LINDA V. PARKER, District Judge.
Marianne D. Guzall ("Ms. Guzall"), a former employee of Defendant City of Romulus ("City" or "Romulus"), filed this lawsuit against Defendants as a qui tam action alleging violations of the federal False Claims Act ("FCA"), and as an individual action alleging violations of her rights under federal and state law. Specifically, Ms. Guzall alleges the following counts in her four hundred and twelve paragraph Amended Complaint:
(Pl.'s Am. Compl., ECF No. 4.) Defendants are the City, the City's former mayor Alan R. Lambert ("Mayor Lambert"), and the City's former chief of staff Betsey Krampitz ("Ms. Krampitz"). The matter presently is before the Court on separate motions for summary judgment filed by Defendants. (ECF Nos. 153, 154, 171.) The motions have been fully briefed. Finding the facts and the parties' legal arguments sufficiently presented in their submissions, the Court is dispensing with oral argument with respect to the motions pursuant to Eastern District of Michigan Local Rule 7.1.
Summary judgment pursuant to Federal Rule of Civil Procedure 56 is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The central inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). After adequate time for discovery and upon motion, Rule 56 mandates summary judgment against a party who fails to establish the existence of an element essential to that party's case and on which that party bears the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The movant has the initial burden of showing "the absence of a genuine issue of material fact." Id. at 323. Once the movant meets this burden, the "nonmoving party must come forward with specific facts showing that there is a genuine issue for trial." Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal quotation marks and citation omitted). To demonstrate a genuine issue, the nonmoving party must present sufficient evidence upon which a jury could reasonably find for that party; a "scintilla of evidence" is insufficient. See Liberty Lobby, 477 U.S. at 252. The court must accept as true the non-movant's evidence and draw "all justifiable inferences" in the non-movant's favor. See Liberty Lobby, 477 U.S. at 255.
"A party asserting that a fact cannot be or is genuinely disputed" must designate specifically the materials in the record supporting the assertion, "including depositions, documents, electronically stored information, affidavits or declarations, stipulations, admissions, interrogatory answers, or other materials." Fed. R. Civ. P. 56(c)(1). Rule 56 provides that "[a]n affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify to the matters stated." Fed. R. Civ. P. 56(c)(4). "In order to survive a motion for summary judgment, the non-moving party must be able to show sufficient probative evidence that would permit a finding in his favor on more than mere speculation, conjecture, or fantasy." Lewis v. Philip Morris, Inc., 355 F.3d 515, 533 (6th Cir. 2004) (internal quotations and brackets omitted).
Notably, the trial court is not required to construct a party's argument from the record or search out facts from the record supporting those arguments. See, e.g., Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479-80 (6th Cir. 1989) ("the trial court no longer has a duty to search the entire record to establish that it is bereft of a genuine issue of material fact") (citing Frito-Lay, Inc. v. Willoughby, 863 F.2d 1029, 1034 (D.C. Cir. 1988)); see also InterRoyal Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir. 1989), cert. denied, 494 U.S. 1091 (1990) ("A district court is not required to speculate on which portion of the record the nonmoving party relies, nor is it obligated to wade through and search the entire record for some specific facts that might support the nonmoving party's claim."). The parties are required to designate with specificity the portions of the record such that the court can "readily identify the facts upon which the . . . party relies[.]" InterRoyal Corp., 889 F.2d at 111.
In 2001, Mayor Lambert was elected mayor of Romulus. Upon his election, Mayor Lambert hired Ms. Krampitz to serve in an administrative position similar to the one she held under a previous mayor. In November 2001, Mayor Lambert hired Ms. Guzall to serve as his administrative assistant. This was the most junior position within the office. (Guzall 12/4/15 Dep. at 28, ECF No. 154-4.) Ms. Guzall had no prior experience working for the City.
The City of Romulus Charter provides that "[t]here shall be administrative secretaries for the Mayor, Clerk and Treasurer. They shall be hired by the official they serve. They will be non-union and non-civil service." (Lambert's Mot., Ex. B, ECF No. 171-3.) During her deposition in this matter, Ms. Guzall acknowledged that she served in an appointed position at the pleasure of the mayor and was not subject to union membership. (Guzall 12/4/15 Dep. at 30-31, ECF No. 154-4.) Relying on the language of the City of Romulus Charter, however, Ms. Guzall asserted that she was not an at-will employee and could be terminated only for cause. (Id. at 28.) Specifically, Ms. Guzall testified that the City's finance director, Debra Hoffman, and its human resources director, Carol Mayerich, told her that her "job was protected by the city charter." (Id.)
