffs,
FACEBOOK, INC., Defendant.
R. ADAMS, UNITED STATES DISTRICT JUDGE.
matter is before the Court on the motion of Defendant
Facebook, Inc. to dismiss the Amended Complaint of Woodridge
Local Schools, Cuyahoga Falls City School District, City of
Dayton Public Schools, Logan Hocking Local School District,
Springfield City School District, Lake Local School District,
Toledo City School District, and Northern Local School
District (collectively, “Plaintiffs”). Defendants
request dismissal for lack of subject matter jurisdiction
pursuant to Fed.R.Civ.P. 12(b)(1), and for failure to state a
claim under Fed R. Civ. P. 12(b)(6). Having considered the
parties' arguments, the evidence, and applicable law, the
Court hereby ORDERS that the motion to dismiss (Doc. 11) is
GRANTED, for the reasons set forth below.
(the Electronic Classroom of Tomorrow) was a community, or
charter, school under Ohio law. Plaintiffs are school
districts which had resident students enrolled in ECOT at the
time ECOT ceased operations in January of 2018. Plaintiffs
allege that in the six years prior to ECOT's closure,
ECOT received large amounts of money that otherwise would
have been paid to Plaintiffs but for the enrollment of these
students in ECOT. Plaintiffs contend that they lost millions
of dollars to ECOT during this timeframe. Plaintiffs further
allege that educational opportunities, such as additional
teachers, were lost by Ohio's public school districts as
a result of ECOT's “massive” overbilling of
proceedings in 2017 and 2018 determined that ECOT owed money
to the State of Ohio for funds it had improperly received.
ECOT became insolvent and liquidation proceedings were
initiated in January 2018 to preserve its assets. A special
master was appointed to handle ECOT's assets, including
its potential claims.
special master sought court approval to assign claims to the
State of Ohio. The court approved the special master's
motion for assignment of claims to the State. Subsequently,
the same eight school districts that are Plaintiffs here,
represented by the same counsel as in this matter, requested
an assignment of ECOT's claims arising out of payments
made to various entities. The court denied Plaintiffs'
motion as it had already assigned ECOT's claims to the
State of Ohio brought a lawsuit asserting claims relating to
ECOT's collapse on August 21, 2018. Plaintiffs attempted
to intervene in the action. The court again denied
Plaintiffs' attempt to pursue ECOT's claims, finding
that the schools' interests were adequately represented
by the State.
Plaintiffs again seek to recover on claims that were assigned
to the State. Specifically, Plaintiffs seek to recover from
Defendant Facebook funds that ECOT paid to Facebook totaling
$92, 903.61 in 2016 and $150, 000.00 in 2017. Facebook
allegedly placed ads for ECOT in exchange for these payments.
Plaintiffs allege that ECOT made those payments to Defendant
without receiving “reasonably equivalent value”
under Ohio law.
Facebook now has moved to dismiss under Rule 12(b)(1) and
12(b)(6) of the Federal Rules of Civil Procedure. The Court
turns to the merits of those motions.
R. Civ. P. 12(b)(1)
may move to dismiss for failure to state a claim pursuant to
Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction
when the court lacks the statutory or constitutional power to
adjudicate the case. “When a defendant attacks subject
matter jurisdiction under Rule 12(b)(1), the plaintiff must
meet the burden of proving jurisdiction.” Cline v.
United States, 13 F.Supp.3d 868, 870 (M.D. Tenn. 2014),
(citing Golden v. Gorno Bros., Inc., 410 F.3d 879,
881 (6th Cir. 2005)). A motion to dismiss under Fed.R.Civ.P.
12(b)(1) based upon a lack of subject matter jurisdiction is
generally presented in two ways, as facial challenges or as
factual challenges. Lovely v. United States, 570
F.3d 778, 781-82 (6th Cir. 2009); 2A James W. Moore,
Moore's Federal Practice ¶ 12.07 [2.-1], at 12-50 to
12-55 (2d ed. 1996). When a court reviews a complaint
pursuant to a factual attack to subject matter jurisdiction,
no presumption of truthfulness applies and the court must
weigh evidence to arrive at a factual justification for
subject matter jurisdiction. See Ohio Nat. Life Ins. Co.
v. United States, 922 F.2d 320, 325 (6th Cir. 1990). The
court has wide discretion to allow affidavits and documents.
R. Civ. P. 12(b)(6)
Rule of Civil Procedure 12(b)(6) permits a court to grant a
motion to dismiss when a complaint fails to state a claim
upon which relief can be granted. To survive a motion to
dismiss, a complaint must contain sufficient factual matter,
accepted as true, to “state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). In deciding a motion
to dismiss under Rule 12(b)(6), the court must treat all
factual allegations ...