Noonan v. Goldstar Estate Buyers Corporation

Filing 36

OPINION AND ORDER: Defendants' Motion to Dismiss Plaintiffs' Amended Complaint 25 is GRANTED, Plaintiffs are granted 30 days to replead. Ordered by Magistrate Judge Dennis J. Hubel. (kb)

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UNITED STATES DISTRICT COURT

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DISTRICT OF OREGON

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PORTLAND DIVISION

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KELLY KELSEY, CHRISTINE KOTROUS,
LINDA NOONAN, CHRISTINE OTTENS,
RITA ROBERTSON, KARYN SUGGS, and
SHERRY WICKLER,

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Plaintiffs,
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v.
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GOLDSTAR ESTATE BUYERS CORPORATION,
a Minnesota corporation, and
WILLIAM ULRICH, an individual,

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Defendants.
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William A. Barton
Brent Barton
THE BARTON LAW FIRM, P.C.
214 S.W. Coast Highway
P.O. Box 870
Newport, Oregon 97365

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Of Attorneys for Plaintiffs
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Christopher E. Hawk
Daniel J. Nichols
Kjersten H. Turpen
GORDON REES LLP
121 S.W. Morrison St., Suite 1575
Portland, Oregon 97204
Of Attorneys for Defendants
Page 1 - OPINION AND ORDER

No. 3:13-cv-00354-HU
OPINION AND
ORDER

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HUBEL, Magistrate Judge:
This matter comes before the Court on Defendants Goldstar

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Estate

Buyers

Corporation

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(“Ulrich”) (collectively “Defendants”) motion to dismiss Plaintiffs

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Kelly Kelsey (“Kelsey”), Christine Kotrous (“Kotrous”), Linda

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Noonan (“Noonan”), Christine Ottens (“Ottens”), Rita Robertson

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(“Robertson”),

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(“Wickler”) (collectively “Plaintiffs”) amended complaint, pursuant

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to Federal Rule of Civil Procedure (“Rule”) 12(b)(6), for failure

Karyn

(“Goldstar”)

Suggs

(“Suggs”),

and

and

William

Sherry

Ulrich’s

Wickler’s

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to state a claim upon which relief can be granted.

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that follow, Defendants’ motion (Docket No. 25) to dismiss is

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GRANTED.

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For the reasons

I. FACTS AND PROCEDURAL HISTORY
The facts are drawn from the amended complaint.

Plaintiffs

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are all former employees of Goldstar who worked under the direction

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of Ulrich, an owner, agent and employee of Goldstar.1

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behalf

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throughout the United States to buy and sell jewelry and other

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valuable items.

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rooms, and employees working alongside Ulrich at a given location

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were provided with overnight lodging, food and transportation.

of

Goldstar,

Ulrich

would

travel

to

Acting on

various

cities

Ulrich operated Goldstar’s business out of hotel

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Plaintiffs are residents of different states and were employed

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by Goldstar for varying durations, ranging from six days to nearly

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eight years, between September 2004 and November 2012.

Wickler is

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Plaintiffs’ claims against Defendants appear to be based
solely on actions taken by Ulrich within the scope of his
employment or agency. For convenience, the Court at times refers
only to Ulrich when describing acts allegedly performed by both
defendants.
Page 2 - OPINION AND ORDER

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a Pennsylvania resident who worked for Goldstar from September 2004

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to June 2012.

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Goldstar from January 2008 to March 2008, and April 2011 to June

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2012.

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from September 2009 to June 2012.

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who worked for Goldstar from January 2011 to November 2011.

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is a California resident who worked for Goldstar from February 2011

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to June 2012.

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Goldstar from March 2011 to November 2012.

Ottens is an Oklahoma resident who worked for

Robertson is an Arizona resident who worked for Goldstar
Kelsey is a California resident
Suggs

Kotrous is an Oregon resident who worked for
Noonan is an Oregon

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resident who worked for Goldstar from May 16, 2011, through May 22,

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2011.