In 2006, Mayor Lambert promoted Ms. Krampitz to serve as his chief of staff, and he hired Julie Wojtylko ("Ms. Wojtylko") to fill the position Ms. Krampitz previously occupied. (Wojtylko Dep. at 8, 13, ECF No. 154-3; Krampitz Dep. at 10-11, ECF No. 154-2.) Ms. Guzall was passed over for the promotion given to Ms. Wojtylko, which Ms. Guzall had expected to receive. (Guzall 12/4/15 Dep. at 57, ECF No. 154-4.) Ms. Wojtylko began working for Romulus through a co-op program at her high school in 1985, and she held various positions throughout the City before Mayor Lambert hired her. (Wojtylko Dep. at 11-13, ECF No. 154-3.)
In her Complaint and during her deposition, Ms. Guzall contends that Mayor Lambert, Ms. Krampitz, other City officials and employees, and several Romulus residents engaged in improper and/or illegal acts during Ms. Guzall's tenure with the City. For example, Ms. Guzall claims that Mayor Lambert and Ms. Krampitz listed, or directed other employees to list, individuals as donors on campaign finance reports when, according to Ms. Guzall, those individuals did not donate money to Mayor Lambert's campaign. Ms. Guzall also claims that Mayor Lambert and Ms. Krampitz failed to deposit and report cash donations and directed employees to use Romulus supplies and work on Mayor Lambert's campaign during city business hours. According to Ms. Guzall, she reported this misconduct to the City's Attorney, Barry Seifman, but he did nothing.
Beginning in 2009, Romulus, like many other Michigan municipalities, began experiencing a shortfall in revenue due to a decrease in funds received from the state and from property taxes.
Within this context, Romulus decided to lay off twenty-eight full-time city employees between June and August 2010. (Mayerich Aff. ¶ 5, ECF No. 154-7; Hoffman Aff. ¶ 8.) The record fails to reflect who decided which positions would be eliminated; however, the City's finance director, Debra Hoffman, attests in her affidavit that these decisions "were made and ultimately agreed upon collectively and objectively by a team of persons representing the various departments." (Hoffman Aff. ¶ 15.) Among the employees laid off between June and August 2010 were City police officers, firefighters, and department of public works employees. (Mayerich Aff. ¶ 6.) No one in the mayor's office was impacted by the layoffs. (Id. ¶ 9.) The City further reduced its costs by reducing the hours of its senior center and closing the public library and recreation department between June and August 2010. (Id. ¶¶ 7-8.)
Seeking to avoid additional cuts to city personnel and services, in August 2010, Romulus voters were asked to approve a millage increase to pay for police and fire services. (Hoffman Aff. ¶ 9.) The voters rejected the increase. (Id. ¶ 10.) On November 8, 2010, the Romulus City Council voted to hold a special election on a 2.75 millage increase proposal for general operation services in February 2011. (Id. ¶ 12; 11/8/10 Romulus Council Meeting Minutes, ECF No. 154-8.) In the event the millage did not pass, the City prepared to implement a second reduction-in-force, laying off an additional nine full-time employees and three part-time employees. (Mayerich Aff. ¶ 10.) Notices to the targeted employees informed them that they were being laid off effective March 11, 2011 due to budget cuts, but that the notice would be rescinded if Romulus residents voted in favor of the millage on February 22, 2011. (Id. ¶ 14; Wojtylko Dep. at 185, ECF No. 154-3.)
Ms. Guzall was among the employees laid off during this second reduction-in-force. (Mayerich Aff. ¶ 11.) According to Carol Mayerich, the City's director of human resources from 2007-2013, she told Mayor Lambert that the March 2011 reduction-in-force needed to include one position in his office and thus an existing member of his staff. (Id. ¶ 12.) Ms. Guzall's position was selected for elimination because it would have the least impact on the continued operation of the mayor's office. (Id. ¶ 13.) The parties fail to identify who, specifically, made this determination or was part of the team making the layoff decisions.
According to Ms. Guzall, "they" told her not to clean out her desk and that she would be brought back to work within three months of being laid off. (Guzall 6/28/16 Dep. at 53.) Ms. Guzall testified that Mayor Lambert told her not to look for another job because if they could not find a position for her in his office, they would let her float between the mayor's office, clerk's office, and human resources. (Id. at 80.) Romulus did not return Ms. Guzall to work, however. Over time, some laid off employees did regain employment. (Guzall 12/4/15 Dep. at 81.) However, no employee assumed Ms. Guzall's former position.
