NELSON v. FORMED FIBER TECHNOLOGIES INC
Filing
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ORDER ON MOTION TO DISMISS By JUDGE GEORGE Z. SINGAL. (lrc)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
STEVEN NELSON, on behalf of himself
and all others similarly situated,
Plaintiff,
v.
FORMED FIBER TECHNOLOGIES,
INC.,
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) Docket No. 2:10-cv-00473-GZS
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Defendant.
ORDER ON MOTION TO DISMISS
Before the Court is Defendant‘s Motion to Dismiss (Docket # 8) Count II of Plaintiff‘s
Complaint. As explained herein, the Court GRANTS the motion and DISMISSES Count II of
Plaintiff‘s Complaint.
I.
LEGAL STANDARD
A motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure
12(b)(6) tests the ―legal sufficiency‖ of a complaint. Gomes v. Univ. of Me. Sys., 304 F. Supp.
2d 117, 120 (D. Me. 2004). The general rules of pleading require a ―short and plain statement of
the claim showing that the pleader is entitled to relief.‖ Fed. R. Civ. P. 8(a)(2). This short and
plain statement need only ―give the defendant fair notice of what the claim is and the grounds
upon which it rests.‖ Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations
and alteration omitted). However, ―[t]o survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‗state a claim for relief that is plausible on its face.‘‖
Ashcroft v. Iqbal, — U.S. — , 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at
570). ―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.‖ Id. (internal quotation omitted).
Thus, faced with a motion to dismiss, the Court must examine the factual content of the
complaint and determine whether those facts support a reasonable inference ―that the defendant
is liable for the misconduct alleged.‖ Id.
The Court must accept as true all well-pleaded factual allegations in the complaint and
draw all reasonable inferences in Plaintiff‘s favor. Gargano v. Liberty Intern. Underwriters, Inc.,
572 F.3d 45, 48 (1st Cir. 2009). However, the Court need not accept ―[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements.‖ Iqbal, 129 S. Ct. at
1949. In distinguishing sufficient from insufficient pleadings, which is a ―context-specific task,‖
the Court must ―draw on its judicial experience and common sense.‖ Id. at 1950 (internal
citation omitted).
II.
FACTUAL BACKGROUND
Plaintiff Nelson‘s Complaint includes the following relevant factual allegations. Prior to
December 2008, Plaintiff Nelson and others similarly situated were employed by Defendant
Formed Fiber Technologies, LLC1 (―Formed Fiber‖), a corporation organized under the laws of
the State of Delaware and headquartered and doing business in Auburn, Maine. (Class Action
Complaint and Demand for Jury Trial (―Compl.‖) (Docket # 1) ¶¶ 1, 5.) For at least twelve
months prior to the events described in the Complaint, Formed Fiber employed more than 100
employees at its Auburn facility. (Id. at ¶¶ 1, 18, 32.) In November 2008, Formed Fiber
representatives orally informed Plaintiff and other employees that it would be laying off
employees at the Auburn facility in December 2008 due to declining business. (Id. ¶ 17.) Soon
thereafter, on or about December 15, 2008, Formed Fiber laid off approximately 152 out of
Plaintiff‘s Complaint alleges that Defendant is Formed Fiber Technologies, Inc. Defendant states that it is properly
identified as Formed Fiber Technologies, LLC.
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approximately 300 employees at the Auburn facility. (Id. ¶ 1.) On January 12, 2009, Formed
Fiber recalled several employees, including the Plaintiff, but laid them off again on January 23,
2009. (Id. ¶¶ 19, 20.) Formed Fiber gave written notice of the December 2008 and January
2009 layoffs by letter dated February 11, 2009. (Id. ¶ 21.) Approximately one day later, on or
about February 12, 2009, Formed Fiber recalled some of the employees it laid off in December
2008 and January 2009; Formed Fiber did not recall Plaintiff Nelson, although he was more
senior than several of the recalled employees. (Id. ¶¶ 22.) Formed Fiber did not pay severance
to Plaintiff nor others initially laid off on or about December 15, 2008 and who never returned to
work following their termination. (Id. ¶¶ 34, 40.)
III.
