Nolan v. W. Reg'l Off Track Betting Corp.

• Decision Date: 12 October 2022
• Docket Number: 21-CV-922S
• Parties: MICHAEL NOLAN, Plaintiff, v. WESTERN REGIONAL OFF TRACK BETTING CORPORATION, et al., Defendants.
• Court: U.S. District Court — Western District of New York

MICHAEL NOLAN, Plaintiff,
v.
WESTERN REGIONAL OFF TRACK BETTING CORPORATION, et al., Defendants.

No. 21-CV-922S

United States District Court, W.D. New York

October 12, 2022

DECISION AND ORDER

WILLIAM M. SKRETNY United States District Judge

I. Introduction

This is a civil rights action from Plaintiff's employment with the Western Regional Off Track Betting Corp. (“OTB”) after he learned of allegations of improprieties by the OTB's Board of Directors and Defendant president Henry Wojtaszek (Docket No. 1, Compl.). Plaintiff raised his concerns about these allegations and assisted in external investigations of OTB. Allegedly in reaction to Plaintiff's concern and activities, Defendants then excluded Plaintiff from OTB operations despite being its Chief Operating Officer and FOIL Officer and eventually terminated him.

Before this Court is the Motion to Dismiss (Docket No. 12) of Defendants OTB, Wojtaszek, and Chairman of the Board of OTB Richard D. Bianchi.

For the reasons stated herein, Defendants' Motion to Dismiss (Docket No. 12) is granted and this case is dismissed.

II. Background

A. Alleged Facts from the Complaint

According to the Complaint, from May 2011 until his termination on December 18, 2020, Plaintiff was employed by OTB. Eventually, OTB promoted Plaintiff to be its Chief

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Operating Officer (“COO”) with additional duty as its Freedom of Information Law (“FOIL”) Officer. (Docket No. 1, Compl. ¶¶ 10-11, 13-16.) As FOIL Officer, Plaintiff was responsible for answering lawful inquiries concerning access to OTB records (id. ¶ 14).

OTB is a public benefit corporation (id. ¶ 2), see N.Y. Rac. Pari-Mut. Wag. & Breed. L. §§ 502(1), 519(1)(g). The Board of Directors of OTB represented fifteen western New York counties and the Cities of Rochester and Buffalo, the member municipalities of the regional OTB (id ¶ 12). Defendant Bianchi was the Chairman of the Board of Directors of OTB (id ¶ 3) and Defendant Wojtaszek was its President and Chief Executive Officer (id. ¶ 4).

During Plaintiff's tenure, OTB came under several investigations, inquiring into what Plaintiff termed “benefit-rich health insurance benefits” to OTB Board members; OTB contracts awarded to politically-connected entities; appointment of a politically connected Board member merely to provide that person with health insurance coverage; improper use of video lottery terminal (“VTL”) purse funds; distribution to and personal use of OTB-purchased luxury box and event tickets by friends, family, and political associates; and allegations of bid rigging by Defendant Wojtaszek (id. ¶¶ 18, 21; see Id. ¶¶ 19, 20, 47, 30-32).

Plaintiff had significant concerns arising from these investigations (id. ¶ 22). In or around February and/or March 2019, Plaintiff communicated his concerns (both in writing and orally) to Defendants Wojtaszek and Bianchi and to the OTB Board (id. ¶¶ 23, 24). The Board retained outside counsel to establish the legality of OTB providing insurance coverage to its Board members. This counsel later opined that it was improper for OTB to furnish health coverage to its Board members and the practice should be discontinued.

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(Id. ¶¶ 26-28.) Defendants, however, continued furnishing health coverage to Board members (id. ¶ 29).

Plaintiff claims that Bianchi and Wojtaszek took Plaintiff's statements as threats and became aggressive and ostracized Plaintiff (id. ¶ 33), while not listening to or acting upon the accusations (id. ¶ 34). Defendants also lacked whistleblower protections for its employees (id. ¶ 35).

Investigating authorities (the FBI, the United States Attorney's office) later contacted Plaintiff (id. ¶¶ 36-48). A federal Grand Jury subpoenaed Plaintiff and he personally retained independent counsel (with notice to OTB) to protect his interests in that proceeding (id. ¶¶ 40-42; see Docket No. 16, Pl. Atty. Decl. ¶ 3, Ex. A). Plaintiff claims that his attorneys' fees for this independent counsel are the responsibility of Defendant OTB pursuant to the New York Public Officers Law (Docket No. 1, Compl. ¶ 43). Plaintiff reported his contacts with investigators to Defendants (id. ¶¶ 49-52). Defendants then denied reimbursement of Plaintiff's independent counsel's expenses (id. ¶ 58).