Prior to her layoff, Ms. Guzall had several discussions that she believes were the cause of the layoff decision. First, in May 2010, while Ms. Guzall was on vacation, she received a telephone call from Ms. Wojtylko who was upset because the Michigan State Police had contacted her for an interview in connection with its investigation of the Romulus Police Department. (Guzall 6/28/16 Dep. at 54-55, ECF No. 154-4.) According to Ms. Guzall, she told Ms. Wojtylko that Ms. Wojtylko should not lie for anyone and that she (Ms. Guzall) would not lie for the mayor. (Id. at 54-55, 59.)
Ms. Guzall further testified that on the day she returned from her vacation, she spoke to Ms. Wojtylko and Ms. Krampitz about the Michigan State Police investigation and again stated that, if interviewed, she would tell the truth. (Id. at 53-54, 59, 77.) According to Ms. Guzall, Ms. Krampitz responded, "we're gonna give you a pink slip today" and then she gave Ms. Guzall a pink slip.
This last exchange apparently occurred when the City was deciding who would be laid off during the first reduction-in-force in June 2010. (Id. at 108.) In fact, Ms. Guzall testified that when Ms. Krampitz gave her the pink slip, they were headed into a meeting where other employees' names would be called to receive a pink slip, but hers was "just for show." (Id. at 78.) Despite allegedly receiving this pink slip, Ms. Guzall was not laid off at this time.
According to Ms. Guzall, some time prior to when she in fact was laid off, she met with Leroy Burcroff, mayor pro tem and chairman of the city council ("Mayor Pro Tem Burcroff"), and told him about the illegal and/or improper activities in the mayor's office.
On May 3, 2012, three months after Ms. Guzall was laid off, the Michigan State Police interviewed her in connection with its investigation of wrongdoing within the City. (Lambert's Mot., Ex. J, ECF No. 171-11.) Apparently, the initial investigation into misconduct within the Romulus Police Department uncovered suspected illegalities within the mayor's office. (City's Mot., Ex. 11, ECF No. 153-12.)
In Count I of her Amended Complaint, Ms. Guzall asserts that she was laid off in retaliation for her speech in violation of the First Amendment to the United States Constitution.
"A public employee has a constitutional right to comment on matters of public concern without fear of reprisal from the government as employer." Taylor v. Keith, 338 F.3d 639, 643 (6th Cir. 2003) (citing Connick v. Myers, 461 U.S. 138, 140, 145-46 (1983); Pickering v. Bd. of Educ., 391 U.S. 563, 574 (1986)). "`Retaliation by a government employer against an individual who exercises h[er] First Amendment rights constitutes a First Amendment violation.'" Id. (quoting Perry v. McGinnis, 209 F.3d 597, 604 (6th Cir. 2000)). The Sixth Circuit utilizes a three-step test for evaluating a public employee's First Amendment retaliation claim:
Taylor, 338 F.3d at 643.
With respect to the first prong, the plaintiff need not have spoken to the press or the public for her speech to be protected. Id. (citing Givhan v. W. Line Consol. Sch. Dist., 439 U.S. 410, 412 (1979)); see also, e.g., Perry v. McGinnis, 209 F.3d 597, 608 (6th Cir. 2000). Thus in Taylor, the Sixth Circuit held that the First Amendment protected reports and statements the plaintiffs, a police officer and police sergeant, made internally to other members of their police department. Id. Similarly, in Perry, the appellate court held that the plaintiff's complaints about a matter of public concern made in private conversations to his supervisors were protected. 209 F.3d at 608. As the Supreme Court reasoned in Givhan: "Neither the [First] Amendment itself nor our decisions indicate that [freedom of speech] is lost to the public employee who arranges to communicate with his employer rather than to spread his views before the public." 439 U.S. at 415-16.
Speech touches upon a matter of public concern if it can be "fairly considered as relating to any matter of political, social or other concern to the community." Connick, 461 U.S. at 146. "[W]hen a public employee speaks not as a citizen upon matters of public concern, but instead as an employee upon matters only of a personal interest," his or her speech is not entitled to constitutional protection. Id. at 147. "Whether an employee's speech addresses a matter of public concern must be determined by the content, form, and context of a given statement, as revealed by the record as a whole." Id. at 147-48. The Sixth Circuit has held that "speech disclosing public corruption is a matter of public interest." Solomon v. Royal Oak Twp., 842 F.2d 862, 865 (6th Cir. 1998); see also Marohnic v. Walker, 800 F.2d 191 (6th Cir. 1986) (stating that "[p]ublic interest is near its zenith when ensuring that public organizations are being operated in accordance with the law").