DISCUSSION
Plaintiff Nelson brings claims against Defendant Formed Fiber on behalf of himself and
all others similarly situated for violations of the Worker Adjustment and Retraining Notification
(WARN) Act, 29 U.S.C. § 2101 et seq. (Count I), and the Maine Severance Pay Act (MSPA), 26
M.R.S.A. § 625-B (Count II). Defendant‘s Motion to Dismiss seeks to dismiss only Count II of
the Complaint, which alleges that Defendant‘s lay off of approximately 152 out of 300
employees at its Auburn, Maine facility required it to make severance payments to those
terminated employees. Defendant argues that Plaintiff‘s Complaint must be dismissed because,
one, the Complaint sets forth only the bare elements of a claim under the MSPA without stating
adequate grounds for its allegations, and, two, Plaintiff‘s Complaint fails to allege that Defendant
relocated or terminated its Auburn facility. The question in this case is whether Plaintiff has
failed to plead sufficient facts to state a claim for relief under the MSPA in the absence of any
factual allegations that operations or production at the facility, or any part or division of the
facility, stopped after the alleged layoffs.
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The Court begins its analysis by identifying pleadings in Plaintiff‘s Complaint that,
―because they are no more than conclusions, are not entitled to the assumption of truth.‖ Iqbal,
129 S. Ct. at 1950.
The Complaint alleges that Defendant ―relocated and/or terminated
operations at its Auburn, Maine facility,‖ Compl. ¶¶ 33, 39, and that there was a ―substantial
cessation of commercial operations‖ under the MSPA, id. ¶¶ 35-38. These bare, conclusory
assertions ―amount to nothing more than a formulaic recitation of the elements‖ of a claim under
the MSPA and, as such, are not entitled to be assumed true. Iqbal, 129 S. Ct. at 1950. Standing
alone, these conclusory legal allegations fail to allege a termination within the scope of the
MSPA. However, Plaintiff also alleges that Defendant laid off approximately 152 out of 300
workers, Compl. ¶ 1, and argues that such a layoff constitutes a termination under the MSPA.
The Court next analyzes the text of the relevant statute. See SEC v. Tambone, 597 F.3d
436, 442 (1st Cir. 2010) (citing Cent. Bank of Denver v. First Interstate Bank of Denver, 511
U.S. 164, 173 (1994)). The MSPA requires that ―[a]ny employer who relocates or terminates a
covered establishment‖ pay its ―employees for severance pay at a rate of one week‘s pay for each
year of employment by the employee in that establishment.‖ 26 M.R.S.A. § 625-B(2). The
statute defines a ―covered establishment‖ as ―any industrial or commercial facility or part thereof
which employs or has employed at any time in the preceding 12-month period 100 or more
persons.‖ 26 M.R.S.A. § 625-B(1)(A). ―Relocation‖ is defined as ―the removal of all or
substantially all of industrial or commercial operation in a covered establishment to a new
location within or without the State of Maine, 100 or more miles distant from its original
location.‖ 26 M.R.S.A. § 625-B(1)(F). ―Termination‖ is ―the substantial cessation of industrial
or commercial operations in a covered establishment.‖ 26 M.R.S.A. § 625-B(1)(G).
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Plaintiff alleges that Formed Fiber relocated or terminated operations at a covered
establishment when it laid off approximately 152 out of 300 total employees at its Auburn plant
because such a large-scale layoff constituted a ―substantial cessation‖ of operations. Plaintiff
does not allege that Formed Fiber relocated, completely ceased operations or terminated a
particular division or part of the Auburn facility. Accordingly, the Court‘s inquiry centers on the
definition of ―termination,‖ and, in particular, the meaning of the term ―substantial cessation,‖
which is not defined in the MSPA.
In determining the meaning of ―substantial cessation,‖ the First Circuit instructs that ―in
the absence of either a built-in definition or some reliable indicium that the drafters intended a
special nuance,‖ the term should be given its ordinary meaning. Tambone, 597 F.3d at 442-43
(citing Smith v. United States, 508 U.S. 223, 228 (1993) (―When a word is not defined by
statute, we normally construe it in accordance with its ordinary or natural meaning.‖); In re Hill,
562 F.3d 29, 32 (1st Cir. 2009) (stating that words in a statute carry their ordinary meanings if
not specifically defined)).
―One reference point for determining the ordinary meaning of a word is its accepted
dictionary definition.‖
Id. at 443 (citing Smith, 508 U.S. at 228-29).
