Gann v. Richardson, 1:13–cv–00532–SEB–TAB.

CourtUnited States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
Writing for the CourtSARAH EVANS BARKER, District Judge.
Citation43 F.Supp.3d 896
PartiesJessica GANN, Tomika Hicks, Tracey Clark, Faye E. Miles, Pauletta C. Pryor, Mary Austin, Plaintiffs, v. Joshua RICHARDSON, John Doe, Defendants.
Docket NumberNo. 1:13–cv–00532–SEB–TAB.,1:13–cv–00532–SEB–TAB.
Decision Date03 September 2014

43 F.Supp.3d 896

Jessica GANN, Tomika Hicks, Tracey Clark, Faye E. Miles, Pauletta C. Pryor, Mary Austin, Plaintiffs
Joshua RICHARDSON, John Doe, Defendants.

No. 1:13–cv–00532–SEB–TAB.

United States District Court, S.D. Indiana, Indianapolis Division.

Signed Sept. 3, 2014.

43 F.Supp.3d 898

Geoffrey S. Lohman, William R. Groth, Fillenwarth Dennerline Groth & Towe LLP, Indianapolis, IN, William Martain Krowl, Krowl Law, LLC, Evansville, IN, for Plaintiffs.

David A. Arthur, Office of the Attorney General, Indianapolis, IN, for Defendants.



This cause is before the Court on Defendants' Motion to Dismiss for Failure to State a Claim and for Lack of Jurisdiction [Docket No. 34], filed on September 13, 2013. The parties stipulated to the dismissal of Count One of Plaintiffs' Amended Complaint on July 11, 2014, leaving only Count Two subject to this motion to dismiss. For the reasons set forth below, Defendants' motion is GRANTED.

Factual and Procedural Background

The Termination of Benefits

Plaintiffs are a group of Indiana bus drivers, Head Start teachers, and teachers' aides. Because their jobs coincided with the school calendar, these employees were annually and temporarily laid off during the summer months. Compl. ¶ 5.1 Customarily, they applied for, and received, unemployment insurance benefits from the Indiana Department of Workforce Development (“DWD”) for these temporary lay-offs. Compl. ¶ 7. The United States provides funding for the states' unemployment benefit programs pursuant to the Social Security Act. While the federal government imposes some requirements on state programs as conditions of continued funding, the participating states are entitled to set their own criteria for eligibility. See 42 U.S.C. § 503.

In 2011 and 2012, the Indiana legislature amended the state's unemployment insurance eligibility law to provide that those employees who are on a vacation or planned break from work are not “unemployed” for purposes of receiving state benefits. Ind.Code § 22–4–3–5.2 Pursuant to the changes in the statute, DWD determined that Plaintiffs were not eligible for the unemployment benefits they applied for in the summer of 2012, and it accordingly terminated their benefits—doing

43 F.Supp.3d 899

so without according the affected workers an opportunity for a prior, individualized hearing. Compl. ¶ 10. Several of the employees whose benefits were terminated filed timely administrative appeals, and on December 28, 2012, the review board upheld DWD's interpretation of the statute and its corresponding denial of benefits. Compl. ¶ 13. Plaintiffs brought a claim in this Court containing two counts. Count One alleges that Defendant Joshua Richardson, acting in his capacity as the Deputy Commissioner of DWD, deprived them of due process by denying them benefits without providing a hearing and, relatedly, violated the “fair hearing” provision of Section 303(a)(3) of the Social Security Act, 42 U.S.C. § 503(a)(3).3 See Compl. ¶ 23. Count Two alleges that Defendants' actions violated the “when due” provision of Section 303(a)(1) of the Social Security Act, 42 U.S.C. § 503(a)(1).4

The Indiana Suit

After Defendants had moved to dismiss the present case and the parties had briefed the motion,5 the Indiana Court of Appeals issued a decision in a related matter. In D.B. v. Review Board of Indiana Department of Workforce Development, 2 N.E.3d 705 (Ind.Ct.App.2013), the Court of Appeals upheld the DWD review board's interpretation of the 2011 and 2012 statutory changes, pursuant to which the board had determined that a group of school bus drivers—including several of the plaintiffs in this case—did not qualify as “unemployed” during the Anderson school system's summer break. 2 N.E.3d at 715. The court concluded: “[S]chool employees who are not working as a result of a scheduled school closure—including those who are not working during the period between academic years—and who have reasonable assurance of continued employment after the closure concludes, are excluded from collecting unemployment compensation.” Id. (citing Indianapolis Pub. Sch. v. Review Bd. of Ind. Emp't Sec. Div., 473 N.E.2d 155, 157–58 (Ind.Ct.App.1985) ). The Indiana Supreme Court subsequently denied transfer of the case, rendering the Court of Appeals' interpretation of state law final. See 4 N.E.3d 1188 (Ind.2014).