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On a continuing basis throughout their periods of employment,

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it is alleged that Ulrich forced or attempted to force each of the

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seven female plaintiffs to engage in sexual intercourse, sometimes

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in exchange for an additional monetary incentive; group sex; anal

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sex; oral sex, sometimes in exchange for an additional monetary

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incentive; sexual acts while others observed; the procurement of

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sexual devices; the procurement of prostitution services; travel-

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related arrangements involving out-of-state prostitutes; and/or the

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procurement of sex partners. The amended complaint does not allege

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any specific incidents with reference to dates, times, the exact

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parties

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Plaintiffs allege Ulrich compelled compliance by instilling a fear

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that he would withhold from Plaintiffs the necessities of life,

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such as food, shelter, money, and/or continued employment.

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The

involved

amended

or

locations

complaint

where

alleges

the

causes

incidents

of

action

occurred.

for

(1)

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involuntary servitude in violation of ORS 30.867; (2) trafficking

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in persons in violation of ORS 30.867; (3) sex trafficking in
Page 3 - OPINION AND ORDER

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violation of the Trafficking Victims Protection Reauthorization Act

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(“TVPRA”), 18 U.S.C. § 1595 (hereinafter “§ 1595 or “civil remedy

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provision”); (4) forced labor in violation of § 1595; (5) sex

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discrimination in violation of ORS 659A.030; (6) sex discrimination

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in violation of Title VII of the Civil Rights Act of 1964 (“Title

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VII”), 42 U.S.C. § 2000e to 2000e-17 (Kotrous, Ottens and Robertson

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only); (7) wrongful discharge under Oregon law (Kotrous and Noonan

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only); (8) negligence under Oregon law; and (9) breach of the

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implied covenant of good faith and fair dealing under Minnesota

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law.2
On January 21, 2014, Defendants filed a motion to dismiss

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Plaintiffs’

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12(b)(6).

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a United States Magistrate Judge.

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Defendants’ motion to dismiss was fully briefed as of February 24,

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2014, and the Court heard argument on the pending motion on March

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17, 2014.

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amended

complaint

in

its

entirety,

pursuant

to

The parties have consented to have their case heard by
See 28 U.S.C. § 636(c)(1).

II. LEGAL STANDARD
A court may dismiss a complaint for failure to state a claim

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upon which relief can be granted pursuant to Rule 12(b)(6).

In

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considering a Rule 12(b)(6) motion to dismiss, the court must

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accept all of the claimant’s material factual allegations as true

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and view all facts in the light most favorable to the claimant.

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Reynolds v. Giusto, No. 08-CV-6261, 2009 WL 2523727, at *1 (D. Or.

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2

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Noonan filed the original complaint against Goldstar on
March 1, 2013, alleging claims for breach of the implied covenant
of good faith and fair dealing, wrongful discharge, intentional
infliction of emotional distress, and negligence.
Page 4 - OPINION AND ORDER

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Aug. 18, 2009).

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standard under Rule 12(b)(6) in Bell Atlantic Corp. v. Twombly, 550

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U.S. 544 (2007).

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sufficient in the pleadings to give proper notice of the claim and

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its basis: “While a complaint attacked [under] Rule 12(b)(6) . . .

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does

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obligation to provide the grounds of his entitlement to relief

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requires

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recitation of the elements of a cause of action will not do.”

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not

need

more

The Supreme Court addressed the proper pleading

Twombly established the need to include facts

detailed

than

factual

labels

and

allegations,

conclusions,

a

and

plaintiff’s

a

formulaic
Id.

at 555 (brackets omitted).

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Since Twombly, the Supreme Court has clarified that the

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pleading standard announced therein is generally applicable to all

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cases governed by the Rules, not only to antitrust cases. Ashcroft

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v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009).

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court explained that Twombly was guided by two specific principles.

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First, although the court must accept as true all facts asserted in

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a pleading, it need not accept as true any legal conclusion set

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forth in a pleading.

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facts supporting a plausible claim for relief and not merely a

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possible

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“[d]etermining whether a complaint states a plausible claim for

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relief will . . . be a context-specific task that requires the

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reviewing court to draw on its judicial experience and common

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sense.”

