PANWAR v. ACCESS THERAPIES, INC et al

Filing 86

ORDER ON MOTION TO DISMISS - Mr. Panwar's Motion to Dismiss RN Staff's counterclaim for abuse of process (Dkt. #49 ) is GRANTED. RN Staff's Counterclaim (Dkt. #44 ) is DISMISSED without prejudice. Signed by Judge Tanya Walton Pratt on 1/28/2013. (JD)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

RITURAJ SINGH PANWAR,
Plaintiff,
vs.
ACCESS THERAPIES, INC,
RN STAFF INC,
RAMON VILLEGAS,
Defendants.
______________________________________
RN STAFF INC,
Counter Claimant,
vs.
RITURAJ SINGH PANWAR,
Counter Defendant.

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Case No. 1:12-cv-00619-TWP-TAB

ORDER ON MOTION TO DISMISS
This matter is before the Court on Plaintiff Rituraj Singh Panwar’s (“Mr. Panwar”)
Motion to Dismiss RN Staff Inc.’s (“RN Staff”) Counterclaim (Dkt. 49).

RN Staff’s

counterclaim alleges that Mr. Panwar’s Amended Complaint constitutes an abuse of process
because the allegations were for the purpose of circumventing the administrative process
required by the Immigration and Nationality Act (“INA”). (Dkt. 44). For the reasons stated
below, Mr. Panwar’s motion to dismiss RN Staff’s counterclaim (Dkt. 49) is GRANTED.

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I.

BACKGROUND

Mr. Panwar, on behalf of himself and all others similarly situated, filed this lawsuit against
RN Staff and other defendants for breach of contract, violations of the Racketeer Influenced and
Corrupt Organizations Act (“RICO”), violations of the Trafficking Victims Protection Act
(“TVPA”), violations of Indiana statutory wage law and common law claims. (Dkt. 1). After
being terminated from his employment, following the filing of this lawsuit, Mr. Panwar filed an
Amended Complaint, adding a claim under the Fair Labor Standards Practices Act’s (“FLSA”)
anti-retaliation provision. (Dkt. 16).
Mr. Panwar is a citizen of India who worked for RN Staff under an H-1B visa, which enables
corporations in the United States to hire foreign skilled labor. Mr. Panwar alleges that the
defendants were involved in a scheme to defraud H-1B employees of wages that the federal
government requires defendants to pay under the H-1B visa program. Rather than bringing his
claims under the INA, Mr. Panwar alleges breach of contract and violations of wage statutes,
RICO and the TVPA.
RN Staff filed an amended answer to Mr. Panwar’s Amended Complaint, asserting a
counterclaim for abuse of process.

(Dkt. 44).

The counterclaim alleges that “Panwar’s

allegations against RN Staff were made for the purpose of circumventing the administrative
procedures and remedies of the Immigration and Nationality Act and its applicable rules and
regulations.” Dkt. 44 at 27 ¶ 7. RN Staff argues that Mr. Panwar’s claims require adjudication
under the INA, which requires exhaustion of administrative remedies prior to filing an action in
district court; therefore, RN Staff argues, the claims in Mr. Panwar’s Amended Complaint are an
improper use of process.

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II.

LEGAL STANDARD

When reviewing a 12(b)(6) motion, the Court takes all well-pleaded allegations in the
complaint as true and draws all inferences in favor of the non-moving party. Bielanski v. Cnty.
of Kane, 550 F.3d 632, 633 (7th Cir. 2008) (citations omitted). However, the allegations must
“give the defendant fair notice of what the . . . claim is and the grounds upon which it rests” and
the “[f]actual allegations must be enough to raise a right to relief above the speculative level.”
Pisciotta v. Old Nat’l Bancorp, 499 F.3d 629, 633 (7th Cir. 2007) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007)). Stated differently, the complaint must include “enough
facts to state a claim to relief that is plausible on its face.” Hecker v. Deere & Co., 556 F.3d 575,
580 (7th Cir. 2009) (citations omitted). To be facially plausible, the complaint must allow “the
court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). Pleadings consisting of no more
than mere conclusions are not entitled to an assumption of truth, including legal conclusions
couched as factual allegations and “[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at
555).
III.