Common and
representative dictionary definitions of ―substantial‖ include ―material,‖ ―true,‖ and ―real.‖ See
The American Heritage Dictionary of the English Language 1727 (4th ed. 2000). Common and
representative dictionary definitions of ―cessation‖ include ―a bringing or coming to an end‖ and
―to stop.‖ Id. at 305. These dictionary definitions indicate a true stoppage of operations rather
than a slowdown or reduction of operations. To the extent Plaintiff attempts to argue that a fifty
percent reduction in staff qualifies as a ―substantial cessation‖ of operations at Defendant‘s
Auburn facility, the ordinary meaning of substantial cessation is inconsistent with this argument.
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The Legislature‘s choice of specific language in different parts of the MSPA also guides
the Court in determining the meaning of the term at issue. While subsection (1)(G) of the MSPA
defines ―termination‖ as a ―substantial cessation,‖ subsection (10) of the MSPA provides a
separate and distinct definition for the ―mass layoff‖ of employees. See 26 M.R.S.A. §§ 625B(1)(G) & (10). Under the MSPA, a ―mass layoff‖ occurs ―[w]henever an employer lays off 100
or more employees at a covered institution,‖ 26 M.R.S.A.
§ 625-B(10), and triggers a
requirement that the employer report the ―mass layoff‖ to the Director of the Maine Department
of Labor within seven days.2 Id.
The Legislature‘s deliberate choice to distinguish between ―mass layoff‖ and
―termination‖ or ―substantial cessation‖ is instructive. See Aydelott v. City of Portland, 990
A.2d 1024, 1027 (Me. 2010) (stating that different language in various parts of an ordinance
―suggests an intentional distinction‖); Arsenault v. Sec‘y of State, 905 A.2d 285, 289 (Me. 2006)
(―If the Legislature had intended [a requirement], it knew how to say so directly as it did in [a
comparable section].‖); see also Russello v. United States, 464 U.S. 16, 23 (1983) (―[W]here
Congress includes particular language in one section of a statute but omits it in another section of
the same Act, it is generally presumed that Congress acts intentionally and purposely in the
disparate inclusion or exclusion.‖) (internal citation omitted); Tambone, 597 F.2d at 443 (stating
that ―[w]ord choices have consequences‖). Had the Legislature intended a ―mass layoff‖ to fall
within the definition of ―termination,‖ it presumably would have done so. See Russello, 464
2
Specifically, the MSPA states that following a mass layoff:
[T]he employer within 7 days of such a layoff shall report to the director the expected duration of
the layoff and whether it is of indefinite or definite duration. The director shall, from time to time,
but no less frequently than every 30 days, require the employer to report such facts as the director
considers relevant to a determination as to whether the layoff constitutes a termination or
relocation under this section or whether there is a substantial reason to believe the affected
employees will be recalled within a reasonable time.
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U.S. at 23; Arsenault, 905 A.2d at 289. Instead, the MSPA triggers different requirements for a
mass layoff and a termination – a mass layoff triggers a reporting requirement whereas a
termination triggers a severance pay requirement.3 See 26 M.R.S.A. §§ 625-B(1)(G) & (10).
Plaintiff additionally argues that the applicable Maine Department of Labor regulations
could be read to define a ―substantial cessation‖ of operations as including any situation in which
the number of employees, hours worked or production at a covered facility declines by fifty
percent from the same period one year earlier. The relevant Department of Labor regulations
state:
Determination of the Date of Termination or Relocation
If the Director determines that a termination or relocation of a covered
establishment has occurred or will occur, the Director shall determine the date of
termination or relocation in accordance with this section.
A.
In doing so, the Director shall consider the following factors:
1. The date of the decision to close or relocate the establishment;
2. The date of any announcement to the employees that the establishment
will be closed or relocated;
3. The point at which the number of employees employed at the
establishment is less than 50% of the number of employees for the same
time period one year earlier;
4. The point at which the number of hours worked at the establishment is
less than 50% of the number of hours worked for the same time period one
year earlier; and
5. The point at which any production or output measure is less than 50%
compared to the production or output for the same time period one year
earlier.
The MSPA‘s legislative history also suggests that the MSPA provides from severance payments following a plant
closure rather than large-scale layoffs at a plant where operations continue. See Shapiro Bros. Shoe Co. v.
