NEIL V. WAKE, Senior District Judge.
Before the Court is Defendants' Partial Motion to Dismiss or for More Definite Statement (Doc. 25). On March 11, 2016, Defendants moved to dismiss Counts IV and V of the Second Amended Complaint for failure to state claims upon which relief can be granted. On April 11, 2016, the Court ordered that if Plaintiffs contended any further amendment of the Second Amended Complaint could cure any alleged deficiency, Plaintiffs must submit a proposed further amended complaint containing all further allegations Plaintiffs could make. The Court further ordered that no leave would be granted to amend the Second Amended Complaint beyond what was offered in the proposed further amended complaint. On April 22, 2016, Plaintiffs lodged a proposed Third Amended Complaint. Defendants' motion will be considered a motion to dismiss Counts IV and V of the proposed Third Amended Complaint.
On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), all allegations of material fact are assumed to be true and construed in the light most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). To avoid dismissal, a complaint need contain only "enough facts to state a claim for relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The principle that a court accepts as true all of the allegations in a complaint does not apply to legal conclusions or conclusory factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "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.
Plaintiffs Alfred and Sheree Levett are a married couple and the managing shareholders of Plaintiff Reel Precision, Inc. Defendants are FedEx Corporation, its wholly owned subsidiary FedEx Ground Package System, Inc., and two of its managers and their spouses. Reel Precision was formed for the purpose of contracting with FedEx to provide pick-up and delivery services in specific primary service areas or routes. Plaintiffs owned and operated the vehicles and other equipment used to perform package pick-ups and deliveries. They also hired other drivers to assist with the pick-up and delivery services. Plaintiffs performed services for FedEx pursuant to an operating agreement.
In 2012 FedEx managers formed a Contractor Safety Committee. During a meeting of the Contractor Safety Committee in November or December 2013, which Plaintiff Sheree Levett attended, Defendant Eric Pagano introduced a concept he referred to as the "walk of shame." Pagano explained that any driver or person related to the driver who was involved in a vehicle accident should be required to personally change the electronic signage displaying the number of days since the last accident. The signage was located so that any person who would be required to take the "walk of shame" would be observed by others.
On April 25, 2014, a driver hired by Plaintiffs was involved in a vehicle collision. On April 29, 2014, Sheree and Plaintiffs' driver met with Defendant Amy Gosselink to discuss the collision. Alfred was not present at the FedEx facility at the time. After the meeting, Gosselink told Sheree she was required to take the "walk of shame" by personally changing the electronic signage displaying the number of days since the last accident. When Sheree resisted, Gosselink coerced Sheree to comply and escorted her to the signage area. Sheree was extremely embarrassed and humiliated by being forced to change the signage in view of other personnel and drivers. Upon completing the "walk of shame," Sheree drove her vehicle to a secluded area and burst into tears. She was unable to concentrate or focus on her work. Subsequently, Sheree has experienced depression, anxiety, loss of concentration, and trembling.
Within a few days of taking the "walk of shame," Sheree spoke with FedEx's Contractor Relations Specialist, Vicki Perry. Perry told Sheree that she thought the "walk of shame" was disgusting and that she had lost sleep several nights after hearing that Sheree had been forced to take the "walk of shame." In May 2014, Alfred told Perry his concerns regarding Sheree being forced to take the "walk of shame" and regarding FedEx management forcing Plaintiffs to make delivery attempts beyond the requirements of their operating agreement without additional compensation. Alfred told Perry he believed compelling Sheree to take the "walk of shame" may have constituted illegal harassment and requiring delivery attempts beyond the requirements of their operating agreement without additional compensation illegally violated the terms of the operating agreement and applicable wage laws. Plaintiffs believe that Perry immediately conveyed Alfred's complaints to Pagano and Gosselink.
Another contractor for FedEx told Alfred that Gosselink subjecting Sheree to the "walk of shame" was "out of order." One of Plaintiffs' drivers said he wished he was present when it occurred because he would have stopped it from happening. Plaintiffs' driver who was involved in the collision said that Gosselink was a "bitch" because she made Sheree take the "walk of shame."
FedEx's policies prohibit harassment and retaliation against a person who reports in good faith any known or suspected misconduct. Plaintiffs are aware of other drivers who have been in vehicle collisions but neither the driver nor anyone related to the driver was similarly required to take the "walk of shame."
On July 10, 2014, Pagano notified Plaintiffs that he was recommending to FedEx that their contracts not be renewed. On July 14, 2014, Alfred requested a written explanation, which Pagano refused. Pagano's oral comments referred to Alfred complaining to Perry. On August 5, 2014, Alfred received notice of non-renewal effective October 9, 2014. No explanation for non-renewal was given.