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F.3d 143, 157-58 (2d Cir. 2007)).

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legal conclusions can provide the framework of a complaint, they

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must be supported by factual allegations.

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pleaded factual allegations, a court should assume their veracity

claim

for

Id.

relief.

The Iqbal

Second, the complaint must set forth

Id.

The

court

instructed

that

Iqbal, 129 S. Ct. at 1949-50 (citing Iqbal v. Hasty, 490

Page 5 - OPINION AND ORDER

The court concluded: “While

When there are well-

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and

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entitlement to relief.”

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then

determine

whether

they

plausibly

give

rise

to

an

Id. at 1950.

The Ninth Circuit further explained the Twombly-Iqbal standard

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in Moss v. U.S. Secret Service, 572 F.3d 962 (9th Cir. 2009).

The

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Moss court reaffirmed the Iqbal holding that a “claim has facial

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plausibility when the plaintiff pleads factual content that allows

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the court to draw the reasonable inference that the defendant is

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liable for the misconduct alleged.” Moss, 572 F.3d at 969 (quoting

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Iqbal, 129 S. Ct. at 1949).

The court in Moss concluded by

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stating: “In sum, for a complaint to survive a motion to dismiss,

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the non-conclusory factual content, and reasonable inference from

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that content must be plausibly suggestive of a claim entitling the

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plaintiff to relief.”

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Moss, 572 F.3d at 969.
III. DISCUSSION

A.

Claims Under ORS 30.867

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Plaintiffs’ first two causes of action, which are predicated

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on allegations of involuntary servitude and trafficking in persons,

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are brought pursuant to ORS 30.867.

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relevant part:

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That statute provides, in

Irrespective of any criminal prosecution or the result of
a criminal prosecution, a person injured by a violation
of ORS 163.263 (Subjecting another person to involuntary
servitude in the second degree) . . . or [ORS] 163.266
(Trafficking in persons) may bring a civil action for
damages against a person whose actions are unlawful under
[those statutes].

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OR. REV. STAT. § 30.867(1).

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the

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servitude

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authority forces or attempts to force the other person to engage in

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services by,” among other things, “[i]nstilling in the other person

crime
.

of
.

Under ORS 163.263, “[a] person commits

subjecting
.

if

the

Page 6 - OPINION AND ORDER

another

person

person

knowingly

and

to

involuntary

without

lawful

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a fear that the actor will withhold from the other person the

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necessities of life, including but not limited to lodging, food and

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clothing.”

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provides that:

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OR. REV. STAT. § 163.263(1).

ORS 163.266 similarly

A person commits the crime of trafficking in persons if
the person knowingly:

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(a) Recruits, entices, harbors, transports, provides or
obtains by any means, or attempts to recruit, entice,
harbor, transport, provide or obtain by any means,
another person knowing that the other person will be
subjected to involuntary servitude as described in ORS
163.263 . . . or
(b) Benefits financially or receives something of value
from participation in a venture that involves an act
prohibited by this section or ORS 163.263[.]
OR. REV. STAT. § 163.266(1).
In

their

first

cause

of

action,

Plaintiffs

allege

that

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Defendants “knowingly, and without lawful authority, forced and/or

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attempted to force [them] to engage in services including, but not

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limited to” one or more of the sex-related incidents previously

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described above.

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Plaintiffs allege Defendants compelled compliance by instilling a

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fear that they “would withhold from Plaintiffs the necessities of

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life, including but not limited to, food, shelter, money, and/or

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continued employment.” (Am. Compl. ¶ 8.) In their second cause of

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action,

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transported and/or harbored [them] with knowledge that [they] would

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be subject to” the aforementioned sex-related incidents, and that

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“Defendants benefitted financially and/or received something of

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value by virtue of their participation” in those incidents.

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Compl. ¶¶ 14-15.)

Plaintiffs

(Am. Compl. ¶ 8.)

allege

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Page 7 - OPINION AND ORDER

that

Mirroring ORS 163.263(1),

“Defendants

recruited,

hired,

(Am.

