Clark v. Lombardi

Filing 39

MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that Defendant Valitas Health Services, Inc.s motion to dismiss this claim as to itself is GRANTED. [Doc. # 31 ] Signed by Honorable Audrey G. Fleissig on 4/21/11. (KJS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
NORTHERN DIVISION

AARON CLARK,

)
)
Plaintiffs,
)
)
v.
)
)
GEORGE LOMBARDI, in his official )
capacity as the Director of the Missouri )
Department of Corrections, et al.,
)
)
Defendants.
)

Case No. 2:10CV00066 AGF

MEMORANDUM AND ORDER
This matter is before the Court on the motion to dismiss filed by Defendant Valitas
Health Services, Inc. (“Valitas”). Plaintiff sued multiple defendants, including Valitas,
under 42 U.S.C. § 1983 for alleged violations of his rights under the Eighth and
Fourteenth Amendments. For the reasons set forth below, Valitas’s motion to dismiss the
complaint as to it shall be granted.
BACKGROUND
Plaintiff is an inmate in the custody of the Missouri Department of Corrections
(“MDOC”). As relevant to the motion under consideration, Plaintiff alleges that after he
was attacked and rendered unconscious, the medical staff at the Western Missouri
Correctional Center (“WMCC”), where he was incarcerated, refused to provide him
appropriate medical treatment. Specifically, Plaintiff alleges that the medical staff
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initially refused to obtain any x-rays, CAT scans, or MRI’s of his cervical spine, and
instead accused Plaintiff of malingering. Over a month later, Plaintiff had an MRI of his
cervical spine, which revealed a spinal injury. Plaintiff underwent surgery, but is
nonetheless paralyzed from the neck down. Plaintiff alleges that the surgeons informed
him that his paralysis resulted from the delay in treatment.
Plaintiff asserts claims against eight MDOC employees, Correctional Medical
Services (“CMS”), various medical professionals whom CMS employed to treat him, and
Valitas. Plaintiff asserts that CMS was under contract to provide medical services to
inmates of MDOC, that Valitas is the parent corporation of CMS, and that Valitas,
through CMS, “exerted substantial control and engaged in . . . the provision of health care
services” to MDOC inmates, including Plaintiff. Plaintiff alleges that the medical
facilities at WMCC were “operated by” CMS and Valitas, among others, and that “[t]he
CMS and Valitas Health Care Defendants, by and through their agents, have engaged in a
widespread . . . policy, pattern and custom of denying emergent medical care” to inmates
with serious medical needs if such care is deemed too costly. (Compl. at 3, 9-10, 14.)
Valitas moves to be dismissed as a Defendant, asserting that the claims against it
“appear[] to arise solely because of its status as the parent corporation of CMS.” (Def.’s
Mem. at 6.) Valitas argues that Plaintiff did not allege that Valitas was “responsible for
the health care decisions and treatment of inmates,” nor that “Valitas physically controls
or operates” the medical treatment center at issue. Valitas cites law supporting the
proposition that parent companies are generally not liable for the torts of their
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subsidiaries, and states that Plaintiff failed to allege facts sufficient to pierce the corporate
veil.
Plaintiff responds that the facts he has alleged, along with their reasonable
inferences, are sufficient to both state a claim against Valitas as a state actor itself, and to
pierce Valitas’s corporate veil as CMS’s parent. Plaintiff specifically points to his
allegation that the WMCC medical unit was operated by Valitas, and that Valitas exerted
substantial control and engaged in the provision of health care services at WMCC.
Plaintiff characterizes his complaint as asserting that Valitas exercised its control through
a policy denying expensive emergency medical procedures.
DISCUSSION
A complaint must contain “a short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed. R. Civ. P. 8(a). To survive a 12(b)(6) motion to
dismiss, a complaint “does not need detailed factual allegations,” but the allegations must
nonetheless “be enough to raise a right to relief above the speculative level.” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007). This requires more than mere “labels and
conclusions,” id., and must state a claim that is “plausible on its face.” Id. at 570. “Where