Lewiston-Auburn Shoeworkers Protective Ass‘n., 320 A.2d 247, 254 (Me. 1974) (―The obvious intent of the
Legislature in passing paragraphs two and three of the statute was to ameliorate the effects on a community when a
large employer voluntarily goes out of business.‖).
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B. The Director may, in addition to the foregoing, consider other factors
particular or unique to the operation of the establishment that go to the date of
termination or relocation.
C. No one factor is presumed to be controlling. In determining the date of
termination or relocation, the complete operations of the establishment may be
considered. If the director's determination of a covered establishment's date of
termination or relocation is based primarily on the fact that the covered
establishment has on that date reduced its number of employees, number of work
hours or production to less than 50% of that of the same time period one year
earlier, as described in factors 3, 4 and 5 of subsection A, the director's
determination is a presumption that may be overcome by evidence that the
covered establishment's operations did not substantially cease on that date.
170 C.M.R. Ch. 15 § II.
Plaintiff‘s reading of the regulations is simply incorrect.
Rather than determining
whether a termination – or a substantial cessation of operations – has occurred, the regulations
assist the Director in determining when termination occurred and, therefore, which former
employees are entitled to severance payments.4 See 170 C.M.R. Ch. 15 §§ II, III. Both the title
of the regulations – ―Determination of the Date of Termination or Relocation‖ – and the
language of the regulations are clear in this respect. The regulations instruct that ―[i]f the
Director determines that a termination or relocation of a covered establishment has occurred or
will occur, the Director shall determine the date of termination or relocation‖ based on the five
factors enumerated in subsection A. 170 C.M.R. Ch. 15 § II. As is clear from the language of
the regulations, this determination is different than determining whether ―termination‖ has
occurred under subsection 2 of the MSPA.
4
Presumably, the regulations are designed to address the fact that most facilities are wound down gradually, with
employees laid off over a period of time, rather than all at once. By allowing the Director to set a certain date of
termination that precedes the last day of operations, the regulations ensure that a larger percentage of employees
affected by termination are awarded severance. See 170 C.M.R. Ch. 15 § I(C). The regulations thereby contemplate
that employees laid off in the days and months leading up to the termination or relocation of a covered facility
would be entitled to severance pay.
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Plaintiff further argues that Section II(C) of the regulations instructs that a fifty percent
reduction from a year earlier in employees, hours worked or production constitutes a substantial
cessation of operations – the determination of which is an evidentiary issue subject to discovery.
Plaintiff again misreads the regulations. Section II(C) states in pertinent part that where the
director determines a date of termination or relocation based primarily on a reduction in the
number of employees, hours worked or production to less than fifty percent of that of the same
time period one year earlier, ―the director‘s determination is a presumption that may be
overcome by evidence that the covered establishment‘s operations did not substantially cease on
that date.‖ 170 C.M.R. Ch. 15 § II(C). Section II(C) – like the rest of Section II – applies when
a termination occurs and does not support a finding that a fifty percent reduction is a termination
under the MSPA. The evidentiary issue raised by Section II(C) is the issue of when termination
occurred, not whether it occurred. The issue in this case, on the other hand, is not when
termination occurred, but whether termination occurred.
To state a claim for relief under the MSPA for failure to pay severance, Plaintiff must
plead sufficient facts to show that Formed Fiber substantially ceased operations at a covered
establishment. Based on the plain meaning of the language of the MSPA, Plaintiff must plead
sufficient facts to show that it is plausible that a stoppage of operations occurred at the covered
establishment. Here, Plaintiff pled no facts concerning a stoppage of operations at the Auburn
facility. Accordingly, the Court finds that Plaintiff has failed to state a claim under the MSPA
for failure to pay severance.
IV.
CONCLUSION
For the foregoing reasons, the Court ORDERS that Defendant‘s Motion to Dismiss
(Docket # 8) is hereby GRANTED. Count II of Plaintiff‘s Complaint is hereby DISMISSED.
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To the extent Plaintiff‘s Response includes an unsupported request that it be granted leave to file
an amended complaint, the request is hereby DENIED as unsupported and futile.
SO ORDERED.
/s/ George Z. Singal
United States District Judge
Dated this 7th day of September, 2011.
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