To satisfy the third prong of this three-part test, the plaintiff "`cannot rely on the mere fact that an adverse employment action followed speech that the employer would have liked to prevent.'" Taylor, 338 F.3d at 646 (quoting Cockrel, 270 F.3d at 1055). "Rather, to survive a motion for summary judgment, the employee must present sufficient evidence linking his [or her] speech to the employer's adverse decision so that a reasonable factfinder could conclude, by a preponderance of the evidence, that the speech, at least in part, motivated the decision to discharge." Id.
Defendants uniformly argue that Ms. Guzall cannot establish the third element necessary to establish her First Amendment retaliation claim: causation. This Court agrees.
First, Ms. Guzall presents no probative evidence to show that Ms. Krampitz or Mayor Lambert were involved in the City's lay-off decisions or that anyone involved in the decision was aware of Ms. Guzall's alleged protected conduct.
Ms. Guzall claims that Ms. Krampitz gave her a "pink slip" in May 2010, after Ms. Guzall stated that she would not lie if interviewed by the Michigan State Police. As an initial matter, Ms. Guzall's broad statement that she would tell the truth if interviewed, without any elaboration regarding what she would reveal, does not establish that she spoke on a matter of public concern entitling her to First Amendment protection. In any event, this "pink slip" did not result in Ms. Guzall suffering an adverse action. The span of time between this interaction and Ms. Guzall's actual layoff in early 2011 is too long to conclude, without more, that Ms. Guzall's statement motivated the layoff decision. See Clark Cty. Sch. Distr. v. Breeden, 532 U.S. 268, 273 (2001) (explaining that "[t]he cases that accept mere temporal proximity between an employer's knowledge of protected activity and an adverse employment action as sufficient evidence of causality to establish a prima facie case uniformly hold that the temporal proximity must be `very close,'" and citing cases finding three and four month gap insufficient); see also Clay v. United Parcel Serv., Inc., 501 F.3d 695 (6th Cir. 2007) (holding temporal proximity of six months between the filing of the plaintiff's EEOC complaint and his termination insufficient to satisfy causation element); Nguyen v. City of Cleveland, 229 F.3d 559, 567 (6th Cir. 2000) (finding one-month gap, without more, insufficient to establish causation).
Even if there was evidence to support Ms. Guzall's assertion that she was laid off a few months after reporting improper and/or illegal activities in the mayor's office to Mayor Pro Tem Burcroff, Ms. Guzall's assertion that Mr. Burcroff made the decision to include her in the layoff is based on hearsay and pure speculation and conjecture. See Mitchell v. Toledo Hosp., 964 F.2d 577, 584-85 (6th Cir. 1992) (providing that rumors, conclusory allegations, and subjective beliefs are insufficient to create a genuine issue of material fact).
During her deposition, when asked if she had any facts suggesting that Mr. Burcroff had any input into the decision to include her in the second round of layoffs, Ms. Guzall responded: "He was in the meeting where they determined who was going to be laid off." (Guzall 12/4/15 Dep. at 124.) Ms. Guzall indicated that she was not at the meeting, but Ms. Wojtylko "told [Ms. Guzall]." (Id.) What precisely Ms. Wojtylko told Ms. Guzall is unclear from Ms. Guzall's deposition testimony. Further, what Ms. Wojtylko told Ms. Guzall constitutes inadmissible hearsay and there is no indication from Ms. Wojtylko's deposition that she would support Ms. Guzall's assertion.
To demonstrate a connection between her speech and layoff, Ms. Guzall relies heavily on Virginia Williams' affidavit, in which Ms. Williams states that she "had several conversations with Betsey Krampitz regarding the employment of Marianne Guzall." (Williams Aff. ¶ 2, ECF No. 123-6.) There are multiple levels of inadmissible hearsay within Ms. Williams' affidavit, and her conclusion that "[Ms.] Guzall was wrongfully fired/laid off" is mere speculation and conjecture. As such, her statements are insufficient to establish that Ms. Guzall was terminated because of her protected activity. See Fed. R. Civ. P. 56(e); Mitchell, 964 F.2d at 584-85. Moreover, Ms. Williams' affidavit does not establish that any individual who purportedly stated that Ms. Guzall "had to be let go" because she "talks too much" or because she complained to Mayor Pro Tem Burcroff was involved in the layoff decision.
Ms. Guzall is correct that a defendant may be liable under 42 U.S.C. § 1983 even if the defendant did not execute the adverse action, but if his or her acts gave rise to the ultimate harm. See, e.g., King v. Zamiara, 680 F.3d 686, 695 (6th Cir. 2012). Yet, Ms. Guzall lacks evidence to show that Ms. Krampitz or Mayor Lambert took any action that gave rise to the decision to lay her off. Her assumption or speculation that they influenced the decision is insufficient to survive summary judgment.