Procedural Developments

In recognition of the impact of the Indiana Court of Appeals' decision on this matter, we issued an Order to Show Cause on June 20, 2014, directing Plaintiffs to show why the claims contained in Count One of their complaint should not be dismissed. Docket No. 44. In particular, we desired to give Plaintiffs an opportunity to distinguish their factual allegations from the holding of the Court of Appeals with respect to a “property” entitlement to unemployment benefits under the due process clause. Id. at 3–4. Plaintiffs responded by stipulating to the dismissal of Count One—a dismissal we acknowledged on July 18, 2014. Docket No. 46.

Remaining before us is Defendants' September 13, 2013 motion to dismiss, which originally addressed both counts but has been mooted with respect to Count One. See Docket No. 34.

Legal Analysis

Standard of Review

As we discuss below, Defendants argue both that Plaintiffs lack standing to raise

43 F.Supp.3d 900

their claim under the Social Security Act and that Count Two fails to state a claim upon which relief can be granted. Their motion thus implicates Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil Procedure.

1. Standard under Rule 12(b)(1)

The Federal Rules of Civil Procedure command that courts dismiss any suit over which they lack subject matter jurisdiction—whether acting on the motion of a party or sua sponte. See Fed. R. Civ. Pro. 12(b)(1). In ruling on a motion to dismiss under Rule 12(b)(1), we “must accept the complaint's well-pleaded factual allegations as true and draw reasonable inferences from those allegations in the plaintiff's favor.” Franzoni v. Hartmarx Corp., 300 F.3d 767, 771 (7th Cir.2002) ; Transit Express, Inc. v. Ettinger, 246 F.3d 1018, 1023 (7th Cir.2001). We may, however, “properly look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists.” See Capitol Leasing Co. v. F.D.I.C., 999 F.2d 188, 191 (7th Cir.1993) ; Estate of Eiteljorg ex rel. Eiteljorg v. Eiteljorg, 813 F.Supp.2d 1069, 1074 (S.D.Ind.2011).

2. Standard under Rule 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of claims for “failure to state a claim upon which relief may be granted.” Fed.R.Civ.P. 12(b)(6). In determining the sufficiency of a claim, the court considers all allegations in the complaint to be true and draws such reasonable inferences as required in the plaintiff's favor. Jacobs v. City of Chi., 215 F.3d 758, 765 (7th Cir.2000). Federal Rule of Civil Procedure 8(a) applies, with several enumerated exceptions, to all civil claims, and it establishes a liberal pleading regime in which a plaintiff must provide only a “short and plain statement of the claim showing that [he] is entitled to relief,” Fed. R. Civ. Pro. 8(a)(2) ; this reflects the modern policy judgment that claims should be “determined on their merits rather than through missteps in pleading.” E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 779 (7th Cir.2007) (citing 2 James W. Moore, et al., Moore's Federal Practice § 8.04 (3d ed.2006)). A pleading satisfies the core requirement of fairness to the defendant so long as it provides “enough detail to give the defendant fair notice of what the claim is and the grounds upon which it rests.” Tamayo v. Blagojevich, 526 F.3d 1074, 1083 (7th Cir.2008).

In its decisions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), the United States Supreme Court introduced a more stringent formulation of the pleading requirements under Rule 8. In addition to providing fair notice to a defendant, the Court clarified that a complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). Plausibility requires more than labels and conclusions, and a “formulaic recitation of the elements of a cause of action will not do.” Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 618 (7th Cir.2007) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955 ). Instead, the factual allegations in the complaint “must be enough to...

To continue reading

Request your trial
1 cases
  • Gann v. Richardson
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
    • September 3, 2014
    ...43 F.Supp.3d 896Jessica GANN, Tomika Hicks, Tracey Clark, Faye E. Miles, Pauletta C. Pryor, Mary Austin, Plaintiffs,v.Joshua RICHARDSON, John Doe, Defendants.No. 1:13–cv–00532–SEB–TAB.United States District Court, S.D. Indiana, Indianapolis Division.Signed Sept. 3, Motion granted. See also ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT