Brown v. Cassens Transport Co.
| Decision Date | 15 July 2005 |
| Docket Number | No. 04-CV-72316.,04-CV-72316. |
| Parties | Paul BROWN, William Fanaly, Charles Thomas, Gary Riggs, Robert Orlikowski, and Scott Way, Plaintiffs, v. CASSENS TRANSPORT COMPANY, Crawford & Company, foreign corporations, and Dr. Saul Margules, Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Marshall D. Lasser, Southfield, MI, for Plaintiffs.
Janet E. Lanyon, Kenneth W. Zatkoff, Dean & Fulkerson, Troy, MI, Kendall B. Williams, Timothy R. Winship, Williams Firm, Grand Blanc, MI, for Defendants.
Now before the Court are Defendants' motions to dismiss Plaintiffs' complaint under Federal Rule of Civil Procedure 12(b)(6). The Court heard oral argument on March 10, 2005. Having considered the entire record, and for the reasons that follow, the Court:
1) DISMISSES Plaintiffs' claims under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq., because they fail to state claims for which relief may be granted, and because Michigan's Workers' Disability Compensation Act, M.C.L. 418.101, et seq., reverse-preempts those claims under the McCarran-Ferguson Act, 15 U.S.C. § 1012(b); and
2) DISMISSES Plaintiffs' state-law claims of intentional infliction of emotional distress against Defendants for failure to state claims for which relief may be granted.
At all times relevant to the instant action, Paul Brown ("Brown"), William Fanaly ("Fanaly"), Charles Thomas ("Thomas"), Gary Riggs ("Riggs"), Robert Orlikowski ("Orlikowski"), and Scott Way ("Way") (collectively "Plaintiffs") were employees of Cassens Transport Company ("Cassens"). (Compl. at ¶ 4.) Crawford & Company ("Crawford") adjusted workers-compensation claims of Cassens' employees on Cassens' behalf. (Id.) Dr. Saul Margules ("Margules") examined certain Plaintiffs concerning their entitlements to workers' compensation benefits. (Id. at ¶ 6B.)
On June 22, 2004, Plaintiffs filed suit against Cassens, Crawford, and Margules (collectively "Defendants"), alleging that each Defendant engaged in a fraudulent enterprise to deny each Plaintiff of his workers' compensation benefits in violation of the Racketeer Influenced and Corrupt Organizations Act ("the RICO Act"), 18 U.S.C. § 1961, et seq., and alleging that Defendants subjected each Plaintiff to the intentional infliction of emotional distress in violation of Michigan law. (Id. at ¶¶ 1-77.) Plaintiffs' complaint, in essence, alleges that Defendants conspired to deny each Plaintiff's workers' compensation claim even though they were aware of facts that would support the validity of each of those claims.
On August 23, 2004, Crawford filed the instant motion to dismiss Plaintiffs' complaint under Federal Rule of Civil Procedure 12(b)(6). In that motion, Crawford argues that: 1) the McCarran-Ferguson Act, 15 U.S.C. § 1012, et seq., preempts Plaintiffs' RICO claims; and 2) Plaintiffs' intentional-infliction-of-emotional-distress ("IIED") claims fail as a matter of law because Michigan does not recognize causes of action for the mere tortious refusal to pay workers' compensation benefits. (Crawford Mot. at 2.) Cassens and Margules concur in this motion to the extent that its arguments would equally apply to Plaintiffs' claims against them.
On September 7, 2004, Cassens filed the instant motion to dismiss Plaintiffs' complaint under Rule 12(b)(6). Along with raising the same two claims that Crawford raises in its motion to dismiss, Cassens' motion contends that: 1) the primary-jurisdiction doctrine bars Plaintiffs' complaint; 2) the Labor Management Relations Act of 1947 ("LMRA") or § 301(a), 29 U.S.C. § 141 et seq., preempts Plaintiffs' RICO claims; and 3) Plaintiffs' RICO claims fail to state claims for which relief may be granted. (Cassens Mot. at 2-3.) Crawford and Margules concur in this motion to the extent that its arguments would equally apply to Plaintiffs' claims against them.
Federal Rule of Civil Procedure 12(b)(6) permits a party to raise as a defense to a claim for relief in a pleading the opposing party's failure to state a claim upon which relief can be granted. Rule 12(b)(6) is designed to test whether, as a matter of law, a plaintiff is entitled to legal relief. Nishiyama v. Dickson County, 814 F.2d 277, 279 (6th Cir.1987). Before dismissing a complaint for failure to state a claim upon which relief can be granted, a court must conclude "beyond [a] doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Carver v. Bunch, 946 F.2d 451, 452 (6th Cir.1991).