For these reasons, the Court concludes that Defendants are entitled to summary judgment with respect to Ms. Guzall's First Amendment retaliation claim.
"Under the FCA, it is illegal to present a false claim for payment to the [federal] government."
31 U.S.C. § 3730(h)(1).
A retaliation claim brought under the FCA, 31 U.S.C. § 3730(h), overlaps a First Amendment retaliation claim in that the plaintiff must show that she engaged in protected activity known to her employer and that the employer took an adverse action against the plaintiff as a result of the protected activity. McKenzie v. BellSouth Telecomms., Inc., 219 F.3d 508, 514 (6th Cir. 2000) (citations omitted). Protected activity under the FCA is limited, however, to activity "done . . . in furtherance of an action under [31 U.S.C. § 3730] or other efforts to stop 1 or more violations of this subchapter." 31 U.S.C. § 3730(h)(1). The Sixth Circuit has held that courts should "broadly construe the plaintiff's protected activity[.]" McKenzie, 219 F.3d at 515. Nevertheless, the court also cautioned that this "does not eliminate the necessity that the actions be reasonably connected to the FCA" and "that they relate to exposing fraud or involvement with a false claims disclosure." Id. at 515-16 (quotation marks and citations omitted).
For the reasons discussed with respect to Ms. Guzall's First Amendment retaliation claim, she fails to create a genuine issue of material fact with respect to whether Defendants took an adverse action against her because of protected activity. Moreover, Ms. Guzall fails to establish that she even engaged in activity protected under the FCA. Neither Ms. Guzall's Amended Complaint nor her deposition testimony suggest that she disclosed evidence of fraud on the federal government with respect to claims for payment.
The FCA places several restrictions on a relator's ability to bring a qui tam action, one of which is the public-disclosure bar in 31 U.S.C. § 3730(e)(4)(A).
Graham Cty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280, 286 (2010) (brackets in original) (quoting 31 U.S.C. § 3730(e)(4)(A) (1986) (footnote omitted)). Pursuant to this provision, "when the basis of the lawsuit has been publicly disclosed in advance, the person filing the action must be the original source of the information that a false claim has been presented." Antoon, 788 F.3d at 614 (citing United States ex rel. Poteet v. Medtronic, Inc., 552 F.3d 503, 507 (6th Cir. 2009)). If the relator cannot establish that she is an original source of the information, the court (under the pre-2010 version of the statute) lacks subject matter jurisdiction and must dismiss the action.
Defendants assert that the fraudulent conduct Ms. Guzall alleges in her Amended Complaint was publicly disclosed through the Michigan State Police investigation of the City, which was reported in the media. Ms. Guzall does not contradict Defendants' assertion. Instead, she argues she is the original source of the information.
Congress has defined an "original source" as someone "who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information." 31 U.S.C. § 3730(e)(4)(B) (1986). The statute's reference to "Government" means the "federal government." See Antoon, 788 F.3d at 617 (citing United States ex rel. Jones v. Horizon Healthcare Corp., 160 F.3d 326, 334-35 (6th Cir. 1998)). Not only must the relator have provided information to the federal government prior to filing her FCA lawsuit, she "must also provide the government with the information upon which the allegations are based prior to any public disclosure." Poteet, 552 F.3d at 515 (quoting Jones, 160 F.3d at 333-34) (brackets, ellipsis, and additional citation removed).
There is no requirement "that the qui tam relator possess direct and independent knowledge of all of the vital ingredients to a fraudulent transaction." Antoon, 788 F.3d at 619 (internal quotation marks and citations omitted, emphasis in original). Nevertheless, the qui tam relator's conclusion that fraud occurred cannot be "`based on pure speculation or conjecture.'" Id. at 620 (quoting United States ex rel. Aflatooni v. Kitsap Physicians Servs., 163 F.3d 516, 526 (9th Cir. 1998)). "`Mere suspicion that there must be a false or fraudulent claim lurking around somewhere simply does not carry a relator's burden of proving that he is entitled to original source status.'" Id. (quoting United States ex rel. Vuyyura v. Jadhav, 555 F.3d 337, 353 (4th Cir. 2009)).
The evidence does not reflect that Ms. Guzall has direct and independent knowledge of a false claim made by Defendants to the federal government. Ms. Guzall only suspects that Defendants made false claims and, as mentioned earlier, it does not appear that any claims fall within the FCA's proscriptions. This is insufficient to qualify her as an original source. Moreover, there is no evidence that Ms. Guzall alerted the federal government to the alleged fraud before filing this lawsuit.
