Innovative Polymer Techs., LLC v. Innovation Works, Inc.
| Decision Date | 06 April 2018 |
| Docket Number | Civil Action No. 17-1385 |
| Parties | INNOVATIVE POLYMER TECHNOLOGIES, LLC and DONALD B. JONES, Plaintiffs, v. INNOVATION WORKS, INC., PENNSYLVANIA, DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT, DENNIS M. DAVIN, and SHERRI COLLINS, Defendants. |
| Court | U.S. District Court — Western District of Pennsylvania |
Plaintiffs Innovative Polymer Technologies, LLC ("IPT"), a minority owned limited liability corporation, and Donald B. Jones, the President and CEO of IPT, ("Plaintiffs") have initiated this action against Defendants Innovative Works, Inc. ("IW"), a non-profit corporation; Pennsylvania Department of Community and Economic Development ("DCED"); Dennis Davin, the Secretary of the DCED; and Sherri Collins, the Deputy Secretary of Technology and Innovation for the DCED, (collectively, "Defendants"). Plaintiffs allege that because of Mr. Jones' race, Defendants failed to provide economic support and professional assistance to IPT, and have thereby violated the Equal Protection Clause of the United States Constitution (Count I); the right to contract pursuant to 42 U.S.C. § 1981 (Count II); Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d (Count III); and the Pennsylvania Constitution (Counts IV and V). ECF No. 1 at 16-18.
Presently before the Court are Motions to Dismiss filed on behalf of Defendants DCED, Davin and Collins (the "Commonwealth Defendants"), ECF No. 23, and on behalf of IW, ECF No. 26. The motions have been fully briefed by the parties, and are ripe for disposition. See, ECF Nos. 24, 26, 31, and 32. For the following reasons, the Motions to Dismiss are granted.1
Plaintiffs allege that Defendant DCED is a state agency that administers the distribution of funds in furtherance of the Ben Franklin Technology Partnership ("BFTP"). BFTP is a statutory Commonwealth of Pennsylvania initiative promulgated to promote and support in-state business innovation. BFTP's mission is carried out through four regional non-profit organizations including Defendant IW, the designated Southwestern Pennsylvania regional partner. As a BFTP partner, IW is "responsible for using and distributing capital provided by the Commonwealth to assist and invest in individual companies selected by a partner's regional board." ECF No. 1 ¶ 30. Pursuant to its mission statement, IW "invests capital, business expertise and other resources into high-potential companies with the greatest likelihood for regional economic impact in the Pittsburgh region." Id. ¶ 37.
Plaintiff Donald B. Jones ("Mr. Jones"), "a Black resident of Allegheny County, Pennsylvania," serves as CEO and President of Plaintiff IPT. IPT was created in 2003 when PPG Industries, Inc. ("PPG") discontinued funding of solid state sheer-pulverization ("S3P") research at Northwestern University, a project that Mr. Jones participated in as a PPG-sponsoredresearch engineer.2 Id. 1 ¶¶ 15-17, 21. Mr. Jones decided to pursue commercialization of the S3P "unique plastic and rubber processing technology." Id. ¶¶ 15-21. In furtherance of his goals, Mr. Jones founded IPT, purchased one of two existing prototype S3P commercial production machines, and located the equipment in Youngstown, Ohio. Rupert West, also a Black resident of Allegheny County, serves as IPT's business development consultant. Id. ¶¶ 22-24
Plaintiffs allege that Mr. Jones approached IW in 2004, seeking assistance for IPT in the form of grants and financing, advice, and business expertise. Id. ¶ 41. According to Plaintiffs, IW's assistance was crucial given national statistics regarding capital barriers facing minority-owned companies. Despite providing all information and documentation requested by various IW staff members, Mr. Jones' requests for funding were denied in 2005, 2007, and 2009. Plaintiffs allege that throughout this period, IW staff members added undefined and undescribed requirements and directions that served "no legitimate purpose," but were designed to "delay, frustrate and/or sabotage" IPT's efforts to secure IW assistance. Id. ¶¶ 43, 52-54. Plaintiffs allege that IW's conduct contrasts with the support and enthusiasm expressed toward Plaintiffs and the S3P technology by academic professionals on staff at three area institutions of higher education. Id. ¶¶ 49, 55-57, 59-64. Plaintiffs concede, however, that at least one academicprofessional "withdrew his support" after discussing the funding request with IW officials. Plaintiffs also allege that in 2007, IW provided funding to a White-owned media venture consisting of a radio show. Id. ¶ 58-61.