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The Court agrees with Defendants that Plaintiffs’ allegations

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fall short under the facial plausibility standard. The allegations

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pled in support of the first and second causes of action appear to

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be conclusions (which the Court is not required to accept as true)

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and are formulaic recitations of the language of the relevant

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statutes.

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Plaintiffs’ amended complaint, they must be supported by factual

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allegations.

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Plaintiffs’ causes of action under ORS 30.867, with leave to

While legal conclusions can provide the framework of

The Court grants Defendants’ motion to dismiss

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replead consistent with the discussion at oral argument.

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B.

Claims Under the TVPRA

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Plaintiffs’ third and fourth causes of action, which are

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predicated on allegations of forced labor and sex trafficking, are

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brought pursuant to the TVPRA’s civil remedy provision.

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remedy provision provides:

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The civil

An individual who is a victim of a violation may bring a
civil action against the perpetrator (or whoever
knowingly benefits, financially or by receiving anything
of value from participation in a venture which that
person knew or should have known has engaged in an act in
violation of this chapter) in an appropriate district
court of the United States and may recover damages and
reasonable attorneys fees.

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18 U.S.C. § 1595(a); see also Velez v. Sanchez, 693 F.3d 308, 324

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(2d Cir. 2012) (“amending the civil cause of action to remove

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references to specific crimes and therefore expanding its scope to

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include forced labor” (citing Pub. L. No. 110-457, § 221, 122 Stat.

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5044, 5067 (2008))).

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The federal forced labor statute provides:

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Whoever knowingly provides or obtains the labor or
services of a person by any one of, or by any combination
of, the following means——(1) by means of force, threats

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Page 8 - OPINION AND ORDER

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of force, physical restraint, or threats of physical
restraint to that person or another person; (2) by means
of serious harm or threats of serious harm to that person
or another person; (3) by means of the abuse or
threatened abuse of law or legal process; or (4) by means
of any scheme, plan, or pattern intended to cause the
person to believe that, if that person did not perform
such labor or services, that person or another person
would suffer serious harm or physical restraint, shall be
punished as provided under subsection (d).

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18 U.S.C. § 1589(a).

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definitions:

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Section 1589(c) includes the following

(1) The term ‘abuse or threatened abuse of law or legal
process’ means the use or threatened use of a law or
legal process, whether administrative, civil, or
criminal, in any manner or for any purpose for which the
law was not designed, in order to exert pressure on
another person to cause that person to take some action
or refrain from taking some action.
(2) The term ‘serious harm’ means any harm, whether
physical or nonphysical, including psychological,
financial, or reputational harm, that is sufficiently
serious, under all the surrounding circumstances, to
compel a reasonable person of the same background and in
the same circumstances to perform or to continue
performing labor or services in order to avoid incurring
that harm.

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18 U.S.C. § 1589(c).

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The federal sex trafficking statute provides:

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Whoever knowingly (1) in or affecting interstate
commerce . . . recruits, entices, harbors, transports,
provides, obtains, or maintains by any means a person; or
(2) benefits, financially or by receiving anything of
value, from participation in a venture which has engaged
in an act described in violation of paragraph (1),
knowing, or in reckless disregard of the fact, that means
of force, threats of force, fraud, coercion . . . or any
combination of such means will be used to cause the
person to engage in a commercial sex act, or that the
person has not attained the age of 18 years and will be
caused to engage in a commercial sex act, shall be
punished as provided in subsection (b).

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18 U.S.C. § 1591(a); see also United States v. Todd, 627 F.3d 329,

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335 (9th Cir. 2010) (Smith, J., concurring) (“Where a defendant

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24
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Page 9 - OPINION AND ORDER

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engages in sex trafficking without the use of force, fraud, or

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coercion, or where children are not involved, his conduct is

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criminalized by a different set of statutes.”).

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Section 1591(e) includes the following definitions:

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(1) The term ‘abuse or threatened abuse of law or legal
process’ means the use or threatened use of a law or
legal process, whether administrative, civil, or
criminal, in any manner or for any purpose for which the
law was not designed, in order to exert pressure on
another person to cause that person to take some action
or refrain from taking some action.