Although the proposed Third Amended Complaint alleges that "Plaintiffs"— plural—suffered severe and debilitating emotional distress, Plaintiffs' response to the motion to dismiss states that "Ms. Levett has sufficiently pled all of the required IIED elements." (Doc. 31 at 6.) The response repeatedly refers to Ms. Levett's claim, but does not refer to any other Plaintiff having a claim for intentional infliction of emotional distress. Therefore, Count V is deemed to be pled only by Sheree Levett.
Under Arizona law, a claim for intentional infliction of emotional distress requires factual allegations showing that (1) Defendants engaged in "extreme" and "outrageous" conduct, (2) Defendants either intended to cause emotional distress or recklessly disregarded the near certainty that such distress would result from Defendants' conduct, and (3) Plaintiffs suffered "severe emotional distress" as a result of Defendants' conduct. Craig v. M & O Agencies, Inc., 496 F.3d 1047, 1058 (9th Cir. 2007); Ford v. Revlon, Inc., 153 Ariz. 38, 43, 734 P.2d 580, 585 (1987); Mintz v. Bell Atl. Sys. Leasing Int'l, Inc., 183 Ariz. 550, 553-54, 905 P.2d 559, 562-63 (Ct. App. 1995). "[C]onduct necessary to sustain an intentional infliction claim falls at the very extreme edge of the spectrum of possible conduct." Watts v. Golden Age Nursing Home, 127 Ariz. 255, 257, 619 P.2d 1032, 1035 (1980). It "must completely violate human dignity. The conduct must strike to the very core of one's being, threatening to shatter the frame upon which one's emotional fabric is hung." Pankratz v. Willis, 155 Ariz. 8, 15, 744 P.2d 1182, 1189 (Ct. App. 1987).
As explained in Restatement (Second) of Torts § 46 cmt. d:
The trial court must make a preliminary determination whether the conduct may be considered sufficiently "extreme" and "outrageous" to permit recovery. Nelson v. Phoenix Resort Corp., 181 Ariz. 188, 199, 888 P.2d 1375, 1386 (Ct. App. 1994). That issue may only go to the jury where "reasonable minds may differ." Id. Even unjustifiable conduct by a defendant does not necessarily rise to the level of "atrocious" and "beyond all possible bounds of decency" to be considered "outrageous" by an average member of the community. Id. Case-by-case analysis is required to determine whether a defendant's conduct is "outrageous." Lucchesi v. Frederic N. Stimmell, M.D., Ltd., 149 Ariz. 76, 79, 716 P.2d 1013, 1016 (1986).
Plaintiffs allege that the "walk of shame" is "atrocious" and "utterly intolerable" because four people made comments indicating that they were offended by it, Defendants intended to embarrass and humiliate Sheree, and the "walk of shame" violates company policies and Arizona laws prohibiting hazing and harassment. But the standard is not whether any individuals have actually exclaimed, "Outrageous!" The standard is an objective one: would an average person in this community consider the conduct to be so outrageous and so extreme as to go "beyond all possible bounds of decency" and to be "utterly intolerable"? Is the conduct more than mere insult and indignity?
Published decisions applying Arizona law show that an average member of the community would not find Defendants' conduct to be extreme and outrageous. See Craig v. M & O Agencies, Inc., 496 F.3d 1047, 1059 (9th Cir. 2007) (supervisor repeatedly propositioning employee, following employee into bathroom, and sticking his tongue in her mouth could be extreme and outrageous conduct); Mintz v. Bell Atl. Sys. Leasing Int'l, Inc., 183 Ariz. 550, 553-54, 905 P.2d 559, 562-63 (Ct. App. 1995) (firing an employee by letter delivered to hospital bed where the employee was being treated for severe emotional problems was not extreme and outrageous); Nelson v. Phoenix Resort Corp., 181 Ariz. 188, 199-200, 888 P.2d 1375, 1386 (Ct. App. 1994) (escorting employee out of premises in middle of night by armed security team, allowing employee to use bathroom on way out only if accompanied into stall by armed escorts, and firing employee in lobby in front of coworkers and media was not extreme and outrageous); Pankratz v. Willis, 155 Ariz. 8, 15, 744 P.2d 1182, 1189 (Ct. App. 1987) (stealing child from parent was extreme and outrageous); Ford v. Revlon, Inc., 153 Ariz. 38, 43, 734 P.2d 580, 585 (1987) (corporation's delay of more than a year in investigating an employee's claims of sexual assault and continuing threats and harassment by her supervisor, which led to the employee's attempted suicide, was extreme and outrageous); Midas Muffler Shop v. Ellison, 133 Ariz. 194, 198, 650 P.2d 496, 500 (Ct. App. 1982) (six phone calls over a three-month period by collection agency after payment was made was not extreme and outrageous); Watts v. Golden Age Nursing Home, 127 Ariz. 255, 257, 619 P.2d 1032, 1035 (1980) (nursing home's two-day delay in informing wife that her husband was diagnosed with terminal pneumonia, which caused his death four days after diagnosis, was not extreme and outrageous).