For the above reasons, the Court concludes that Ms. Guzall's retaliation claim under the FCA is subject to dismissal.
In Count II of her Amended Complaint, Ms. Guzall alleges that Defendants violated the FCA. For the reasons discussed above, Defendants are entitled to summary judgment with respect to this claim.
In Count II, Ms. Guzall also asserts a RICO claim against Defendants. Specifically, Ms. Guzall alleges: "Defendants and other co-conspirators engaged in the illegal act of fraud against the United States Government in violation of 18 U.S.C.A. § 371 (RICO) Racketeer Influenced and Corrupt Organizations Act, and 26 USCA [sic] 7201 . . ." (Am. Compl. ¶ 232, ECF No. 4 at Pg ID 142.)
RICO's civil enforcement scheme includes the following provision for private lawsuits:
18 U.S.C. § 1964(d). A plaintiff has standing to assert a RICO claim, and can only recover to the extent that, "he has been injured in his business or property by the conduct constituting the [RICO] violation." Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985) (emphasis added). "[B]oth personal injuries and pecuniary losses flowing from those personal injuries fail to confer relief under § 1964(c)." Jackson v. Sedgwick Claims Mgmt. Servs., Inc., 731 F.3d 556, 565-66 (6th Cir. 2013) (citations omitted). Defendants seek summary judgment with respect to Ms. Guzall's RICO claim, arguing, in part, that she fails to demonstrate an injury sufficient to grant her RICO standing.
In response to Defendants' summary judgment motions, Ms. Guzall does not identify an injury to her business or property resulting from Defendants' asserted RICO activity. Ms. Guzall responds only with a quotation from and citation to case law indicating that indirect injuries confer standing. (See, e.g., Pl.'s Resp. to City's Mot. at 38-39, ECF No. 157 at Pg ID 3126-27, quoting Cty. of Oakland by Kuhn v. City of Detroit, 784 F.Supp. 1275, 1283-84 (E.D. Mich. 1992)); but see Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 457 (2006) (holding that the injury required to confer RICO standing can be neither remote, purely contingent, nor indirect). Nevertheless, Ms. Guzall never identifies the indirect injury she suffered to her business or personal property.
To the extent Ms. Guzall is asserting an indirect injury due to Defendants' alleged "bilking the U.S. Federal Government out of tens of thousands of dollars" in tax revenue (see Am. Compl. ¶ 234), this is insufficient to confer standing. See Illinois ex rel. Ryan v. Brown, 227 F.3d 1042, 1045-46 (7th Cir. 2000) (holding that the plaintiff, a taxpayer whose asserted injury was based upon the state's lost revenue following the misappropriation of government funds, lacked standing); Amsterdam Tobacco Inc. v. Philip Morris Inc., 107 F.Supp.2d 210, 219-20 (S.D.N.Y. 2000) ("Where, as here, the primary purpose of an alleged racketeering enterprise is to avoid paying taxes or otherwise defraud the government, indirectly injured parties do not have standing to bring RICO claims."); see also Anza, 547 U.S. at 458 (holding that the defendant's act of lowering prices was entirely distinct from its alleged RICO fraud of not charging sales tax, which defrauded the State of New York, not the plaintiff, a competitor company of defendant). While taxpayers and residents in general may be indirectly harmed by RICO conduct wasting a city's funds or depriving the government of tax revenue, these are not sufficiently direct injuries to sustain a RICO action. As the Supreme Court has held, standing cannot be premised upon such "generalized grievance[s]" that are "plainly undifferentiated and common to all members of the public." United States v. Richardson, 418 U.S. 166, 176-77 (1974).
Because Ms. Guzall fails to establish that she has standing to bring her RICO claim, Defendants are entitled to summary judgment with respect to this claim.
In Count III of the Amended Complaint, Ms. Guzall asserts a promissory estoppel claim based on Defendants' alleged promises that she would not be laid off and, when she was, that she would be returned to work with the City.
Under Michigan law, a claim for promissory estoppel has four elements: "`(1) a promise, (2) that the promisor should reasonably have expected to induce action of a definite and substantial character on the part of the promisee, (3) which in fact produced reliance or forbearance of that nature, (4) in circumstances such that the promise must be enforced if injustice is to be avoided.'" Gason v. Dow Corning Corp., ___ F. App'x ___, 2017 WL 65564, at *5 (6th Cir. Jan. 6, 2017) (quoting Leila Hosp. & Health Ctr. v. Xonics Med. Sys., Inc., 948 F.2d 271, 275 (6th Cir. 1991)) (additional citations omitted). "`The doctrine of promissory estoppel is cautiously applied[.]'" Id. (quoting Marrero v. McDonnell Douglas Capital Corp., 505 N.W.2d 275, 278 (Mich. Ct. App. 1993) (per curiam)). To be actionable, the promise must be clear and definite. DBI Investments, LLC v. Blavin, 617 F. App'x 374, 385 (6th Cir. 2015) (citing State Bank of Standish v. Curry, 500 N.W.2d 104, 108 (Mich. 1993)). The Michigan Supreme Court has "emphasized that `the reliance interest protected by promissory estoppel is reasonable reliance.'" Id. (quoting Curry, 500 N.W.2d at 107) (emphasis in original and brackets removed). Defendants argue that Ms. Guzall cannot establish any of the elements necessary to prevail on her promissory estoppel claim.