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(2) The term ‘coercion’ means: (A) threats of serious
harm to or physical restraint against any person; (B) any
scheme, plan, or pattern intended to cause a person to
believe that failure to perform an act would result in
serious harm to or physical restraint against any person;
or (C) the abuse or threatened abuse of law or the legal
process.
(3) The term ‘commercial sex act’ means any sex act, on
account of which anything of value is given to or
received by any person.
(4) The term ‘serious harm’ means any harm, whether
physical or nonphysical, including psychological,
financial, or reputational harm, that is sufficiently
serious, under all the surrounding circumstances, to
compel a reasonable person of the same background and in
the same circumstances to perform or to continue
performing commercial sexual activity in order to avoid
incurring that harm.

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(5) The term ‘venture’ means any group of two or more
individuals associated in fact, whether or not a legal
entity.

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18 U.S.C. § 1591(e).
In

their

third

cause

of

action,

Plaintiffs

allege

that

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“Defendants recruited, hired, transported and/or harbored [them]

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with knowledge and/or in reckless disregard that force, threat of

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force and/or coercion would be used to cause [them] to engage in

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sex acts in exchange for employment and/or maintenance of job

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status”

(Am.

Compl.

¶

17),

Page 10 - OPINION AND ORDER

and

that

“Defendants

benefitted

1

financially and/or received something of value by virtue of their

2

participation and/or knowledge and/or constructive knowledge in the

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conduct alleged in paragraph [seventeen] herein” (Am. Compl. ¶ 18).

4

In their fourth cause of action, Plaintiffs allege that “Defendant

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knowingly obtained labor and/or services of Plaintiffs, [such as

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the sex-related incidents], by means of serious harm, threats of

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harm,

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Plaintiffs to believe that if they did not perform such labor or

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services, they would suffer serious harm.”

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and/or

a

scheme,

plan,

or

pattern

These allegations are deficient.

intended

to

cause

(Am. Compl. ¶ 22.)

They do not allege facts.

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They are simply a regurgitation of the statutes’ wording woven

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together with conclusory statements and a generous use of “and/or.”

13

Accordingly,

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Plaintiffs’ third and fourth causes of action under the civil

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remedy provision, with leave to replead.

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sufficient to state a claim, it will only be so if sufficient

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factual allegations are made of the actual exercise of force, the

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threats made of the potential use of force, the physical restraints

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used

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Plaintiffs or was threatened in sufficient detail to demonstrate a

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violation of the statutes relied upon.

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C.

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or

the

Court

threatened,

grants

and

what

Defendants’

motion

to

dismiss

Whether it is ultimately

serious

harm

actually

befell

Sex Discrimination Under Title VII
Kotrous, Ottens and Robertson are the only named plaintiffs

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who

bring

a

cause

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discrimination under Title VII.

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employment practice “to discharge any individual, or otherwise to

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discriminate

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compensation, terms, conditions, or privileges of employment,

against

of

any

Page 11 - OPINION AND ORDER

action

against

Defendants

for

sex

Title VII makes it an unlawful

individual

with

respect

to

his

1

because

of

such

individual’s

.

.

.

sex.”

42

U.S.C.

§

2

2000e–2(a)(1).

3

when the complaining party demonstrates that . . . sex . . . was a

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motivating factor for any employment practice, even though other

5

factors also motivated the practice.”

“[A]n unlawful employment practice is established

42 U.S.C. § 2000e-2(m).

6

“In order to state a claim for sex discrimination, [a]

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[p]laintiff must establish that [he or] she was subject to adverse

8

employment action because of [his or] her sex.”

9

of Los Angeles, No. CV 13–895, 2013 WL 3119178, at *5 (C.D. Cal.

10

May 16, 2013); see also Jespersen v. Harrah's Operating Co., Inc.,

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392 F.3d 1076, 1079 (9th Cir. 2004) (“In order to prevail on a

12

Title VII disparate treatment sex discrimination claim, an employee

13

need only establish that, but for his or her sex, he or she would

14

have been treated differently.”).