In 2014, Mr. Jones learned that a different regional BFTP partner provided substantial funding to a "White owned business" "to start an operation similar to that which IPT had been promoting." Id. ¶ 65. Upon learning of the grant, Mr. Jones requested a meeting with IW to find out why IPT received no support, but a separate regional agency funded what Mr. Jones believed to be a similar venture. Subsequently, IW assigned a new staff member to work with IPT, who "identified several issues that needed to be addressed by IPT." Id. ¶ 70. Plaintiffs complain that after responding "fully and promptly," the IW representative raised new issues, requested additional information, and "ignored" IPT's responses. Id. ¶ 72.
Based on IPT's failure to obtain assistance from IW, Mr. Jones "concluded that his race and/or color was the reason IPT had received no funding from IW." Id. ¶ 73.
In February 2015, Plaintiffs sought the assistance of Defendant Collins, in her capacity as Deputy Secretary of Technology and Innovation at DCED, to overcome "IW recalcitrance." Id. ¶ 74. In the course of a May 2015 teleconference with Collins and DCED counsel, Mr. Jones learned for the first time of IW's formal application process. Collins appointed a DCED staff member "to assist IPT with its IW problems." Id. ¶ 79. Such assistance, according to Plaintiffs, "was an empty gesture." Plaintiffs state that the staff member was critical of IPT's desire to obtain IW funding and guidance, even after Plaintiffs assured the staff member that IPT's operations (then located in Youngstown, Ohio) would be based in Pennsylvania. Id. ¶ 80. Plaintiffs conclude that Collins and Davin acted in coordination with IW "for reasons of race,"and were unwilling to exercise appropriate oversight and supervision to ensure that IW did not discriminate on the basis of race when granting funding and assistance. Id. ¶¶ 89-91.
Plaintiffs subsequently submitted an application for funding to IW, but have not received the requested financial assistance. Plaintiffs state that IW denied them funding because of race-based discrimination. Id. ¶ 87.
Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedures, the Commonwealth Defendants challenge the jurisdiction of this Court over claims asserted against DCED and the individual Commonwealth Defendants in their official capacities, and raise the Eleventh Amendment's limitation of judicial power over actions within the scope of a state's sovereign immunity. ECF No. 24 at 4.
"[A] Rule 12(b)(1) motion is directed to the court's 'very power to hear the case.'" Judkins v. HT Window Fashions Corp., 514 F.Supp.2d 753, 759 (W.D. Pa. 2007) (quoting Mortensen v. First Federal Savings & Loan Association, 549 F.2d 884, 891 (3d Cir. 1977). As the parties asserting that jurisdiction exists, Plaintiffs bear the burden of showing that their claims are properly before the court. Development Finance Corp. v. Alpha Housing & Health Care Inc., 54 F.3d 156, 158 (3d Cir. 1995).
In reviewing a Rule 12(b)(1) motion, a court must determine whether the attack on its jurisdiction is a facial attack or a factual attack. A facial attack challenges the sufficiency of the plaintiff's pleadings on jurisdictional grounds. Petruska v. Gannon University, 462 F.3d 294, 302, n. 3 (3d Cir. 2006). When considering a facial attack, a court must accept the allegations contained in the plaintiff's complaint as true. Id. A factual attack on the court's jurisdiction must be treated differently. Id. When considering a factual attack, the court does not attach a presumption of truthfulness to the plaintiff's allegations, and the existence of disputed material facts does not preclude the court from deciding for itselfwhether jurisdiction over the plaintiff's claims can be properly exercised. Mortensen, 549 F.2d at 891.
IW and the Commonwealth Defendants also seek dismissal pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, contending that Plaintiffs have failed to allege facts sufficient to state a claim upon which relief may be granted. A motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) must be viewed in the light most favorable to the plaintiff and all the well-pleaded allegations of the complaint must be accepted as true. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). However, a complaint must be dismissed pursuant to Rule 12(b)(6) if it does not allege "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). See also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) ().
The Court need not accept inferences drawn by a plaintiff if they are unsupported by the facts as set forth in the complaint. See California Public Employees' Retirement. Sys. v. Chubb Corp., 394 F.3d 126, 143 (3d Cir. 2004) (citing Morse v. Lower Merion School Dist., 132 F.3d 902, 906 (3d Cir. 1997)). Nor must the Court accept legal conclusions set forth as factual allegations. Twombly,...
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