The Court finds that Defendants' alleged conduct does not raise an issue "where reasonable minds may differ." Requiring Sheree to personally change the electronic signage displaying the number of days since the last accident in the presence of other people may be a form of safety and personnel management few people would agree with. But the law does not mandate good management or outlaw fear management. Moreover, Sheree was personally present when it was introduced six months before in the Contractor Safety Committee meeting, so she knew of the plan. The complaint does not allege she raised any objection. This conduct falls well short of the level of "atrocious" and "beyond all possible bounds of decency" required for a claim of intentional infliction of emotional distress under Arizona law.
Therefore, Count V will be dismissed.
The Third Amended Complaint alleges that A.R.S. § 23-1501(A)(3)(c)(ii) prohibits an employer from discharging an employee
Plaintiffs do not allege they were terminated "in breach of an employment contract." A.R.S. § 23-1501(A)(3)(a). Nor do they allege they were terminated "in violation of a statute of this state." A.R.S. § 23-1501(A)(3)(b). Plaintiffs attempt to plead a claim under A.R.S. § 23-1501(A)(3)(c)(ii) for termination in retaliation for disclosing to FedEx that it "has violated, is violating, or will violate . . . the statutes of this state." Violations of three statutes are alleged to be complained about. The first is A.R.S. § 23-350 et seq. by failing "to pay an employee wages for all time worked." (Doc. 35-1 at 18.) The second is § 44-121 ("Every contract in writing imports a consideration."). The third is A.R.S. § 12-1809(S) by harassing Sheree by forcing her to take the "walk of shame."
Plaintiffs do not state a claim for retaliation under any of these bases, as Plaintiffs could not have had a "reasonable belief" that FedEx was violating "the statutes of this state" in light of the plain meaning of those statutes.
1. Despite four versions of their complaint and warning after the third that only one more would be considered, Plaintiffs do not specify which of the numerous sections of "A.R.S. § 23-350 et seq." they claim under. Whichever unnamed section it is, the remedy for failure to pay wages is "treble the amount of the unpaid wages." A.R.S. § 23-355(A). Alternatively, within one year an employee may file a claim "for unpaid wages" with the Arizona Department of Labor if the amount does not exceed $5,000. A.R.S. § 23-356(A). Those express statutory remedies are exclusive. A.R.S. § 23-1501(B).
Plaintiffs complained that FedEx wrongfully added tasks beyond what the Operating Agreement required and, because they really are employees, they are entitled to extra wages for performing extra tasks. If this is a valid wage claim, not just a breach of contract claim, the termination might look like a retaliation under A.R.S. § 23-1501(A)(3)(c)(ii) for complaining if that clause were read without consideration of the rest of the statute. But the clause is subject to subsection B, which limits the entire section to remedies provided in the underlying statute if a remedy is provided. Under general contract law, a party may breach and pay and still be free to terminate a contract terminable at will. By ignoring subsection B, Plaintiffs would turn this clause into a general entitlement to employment tenure any time an employer is said to have breached and the employee makes a claim to a higher-up. The legislature could say that, but it is unlikely to have said that in the same statute in which it said exactly the opposite.
2. Plaintiffs get no help from A.R.S. § 44-121, which states: "Every contract in writing imports a consideration." A preeminent American dictionary at the time defined the verb "import" as "[t]o bear or convey in meaning or implication; signify; mean; denote; betoken." 4 The Century Dictionary and Cyclopedia 3013 (1897). The statute has nothing to do with making it a violation of statute to fail to render agreed consideration. Nor does it mean that a valid contract with consideration is actionable by statute. It means that the writing itself constitutes or substitutes for consideration, eliminating the need to plead or prove consideration to enforce the contract. That had long been an historical effect of a sealing.
Storm v. United States, 94 U.S. 76, 84 (1876) (citations omitted).
This statute was enacted in 1901 to abolish the need for a private seal for the validity of any instrument. It restated in the affirmative that contracts in writing have the same effect on consideration doctrine as sealed instruments.
Rev. Stat. of 1901, §§ 4054, 4055 (emphasis added). The text explicitly gave contracts in writing the same presumption of consideration as sealed instruments.
The Revised Statutes of 1913 merged these two sections into one without textual change. Rev. Stat. of 1913, § 5564. The Struckmeyer Code deleted some words and phrases from the first sentence and deleted from the last sentence the words "in the same manner and as fully as sealed instruments have heretofore done." Rev. Code of 1928, § 3048. No doubt this was pursuant to the Code Commissioner's charge to "reduce in language" but not "make any change of existing laws." 1925 Ariz. Sess. Laws, ch. 35 § 3. The Arizona Code Annotated of 1939 made no change. A.C.A. of 1939 § 1-111. The Arizona Revised Statutes of 1956 similarly made no change but separated the two sentences into different sections, § 1-202 eliminating the need to seal any instrument in writing and § 44-121 for "Every contract in writing imports a consideration." The latter section has always had the same meaning: to put unsealed contracts in writing on the same footing for purposes of consideration as sealed contracts previously had. It said that expressly for the first 28 years, and it has continued to mean that since the surplusage was trimmed in 1928.