In fact, the Court finds no evidence of a clear and definite promise by Defendants that Ms. Guzall would keep her job. Ms. Guzall relates Mayor Lambert's and Ms. Krampitz's promises that she would not be laid off; however, these promises were made when Ms. Guzall returned from vacation in March 2010, during the first round of layoffs when she in fact was not laid off. (12/4/15 Guzall Dep. at 83, 139.) With respect to any promise to bring her back to work, even if it was reasonable for Ms. Guzall to rely on those promises, she fails to explain how she detrimentally relied on Defendants' promises.
Defendants therefore are entitled to summary judgment with respect to Ms. Guzall's promissory estoppel claim.
In Count IV of her Amended Complaint, Ms. Guzall alleges that Defendants did not afford her due process consistent with the Fourteenth Amendment of the United States Constitution when she was laid off.
"The requirements of procedural due process apply only to the deprivation of interests encompassed by the Fourteenth Amendment's protection of liberty and property." Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 569 (1972). Property interests "are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law — rules or understandings that secure certain benefits and that support claims of entitlement to those benefits." Id. at 577; Chilingirian v. Boris, 882 F.2d 200, 203 (6th Cir. 1989).
In Michigan, employment contracts for an indefinite term are presumed to be at-will and may be terminated by either party at any time for any reason. Rood v. Gen. Dynamics Corp., 507 N.W.2d 591, 597 (Mich. 1993) (citation omitted); see also Pucci v. Ninteenth Dist. Court, 628 F.3d 752, 766 (6th Cir. 2010) (citing Lytle v. Malady, 579 N.W.2d 906-910-11 (Mich. 1998) ("Michigan law generally presumes that employment relationships are `at-will' arrangements; at-will employees, in turn, have no property interest in their continued employment."). The Sixth Circuit has concluded that "a public employee does not have a property interest in continued employment when his position is held at the will and pleasure of his superiors and when he has not been promised that he will only be terminated for good cause." Chilingirian, 882 F.2d at 203 (citations omitted). Nevertheless, a party may overcome the presumption of at-will employment in one of three ways:
Pucci, 628 F.3d at 766 (quoting Lytle, 579 N.W.2d at 911).
It is undisputed that Ms. Guzall held her position with the City at the pleasure of Mayor Lambert, who hired her for the position. (12/4/15 Guzall Dep. at 31.) Ms. Guzall nevertheless claims that she was a just-cause employee based on statements by Ms. Krampitz and the City's finance and human resources directors, Ms. Hoffman and Ms. Mayerich, respectively. (12/4/15 Guzall Dep. at 28.) According to Ms. Guzall, these individuals told her that "[her] job was protected by the city charter[,]" specifically the provision stating that the mayor shall have a secretary. (Id. at 28-29.) These statements are not sufficient to overcome the presumption that Ms. Guzall's position was at-will.
The city charter reads in pertinent part: "There shall be administrative secretaries for the Mayor . . ." (Lambert's Mot., Ex. B, ECF No. 171-3.) This provision simply guarantees the mayor an administrative secretary. It does not promise the individual serving in that position job security, a definite term of employment, or forbid discharge absent cause. Ms. Guzall does not otherwise relate a clear and unequivocal express agreement concerning her job security, identify a contractual provision forbidding her discharge absent just cause or promising her employment for a definite period, or point to a City policy or procedure instilling a legitimate expectation of job security.
In short, Ms. Guzall fails to present evidence to establish that she had a constitutionally protected interest in her position with the City. Defendants, therefore, are entitled to summary judgment with respect to her due process claim.
Count IV of Ms. Guzall's Amended Complaint includes "hostile work environment" in its title and she refers to a hostile work environment in two paragraphs within this count:
(Am. Compl. ¶¶ 314-315, ECF No. 4 at Pg ID 152.) As the remaining paragraphs of her Amended Complaint referring to a hostile work environment suggest (id. ¶¶ 21, 24, 98, 120), and as Ms. Guzall confirms in response to Defendants' motions, the essence of her hostile work environment claim is that she was subjected to a hostile work environment in retaliation for engaging in protected activity. (See, e.g., Pl.'s Resp. to City's Mot. at 31-35, ECF No. 157 at Pg ID 3119-23.)