Bianchi and Wojtaszek then allegedly “swiftly, aggressively, and austerely retaliated against Plaintiff and engaged in an ongoing and continuous series of purported retaliatory acts and course of conduct involving harassment, isolation, ostracism, belittling, adverse employment actions, and intimidation,” listing examples of retaliatory acts and their consequences (id. ¶ 59). For example, Defendants excluded Plaintiff from contact with Defendants Wojtaszek and Bianchi, isolating Plaintiff from ordinary operational decisions previously his responsibility as OTB COO and removing him from the chain of command (id.). He claims that he was threatened with termination, pressured

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to resign, and received poor performance ratings (id.). Defendants also removed Plaintiff as OTB FOIL Officer (id. ¶¶ 60, 63). Although Plaintiff had earned raises for eight years prior to 2020, he not only did not receive a raise in 2020 but also had his salary halved later in 2020 due to the COVID-19 pandemic while other officers and staff retained their full salaries that year (id. ¶ 63). Ultimately, Plaintiff claims he was wrongfully terminated, causing him great emotional distress and to incur great financial expenditures (id. ¶¶ 59, 63).

Plaintiff served Defendants with his Notice of Claim on or about September 21, 2020 (Docket No. 1, Compl. ¶ 7, Ex.). Plaintiff alleges that he served OTB with his first Notice of Claim (during the COVID-19 tolling period, described below, see Docket No 12, Defs. Memo. at 10) and that more than 30 days had elapsed since that service but OTB has refused to pay the claim (Docket No. 1, Compl. ¶¶ 6-8, Ex. A). Plaintiff next filed his Complaint (dated July 26, 2021) on or about August 12, 2021 (Docket No. 1, Compl.). There, the First Cause of Action alleges violation of Plaintiff's First Amendment rights by all Defendants in retaliating against Plaintiff from his expressed concerns about OTB's alleged improprieties and pending investigations (id. ¶¶ 66-73). Plaintiff alleges in the Second Cause of Action violation of New York Civil Service Law § 75-b(2)(a) against Defendant OTB for taking adverse personnel actions against Plaintiff (id. ¶¶ 75-80). The Third Cause of Action alleges common law intentional infliction of emotional distress by Defendants Bianchi and Wojtaszek (id. ¶¶ 82-87). He claims they subjected him to “deliberate and malicious campaign of harassment by Defendants Bianchi and Wojtaszek on a continuing and ongoing basis” from Plaintiff informing Defendants of his contacts with the FBI to September 3, 2020, when Plaintiff was placed on medical leave for anxiety

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and depression (id. ¶ 83). The Fourth Cause of Action seeks indemnification and/or reimbursement of Plaintiff's attorneys' fees from Defendant OTB under New York Public Officers Law §§ 18 and 19 for representation for his appearance before the federal Grand Jury (id. ¶¶ 89-94). Finally, the Fifth Cause of Action alleges Defendant OTB violated New York Labor Law § 740 in retaliating against Plaintiff (id. ¶¶ 96-99).

B. Defendants' Motion to Dismiss (Docket No. 12)

After extending Defendants' time to answer (Docket No. 9; see Docket No. 6), they filed the pending Motion to Dismiss (Docket No. 12^[1]). Responses to this Motion ultimately were due by January 28, 2022, and reply by February 11, 2022 (Docket No. 15; see Docket Nos. 13 (original Scheduling Order), 14 (Motion for Extension of deadlines)). After timely briefing (Docket Nos. 16, 17), the Motion is deemed submitted without oral argument.

III. Discussion

A. Applicable General Standards

1. Motion to Dismiss

Under Rule 12(b)(6), the Court cannot dismiss a Complaint unless it appears “beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41,45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). As the Supreme Court held in Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), a Complaint must be dismissed pursuant to

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Rule 12(b)(6) if it does not plead “enough facts to state a claim to relief that is plausible on its face,” id. at 570 (rejecting longstanding precedent of Conley, supra, 355 U.S. at 4546).

To survive a motion to dismiss, the factual allegations in the Complaint “must be enough to raise a right to relief above the speculative level,” Twombly, supra, 550 U.S. at 555; Hicks, supra, 2007 U.S. Dist. LEXIS 39163, at *5. As reaffirmed by the Court in Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009),

“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.' [Twombly, supra, 550 U.S.] at 570 . . . . A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id., at 556 . . . . The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully. Ibid. 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 557 . . . (brackets omitted).”

Iqbal, supra, 556 U.S. at 678 (citations omitted).

A Rule 12(b)(6) motion is addressed to the face of the pleading. The pleading is deemed to include any document attached to it as an exhibit (such as Plaintiff's first Notice of Claim of September 2020, Docket No. 1, Compl., Ex. A; see...