DISCUSSION

RN Staff opposes Mr. Panwar’s motion to dismiss on the basis that (1) Mr. Panwar must
prove violations of the INA to prevail on his claims; (2) he does not have a private cause of
action to enforce violations of the INA unless he has exhausted his administrative remedies; (3)
Mr. Panwar’s state claims are preempted; and (4) RN Staff properly pleaded its counterclaim for
abuse of process. Dkt. 54 at 1. Of these four arguments, only one—that RN Staff properly

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pleaded its counterclaim—bears any relevance to Mr. Panwar’s motion to dismiss the abuse of
process counterclaim. Most of RN Staff’s brief—as well as Mr. Panwar’s—focuses on what
would be more properly addressed in a motion to dismiss Mr. Panwar’s Amended Complaint,
which has been separately filed (Dkt. 68) and will not be addressed as part of this Order. The
issue presently before this Court is whether RN Staff has sufficiently pleaded its claim for abuse
of process.
In Indiana, the tort of abuse of process consists of two elements: (1) ulterior motive, and
(2) use of process that would not be proper in the normal prosecution of the case. Watters v.
Dinn, 633 N.E.2d 280, 288 (Ind. Ct. App. 1994). “The gravamen of [abuse of process] is not the
wrongfulness of the prosecution, but some extortionate perversion of lawfully initiated process to
illegitimate ends.” Nat’l City Bank, Ind. v. Shortridge, 689 N.E.2d 1248, 1252 (Ind. 1997),
supplemented sub nom. Nat’l City Bank, Ind. v. Shortridge, 691 N.E.2d 1210 (Ind. 1998)
(quoting Heck v. Humphrey, 512 U.S. 477, 486 n.5 (1994)). Under Indiana law, in order to
prevail on an abuse of process claim, the plaintiff must have some evidence tending to show that
the defendant used judicial processes for an end other than that for which it was designed.
Comfax Corp. v. N. Am. Van Lines Inc., 638 N.E.2d 476, 481 (Ind. Ct. App. 1994). “[T]he
relevant inquiry [is] whether the complained-of acts were procedurally and substantively proper
under the circumstances.” Reichhart v. City of New Haven, 674 N.E.2d 27, 32 (Ind. Ct. App.
1996) (internal quotations omitted). Proof of improper motive alone is insufficient to proceed
with an abuse of process claim; a plaintiff must establish that a defendant has employed an
“improper ‘process’ before the court proceeds to an examination of the defendant’s motive.” Id.
at 30.

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The starting point for analysis of an abuse of process claim is to determine whether the
defendant (in this case, the counter-defendant) employed an improper process, not the
defendant’s motivation in employing that process. Id. at 31. “A party’s intent is irrelevant
where his acts are procedurally and substantively proper under the circumstances.” Id. RN
Staff’s counter-complaint makes the conclusory statement that the “claims raised and allegations
made in this case were willful acts in the use of process not proper in the regular course of this
proceeding.” Dtk. 44 at 21 ¶ 9. However, RN Staff does not allege any facts that would
demonstrate that the process itself was not proper, only that Mr. Panwar’s motivation in
attempting to circumvent the administrative procedures of the INA was not proper. See CDW
LLC v. NETech Corp., No. 1:10-cv-0530-SEB-DML, 2011 WL 3844160, at *6 (S.D. Ind. Aug.
26, 2011) (allegations in counterclaim related only to alleged ulterior motive, not the propriety of
plaintiff’s use of the judicial process).
Even assuming, for purposes of this Motion to Dismiss, that Mr. Panwar did file his
Amended Complaint in an attempt to circumvent the administrative procedures of the INA, the
filing of the Amended Complaint—the “process” in question—was used for its intended purpose,
which was to initiate a lawsuit. Cf. Bd. of Ed. of Farmingdale Union Free School Dist. v.
Farmingdale Classroom Teachers Ass’n, Inc., Local 1889, ATF AFL-CIO, 38 N.Y.2d 397 (N.Y.
1975) (abuse of process claim was properly brought where defendant issued subpoenas for 87
teachers to appear on the same day and refused to stagger those appearances, causing plaintiff
school board to hire substitute teachers for numerous classes). The lawsuit has proceeded along
its normal and intended course, including the filing of an answer and amended answer by RN
Staff.