15

Defendants

Kotrous,

argue

Ottens

that

allegations

discrimination claim fail under Rule 8 and the facial plausibility

18

standard.

19

complaint describing any events that specifically occurred between

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these three women and Ulrich.

21

allegations pertaining to all seven women——all of whom claim that

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one

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employment at unspecified dates, locations, etc.

24

Court grants Defendants’ motion to dismiss Kotrous, Ottens and

25

Robertson’s sex discrimination claims under Title VII.

sex-related

Title

VII

in

17

more

Robertson’s

pled

support

The Court agrees.

and

the

16

or

of

generally

Zamudio v. County

sex

There is nothing in the amended

There are only general, conclusory

incidents

took

place

during

their

Accordingly, the

26

It should also be noted that Kostrous, Ottens and Robertson

27

fail to specify when they received their ninety-day right to sue

28

letters from the Equal Employment Opportunity Commission (“EEOC”).
Page 12 - OPINION AND ORDER

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They may either allege the date of that letter or attach it if they

2

choose to amend this claim.

3

Bank Nat’l Ass’n, No. 3:12–CV–01220–HU, 2013 WL 4431293, at *4 (D.

4

Or. Aug. 14, 2013) (explaining that a plaintiff cannot evade

5

dismissal by omitting the date of a right-to-sue letter from her

6

complaint);

7

3:10–cv–1044–HU, 2011 WL 7452732, at *5 (D. Or. Sept. 30, 2011).

8

D.

9

see

also

See generally Phi Cam Luong v. U.S.

Boon

v.

Union

Pac.

R.

Co.,

No.

Sex Discrimination Under ORS 659A.030
All

seven

plaintiffs

bring

a

cause

of

action

against

10

Defendants for sex discrimination under ORS 659A.030.

11

sex-based discrimination provision, it is an unlawful employment

12

practice for an employer to discriminate against an individual in

13

compensation or in terms, conditions or privileges of employment

14

because of the individual’s sex.

15

Under the

OR. REV. STAT. § 659A.030(1)(b).

Plaintiffs’ state law sex discrimination claim fails to give

16

notice of each of the named plaintiff’s claim and its basis.3

17

amended complaint is replete with general, conclusory allegations

18

pertaining to all seven of the named plaintiffs, often times tied

19

to together with the conjunction “and/or.”

20

Plaintiffs’ amended complaint alleges a possible claim for sex

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discrimination under ORS 659A.030, not a plausible claim.

The

In the Court’s view,

That is

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23
24
25
26
27
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3

At minimum, Kotrous, Ottens and Robertson’s state law sex
discrimination claim fails for the reasons previously stated. See
Heller v. EBB Auto Co., 8 F.3d 1433, 1437 n.2 (9th Cir. 1993)
(stating that a plaintiff’s claim under ORS 659.030 “succeeds or
fails with his Title VII claim” because courts construe Oregon’s
statutory counterpart as identical to Title VII); Pullom v. U.S.
Bakery, 477 F. Supp. 2d 1093, 1100 (D. Or. 2007) (“Because ORS
659A.030 is modeled after Title VII, plaintiff’s state law
discrimination claim can be analyzed together with her federal
discrimination claim.”).
Page 13 - OPINION AND ORDER

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insufficient under Twombly and Iqbal.

2

grants Defendants’ motion to dismiss Plaintiffs’ sex discrimination

3

claim under ORS 659A.030, with leave to replead.

4

must allege what happened to each plaintiff factually, a factual

5

basis to conclude it was motivated by her gender, and resulted in

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an identified adverse action.

7

E.

8
9

Accordingly, the Court

Any amendment

Wrongful Discharge
Kotrous and Noonan are the only named plaintiffs who bring a

cause of action against Defendants for wrongful discharge.

To

10

prevail on a claim of wrongful discharge under Oregon law, a

11

plaintiff “must establish a ‘causal connection’ between a protected

12

activity and the discharge.”

13

App. 372, 381 (1998) (quoting Shockey v. City of Portland, 313 Or.