The only significant Arizona case confirms this. It holds a party suing on a contract in writing need not plead consideration and a party denying consideration must plead it specially, not by general denial:
Sapp v. Lifrand, 44 Ariz. 321, 324-25, 36 P.2d 794, 796 (1934) (citations omitted).
No claim of retaliatory termination can be grounded on A.R.S. § 44-121. The slightest inquiry into this statute would have shown that.
3. Arizona statutes provide an accelerated peace-keeping process for an "injunction against harassment." A.R.S. § 12-1809. It can be filed before any municipal magistrate, justice of the peace, or superior court judge anywhere in the state, regardless of the respondent's location. No security is required. Injunctions without notice are not prohibited, though a petitioner must show what efforts were made to give notice or why notice should not be given. In practice notice is rarely given. The addressee of the injunction can demand a hearing to lift the injunction, which must be held at the earliest possible time and within ten days.
The statute defines "harassment" as "a series of acts over any period of time that is directed at a specific person and that would cause a reasonable person to be seriously alarmed, annoyed or harassed and the conduct in fact seriously alarms, annoys or harasses the person and serves no legitimate purpose." A.R.S. § 12-1809(S). The only remedy under the statute is the injunction, but the same conduct may be actionable on other grounds.
Plaintiffs allege Sheree's subjection to the "walk of shame" was "harassment" under A.R.S. § 12-1809(S) and that complaining to higher-ups about it triggered a right against retaliatory termination under A.R.S. § 23-1501(A)(3)(c)(ii). Thus, voicing disagreement about a personnel policy gives the very tenure in employment that A.R.S. § 23-1501(A)(2) repudiates. Plaintiffs' discussion of this is devoid of analysis, consisting of four lines in the Third Amended Complaint, five lines in their Response, and nothing in their Supplemental Response. This retaliation claim fails as a matter of law on at least the following grounds:
—The "walk of shame" is not "harassment" under the plain language of § 12-1809(S). There was only one "walk of shame," not a series. It "serves a legitimate purpose"—employee safety incentive within the discretion of employers, whether or not wise, unless the act is specifically prohibited. The statute is not a mandate for courts to add new, unenumerated terms of labor regulation, already one of the most highly regulated activities in our society.
—The definition of "harassment" as "acts . . . that . . . seriously . . . harassed" . . . "a reasonable person" is circular. "Reasonable" includes everything that is not irrational and everything for which the opposing views are also reasonable. That raises serious questions of compliance with due process of law in statutory drafting. The word "harassment" alone is so overused and diluted that it has no reliable import for basing severe legal consequences on it. The statute should be construed narrowly in hopes of saving its constitutionality.
By no means would the "walk of shame" suffice under § 12-1809(S) to enter an injunction against harassment. The Plaintiffs could not reasonably believe it would.
Count IV fails to state any claim for retaliatory termination under A.R.S. § 23-1501(A)(3)(c)(ii). The motion to dismiss that claim will be granted.
Although leave to amend should be freely given "when justice so requires," Fed. R. Civ. P. 15(a)(2), five factors should considered: bad faith, undue delay, prejudice to the opposing party, futility of amendment, and whether the plaintiff has previously amended the complaint. Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004). "Futility alone can justify the denial of a motion to amend." Id. Leave to amend should be granted if the complaint's deficiencies can be cured with additional factual allegations that are consistent with and do not contradict allegations in the challenged pleading. United States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011). Dismissal without leave to amend is proper if the complaint cannot be cured by any amendment. Id. Courts have "especially broad" discretion to deny leave to amend where the plaintiff already has had one or more opportunities to amend a complaint. Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1161 (9th Cir. 1989); Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 538 (9th Cir. 1989). In this case, Plaintiffs were expressly warned after the Second Amended Complaint that the Third would be the last opportunity to amend. They have had ample opportunity to amend, they have not sought leave to file a fifth complaint, and they have not suggested anything more they could plead to cure the deficiencies.
Counts IV and V will be dismissed with prejudice.
IT IS THEREFORE ORDERED granting Plaintiffs leave to file their proposed Third Amended Complaint ("redline" version lodged as Doc. 35-1).
IT IS FURTHER ORDERED that Defendants' Partial Motion to Dismiss or for More Definite Statement (Doc. 25) is granted and Count V (Intentional Infliction of Emotional Distress) and Count IV (Statutory Retaliatory Termination) of the Third Amended Complaint are dismissed with prejudice.