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The issue of whether Mr. Panwar failed to exhaust his administrative remedies is an
affirmative defense that must be proved by the defendant in a 12(b)(6) motion to dismiss, which
is the proper mechanism to test the sufficiency of Mr. Panwar’s Amended Complaint. See
Williams v. Potter, 2:06 CV 353, 2008 WL 4449549, at *2 (N.D. Ind. Sept. 25, 2008); Alves v.
Masters Entm’t Grp., LLC, 3:07-CV-305-TS, 2008 WL 4452145 (N.D. Ind. Sept. 30, 2008)
(when a claim involves a comprehensive administrative scheme that a party is required to
exhaust, courts will analyze the claim under Rule 12(b)(6)). Finding that a failure to exhaust
administrative remedies prior to filing a lawsuit also constitutes the tort of abuse of process
would set a dangerous precedent and is not in line with the case law in Indiana.1
Thus, the Court finds that RN Staff has failed to plead facts showing that the filing of the
Amended Complaint was done for a purpose other than that for which it was intended. The fact
that Mr. Panwar may have done so with ulterior or improper motives is irrelevant to this inquiry
without a showing that a process was procedurally and substantively improper under the
circumstances.2 “A regular and legitimate use of process, though with an ulterior motive or bad
intention[,] is not a malicious abuse of process.” Brown v. Robertson, 92 N.E.2d 856, 858 (Ind.
Ct. App. 1950). The sufficiency of Mr. Panwar’s Amended Complaint is properly an issue for
the defendants’ motions to dismiss, not an abuse of process claim.

1

Even alleging that a plaintiff failed to exhaust his administrative remedies is not automatic grounds for dismissing
his claim. “[E]xhaustion may be excused if: (1) requiring exhaustion of administrative remedies causes prejudice,
due to unreasonable delay or an ‘indefinite timeframe for administrative action’; (2) the agency lacks the ability or
competence to resolve the issue or grant the relief requested; (3) appealing through the administrative process would
be futile because the agency is biased or has predetermined the issue; or (4) where substantial constitutional
questions are raised.” Iddir v. I.N.S., 301 F.3d 492, 498 (7th Cir. 2002) (citations omitted). Thus, in very limited
circumstances, a plaintiff could conceivably fail to exhaust his administrative remedies and still state a viable claim.
2

Litigants who believe that a party has acted with improper motive are not completely without remedy in these
situations. Federal Rule of Civil Procedure 11 authorizes sanctions against a party or attorney who files frivolous
pleadings, files pleadings for an improper purpose such as to harass, cause unnecessary delay, or needlessly increase
the cost of litigation, or makes allegations that they know have no basis in law or fact. See Fed. R. Civ. P. 11(b);
Janky v. Bastitatos, 259 F.R.D. 373, 377 (N.D. Ind. 2009); Heartland Recreational Vehicles, LLC v. Forest River,
Inc., No. 3:11-CV-250-JD, 2012 WL 4050301, at *10 (N.D. Ind. Sept. 12, 2012).

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IV.

CONCLUSION

For the foregoing reasons, Mr. Panwar’s Motion to Dismiss RN Staff’s counterclaim for
abuse of process (Dkt. 49) is GRANTED. RN Staff’s Counterclaim (Dkt. 44) is DISMISSED
without prejudice.
SO ORDERED.
01/28/2013
Date: _____________

________________________
Hon. Tanya Walton Pratt, Judge
United States District Court
Southern District of Indiana

Distribution:
Andrew P. Wirick
HUME SMITH GEDDES GREEN &
SIMMONS
[e-mail]

Michael F. Brown
PETERSON BERK & CROSS, S.C.
[e-mail]

Daniel Aaron Kotchen
KOTCHEN & LOW LLP
[e-mail]

G. John Cento
RILEY BENNETT & EGLOFF LLP
[e-mail]

Justin T. Ervin
KOTCHEN & LOW LLP
[e-mail]

Jeffrey B. Fecht
RILEY BENNETT & EGLOFF LLP
[e-mail]

Eamon F. Redmond
KOTCHEN & LOW, LLP
[e-mail]

Bryce H. Bennett, Jr.
RILEY BENNETT & EGLOFF LLP
[e-mail]

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