14

414, 442 (1992)).

15

“the employee’s protected activity [was] a ‘substantial factor’ in

16

the motivation to discharge the employee.” Id. (citation omitted).

17

“[T]o be a substantial factor, the employer's wrongful purpose must

18

have

19

decision.”

been

a

Estes v. Lewis & Clark Coll., 152 Or.

A “causal connection” requires a showing that

factor

that

made

a

difference

in

the

discharge

Id. (internal quotation marks omitted).

20

Defendants move to dismiss Kotrous and Noonan’s wrongful

21

discharge claims on the ground that Title VII and ORS 659A.030

22

provide

23

Kotrous and Noonan respond by arguing that their wrongful discharge

24

claims arise from conduct that is not actionable under Title VII

25

and ORS 659A.030——namely, a claim for retaliation for refusing to

26

engage in unlawful activity.

27
28

Kotrous

During

oral

and

Noonan

argument,

with

adequate

Defendants

statutory

challenged

remedies.

Kotrous

and

Noonan’s assertion that their wrongful discharge claims arise from
Page 14 - OPINION AND ORDER

1

conduct not actionable under Oregon law, citing ORS 659A.030(1)(f).

2

Cases from this district appear to support Defendants’ position.

3

One example is Gladfelder v. Pacific Courier Services, LLC, No.

4

3:12–cv–02161–SI, 2013 WL 2318840 (D. Or. May 28, 2013), where

5

Judge Simon dismissed a plaintiff’s wrongful discharge on similar

6

grounds, stating:

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8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

[ORS] 659A.885(3) applies to claims brought under [ORS]
659A.030. . . . [I]t appears to the Court, and was
confirmed by Plaintiff’s counsel during oral argument,
that: (1) Plaintiff’s fourth claim (alleging sex
discrimination) is brought under [ORS] 659A.030(1)(b)
(discrimination in conditions of employment); (2)
Plaintiff’s fifth claim (alleging retaliation) is brought
under [ORS] 659A.030(1)(f) (discrimination based on
opposition to an unlawful practice); and (3) Plaintiff’s
sixth claim (alleging hostile work environment) is
brought under [ORS] 659A.030(1)(b) (discrimination in
conditions of employment because maintaining a hostile
work environment is a subset of discrimination).
In
addition, although Plaintiff does not expressly invoke
[ORS] 659A.030(1)(g) (aiding and abetting liability) but
refers only to [ORS] 659A generally, it appears to the
Court that Plaintiff relies upon [ORS] 659A.030(1)(g) as
the basis for [the sole owner and chairman of the
board]’s personal liability, in addition to [the
company]’s alleged liability as Plaintiff’s employer. In
light of [ORS] 659A.885(3) inclusion of [ORS] 659A.030
among the provisions giving rise to a personal claim for
compensatory and punitive damages as well as a right to
trial by jury, [the sole owner co-defendant] is correct
when he argues that Oregon statutory law provides an
adequate remedy for Plaintiff’s claimed injury and
damages.
. . . .
Because Plaintiff has the right to a jury trial and
the right to seek compensatory and punitive damages for
her fourth, fifth, and sixth claims, Oregon law provides
an adequate remedy, and her ninth claim, alleging
wrongful constructive termination, is dismissed.
Id. at *3-4 (internal citations omitted) (emphasis added).

26

Consistent with Judge Simon’s decision in Gladfelder, the

27

Court grants Defendants’ motion to dismiss Kotrous and Noonan’s

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wrongful discharge claim.
Page 15 - OPINION AND ORDER

1

F.

Negligence

2

“To state a claim for negligence under Oregon law, a plaintiff

3

must allege a duty of care owed by the defendant, a breach of that

4

duty,

5

1:11–cv–3161–CL, 2013 WL 5372539, at *8 (D. Or. Sept. 23, 2013).

6

“If a plaintiff invokes a special status, relationship, or standard

7

of conduct, that relationship may create, define, or limit the

8

defendant’s duty to the plaintiff.” Id. Absent such circumstances,

9

a defendant’s liability for harm that his conduct causes is

10

analyzed in terms of the concept of “reasonable foreseeability” or

11

“general foreseeability.”

causation,

and

damages.”