To survive a motion to dismiss under Rule 12(b)(6), a "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). When considering a motion to dismiss, a court must construe the complaint in the light most favorable to the plaintiff and accept well-pleaded facts as true. Columbia Natural Resources Inc. v. Tatum, 58 F.3d 1101, 1109 (6th Cir.1995). Thus, a court may not grant a Rule 12(b)(6) motion based upon its disbelief of a complaint's factual allegations. Id. A court, however, need not accept as true conclusions of law or unwarranted factual inferences. Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987).
Federal Rule of Civil Procedure 9(b) provides that, "[i]n all averments of fraud ..., the circumstances constituting fraud ... shall be stated with particularity." See generally Begala v. PNC Bank, Ohio, Nat. Ass'n, 214 F.3d 776 (6th Cir.2000) ().
Federal Rule of Civil Procedure 12(b) provides:
If, on a motion asserting the defense ... [of] failure to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
The Court will proceed to discuss the following issues related to Plaintiffs' RICO claims:
1) whether the primary-jurisdiction doctrine mandates a stay of Plaintiffs' RICO claims;
2) whether the Burford doctrine mandates a stay of Plaintiffs' RICO claims;
3) whether the complaint pleads predicate acts of witness tampering;
4) whether the complaint pleads predicate acts of mail or wire fraud with the necessary particularity;
5) whether the complaint pleads the requisite detrimental reliance;
6) whether the McCarran-Ferguson Act reverse-preempts Plaintiffs' RICO claims; and
7) whether the Labor Management Relations Act preempts Plaintiffs' RICO claims.
In its motion to dismiss, Cassens contends that the doctrine of primary jurisdiction applies to Plaintiffs' RICO claims. (Cassens Br. at 20.) According to Cassens, all of the Plaintiffs except Fanaly have claims for workers' compensation benefits that are pending before the Workers Disability Compensation Bureau ("the WDCB"). (Reply at 5.)
The primary-jurisdiction doctrine's aim is to "promot[e] proper relationships between the courts and administrative agencies charged with particular regulatory duties." United States v. Western Pac. R.R. Co., 352 U.S. 59, 63, 77 S.Ct. 161, 1 L.Ed.2d 126 (1956). Specifying when the doctrine of primary jurisdiction is applicable, the Supreme Court has held:
.... "Primary jurisdiction" applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of a claim requires a resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case[,] a judicial process is suspended pending referral of such issues to the administrative body for its views.
Id. at 63-64, 77 S.Ct. 161. Thus, the primary-jurisdiction doctrine applies where: 1) the Court has original jurisdiction over the claim before it; 2) the adjudication of that claim requires the resolution of certain underlying issues; and 3) a regulatory scheme commits the resolution of those issues to an administrative agency's special competence. In deciding whether the primary-jurisdiction doctrine applies in any given case, the court must determine whether the application of that doctrine in the particular case would serve the following twin rationales underlying that doctrine: 1) uniformity in questions of an administrative nature; and 2) the expert and specialized knowledge of the relevant agency to the issue in question. Id. at 64, 77 S.Ct. 161.
The threshold requirements for the applicability of the primary-jurisdiction doctrine are met here. First, the Court clearly has jurisdiction over Plaintiffs' RICO claims as they arise under federal law. Second, the adjudication of Plaintiffs' RICO claims — i.e. that Defendants engaged in a RICO enterprise fraudulently to deny Plaintiffs' workers' compensation benefits — hinges, in part, upon whether Plaintiffs are entitled to those benefits in the first instance. (Cassens Br. at 20; Resp. Cassens at 17.) Lastly, a regulatory scheme of the Michigan legislature, the Workers' Disability Compensation Act ("the WDCA"), commits the resolution of an employee's entitlement to workers' compensation benefits to the special competence of the WDCB. (Cassens Br. at 20.) Specifically, the WDCA, M.C.L. 418.841(1), provides:
Any dispute or controversy concerning compensation or other benefits shall be submitted to the bureau and all questions arising under this act shall be determined by the bureau or a workers' compensation magistrate, as...
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Brown v. Cassens Transport Co.
...for dismissal pursuant to Fed. R.Civ.P. 12(b)(6), and, on July 15, 2005, the district court granted that motion. Brown v. Cassens Transp. Co., 409 F.Supp.2d 793 (E.D.Mich.2005). On the same day the district court issued its dismissal order, plaintiffs filed a motion for leave to file an ame......
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