a complaint pleads facts that are ‘merely consistent with’ a defendant's liability, it ‘stops
short . . . of ‘entitlement to relief.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)
(quoting Twombly, 550 U.S. at 557). For purposes of a motion to dismiss, this Court must
accept as true the facts alleged in the complaint. Ripplin Shoals Land Co., LLC v. U. S.
Army Corps of Eng’rs, 440 F.3d 1038, 1042 (8th Cir. 2006). Furthermore all reasonable
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inferences from Plaintiff’s complaint must be drawn in his favor. Crumpley-Patterson v.
Trinity Lutheran Hosp., 388 F.3d 588, 590 (8th Cir. 2004).
Generally, “someone injured by the conduct of a corporation or one of its
employees can look only to the assets of the employee or of the employer corporation for
recovery.” Radaszewski by Radaszewski v. Telecom Corp., 981 F.2d 305, 306 (8th Cir.
1992). Parent corporations are usually not responsible for the acts of their subsidiaries,
but “there are instances in which an injured person may ‘pierce the corporate veil’” and
also hold the parent liable. Id. To pierce the corporate veil, a plaintiff must show:
(1) Control, not mere majority or complete stock control, but complete
dominion, not only of finances, but of policy and business practice in respect
to the transaction attacked so that the corporate entity as to this transaction
had at the time no separate mind, will or existence of its own; and
(2) Such control must have been used by the defendant to commit fraud or
wrong, to perpetrate the violation of a statutory or other positive legal duty,
or dishonest and unjust act in contravention of plaintiff’s legal rights; and
(3) The aforesaid control and breach of duty must proximately cause the
injury or unjust loss complained of.
Id. (quoting Collet v. Am. Nat’l Stores, Inc., 708 S.W.2d 273, 284 (Mo. Ct. App. 1986)).
The court in Collet listed 11 factors to consider in deciding “whether one
corporation exercised control over another to the extent necessary” to pierce the corporate
veil, including whether the parent and subsidiary have common upper-management,
whether the subsidiary is “grossly” undercapitalized, whether there is commingling of
assets between the parent and subsidiary, and whether the subsidiary conducts virtually all
of its business with the parent. Collet, 708 S.W.2d at 284.
Here, Plaintiff does not provide any specific factual allegations regarding how
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Valitas controlled CMS. Plaintiff’s general allegations of substantial control and
widespread policies do not satisfy the pleading requirement for piercing the corporate veil.
See S.E. Texas Inns, Inc. v. Prime Hosp. Corp., 462 F.3d 666, 680 (6th Cir. 2006)
(upholding the dismissal of a corporate parent where there was no allegation that the
corporation was a sham or that the parent was abusing the corporate form); Seasword v.
Hilti, Inc., 537 N.W.2d 221, 225 (Mich. 1995) (stating that “plaintiff has not stated a
claim based on a parent subsidiary relationship because plaintiff has alleged no facts [that
the defendants] have abused their presumably separate and distinct corporate forms.”); cf.
Osgood v. Midwest Parking Solutions, No. 4:07CV1365SNLJ, 2009 WL 4825192, at *2-4
(E.D. Mo. Dec. 11, 2009) (denying a motion to dismiss where plaintiff alleged
commingling of assets, undercapitalization, and disregard for corporate formalities).
Although Plaintiff alleges that “CMS and Valitas Health Care . . . through their
agents” engaged in policies denying expensive medical procedures to Missouri inmates,
and that Valitas “operated” the WMCC medical facilities, he failed to provide any factual
support for these statements. Such “bare assertions” amount to nothing more than
conclusory allegations which are “not entitled to be assumed true.” See Iqbal, 129 S. Ct.
at 1951. “While legal conclusions can form the framework of a complaint, they must be
supported by factual allegations.” Id. at 1950. Here, they are not.

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CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Defendant Valitas Health Services, Inc.’s motion
to dismiss this claim as to itself is GRANTED. [Doc. #31]

_______________________________
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 21st of April, 2011.

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