Nattell

v.

Curry

County,

No.

Id.

12

In their amended complaint, Plaintiffs allege that Defendants

13

had a duty to their employees, including Plaintiffs, to: (1)

14

“provide a safe workplace and to train, supervise and/or control

15

its employees to prevent unlawful discrimination, harassment and/or

16

retaliation in the workplace” (Am. Compl. ¶ 34), and (2) “promptly

17

and effectively . . . discipline and/or terminate agents or

18

employees they knew or should have known subjected employees,

19

including Plaintiffs, to unlawful discrimination, harassment and/or

20

retaliation in the workplace” (Am. Compl. ¶ 35).

21

Plaintiffs go on to allege that Defendants were negligent in

22

one or more of the following particulars: (1) by failing to train

23

employees, agents and/or managers not to unlawfully discriminate,

24

harass and/or retaliate in the workplace; (2) failing to supervise

25

their employees, agents and/or managers; (3) failing to properly

26

discipline their employees, agents and/or managers; (4) failing to

27

terminate the employment of any employees, agents and/or managers

28

who Defendants knew or should have known engaged in unlawful
Page 16 - OPINION AND ORDER

1

conduct or failed to take the necessary preventative measures; and

2

(5)

3

discrimination, harassment and/or retaliation.

failing

to

prevent

and/or

remedy

the

aforementioned

4

Defendants argue that the allegations pled in support of

5

Plaintiffs’ negligence claim fail under Rule 8 and the facial

6

plausibility standard.

7

claims, specific factual allegations for each plaintiff must be

8

made regarding what happened to them and how this conduct had come

9

to the corporate defendant and its managers’ attention, but had not

The Court agrees.

As with the other

10

resulted in any meaningful response.

11

sufficient to allege whether directly, or by incorporation, that

12

generally all plaintiffs suffered a general list of harassing

13

situations.

14

discrimination statutes may be relied on to establish the duty to

15

Plaintiffs, general allegations the duty was breached is not

16

enough.

17

problems without alleging a factual basis for the knowledge.

18

Accordingly,

19

Plaintiffs’ negligence claim, with leave to replead.

20

G.

While

the

employment

That is to say, it’s not

relationship

and

the

Nor is it sufficient to allege Defendants knew of the

the

Court

grants

Defendants’

motion

to

dismiss

Breach of Good Faith and Fair Dealing

21

Plaintiffs bring a cause of action against Defendant for

22

breach of the implied covenant of good faith and fair dealing under

23

Minnesota law.

24

that Minnesota law does not recognize an implied covenant of good

25

faith and fair dealing in employment contracts.

26

Oracle Corp., 324 F.3d 661, 668 (8th Cir. 2003); see also Bratton

27

v. Menard, Inc., 438 N.W. 2d 116, 118 (Minn. App. 1989).

Defendants move to dismiss the claim on the ground

28
Page 17 - OPINION AND ORDER

See Brozo v.

Rather,

1

absent a contrary contractual arrangement, employees serve at the

2

will of their employer.

3

Plaintiffs

Id.

respond

by

relying

on

Minnesota

cases

where

4

employee handbooks had modified the parties’ employment contract to

5

require good faith in discharge.

6

suggests the existence of an employment handbook, let alone a

7

handbook that modified the at-will nature of their employment.

8

Defendants’ motion to dismiss Plaintiffs’ claim for breach of the

9

implied covenant of good faith and fair dealing is granted, with

10

Nothing in the amended complaint

leave to replead in a manner consistent with Rule 11.

11

IV. CONCLUSION

12

For the reasons stated, Defendants’ motion (Docket No. 25) to

13

dismiss is GRANTED. Plaintiffs are granted thirty days to replead.

14

Dated this

21st

day of March, 2014.

15

/s/ Dennis J. Hubel
_________________________________
DENNIS J. HUBEL
United States Magistrate Judge

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25
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