The Court's first step in addressing Ms. Guzall's hostile work environment claim is determining the law on which she premises her claim. At first glance it appears that Ms. Guzall is relying on 42 U.S.C. § 1983. (See id. at 33, Pg ID 3121, quoting Sharpe v. Cureton, 319 F.3d 259, 267-68 (6th Cir. 2003).) Yet, § 1983 "is a remedial statute which does not create substantive rights." Day v. Wayne Cty. Bd. of Auditors, 749 F.2d 1199, 1202 (6th Cir. 1984) (citing Chapman v. Houston Welfare Rights Organization, 441 U.S. 600, 616-18 (1979)). Instead, "it provides a remedy for the violation of rights created elsewhere." Id. Thus in Sharpe, the plaintiffs were asserting a § 1983 claim based on the violation of their First Amendment rights. See Sharpe, 319 F.3d at 261.
This Court already evaluated Ms. Guzall's ability to survive summary judgment on her First Amendment and FCA retaliation claims. To the extent she is asserting a retaliatory harassment claim under Title VII, Ms. Guzall first must establish a prima facie case by showing: "that (1) she engaged in activity protected by Title VII"; (2) Defendants were aware of Ms. Guzall's "exercise of protected rights"; (3) Defendants subjected Ms. Guzall to "an adverse employment action" or "severe or pervasive retaliatory harassment"; and (4) "there was a causal connection between the protected activity and the adverse employment action or harassment." Morris v. Oldham Cty. Fiscal Court, 201 F.3d 784, 792 (6th Cir. 2000) (citation omitted).
With respect to the first prong, the Sixth Circuit has explained that "there are two types of protected activity: participation in a proceeding with the Equal Employment Opportunity Commission ("EEOC") and opposition to an apparent Title VII violation [i.e., discrimination based on race, color, religion, sex, or national origin]." Wasek v. Arrow Energy Servs., Inc., 682 F.3d 463, 469 (6th Cir. 2012) (citing Booker v. Brown & Williamson Tobacco Co., 879 F.2d 1304, 1313 (6th Cir. 1989)); see also 42 U.S.C. §§ 2000e-2; 2000e-3(a). Ms. Guzall does not provide evidence of activity protected under Title VII. None of her complaints related to race, color, religion, sex, or national origin. Moreover, Ms. Guzall never filed an EEOC complaint.
Defendants, therefore, are entitled to summary judgment with respect to Ms. Guzall's hostile work environment claim.
In Count V of her Amended Complaint, Ms. Guzall asserts a claim of intentional infliction of emotional distress ("IIED"). Ms. Guzall indicates in response to Defendants' motion that the claim is premised on Defendants' alleged demand that she engage in criminal acts or risk discharge.
To prove this claim, Ms. Guzall must show that Defendants intentionally or recklessly engaged in extreme and outrageous conduct that caused her severe emotional distress. Downing v. Life Time Fitness, 483 F. App'x 12, 18 (6th Cir. 2012) (citing Roberts v. Auto-Owners Ins. Co., 374 N.W.2d 905, 908 (Mich. 1985)). In Roberts, the Michigan Supreme Court described "extreme and outrageous conduct" as follows:
374 N.W.2d at 908-09. Liability does not arise from "mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities[.]" Id. at 908. Moreover, the Sixth Circuit has set a high bar as to what a plaintiff must show to satisfy the element of severe emotional distress:
Watkins v. City of Southfield, 221 F.3d 883, 893 (6th Cir. 2000) (emphasis in original) (quoting Pratt v. Brown Mach. Co., 855 F.2d 1225, 1240 (6th Cir. 1988)) (additional citations omitted).
The relationship between the parties is relevant in evaluating an IIED claim. See Wilson v. Kiss, 751 F.Supp. 1249, 1253 (E.D. Mich. 1990). "[T]he extreme and outrageous character of the conduct may arise from the position of the actor or a relationship to the distressed party." Id. (citing Ledsinger v. Burmeister, 318 N.W.2d 558, 562 (Mich. Ct. App. 1982). "Such conduct may occur through the abuse of a relationship that puts the defendant in a position of actual or apparent authority over a plaintiff or gives a defendant power to affect a plaintiff's interest." Id. (citing Margita v. Diamond Mortg. Co., 406 N.W.2d 268, 272 (Mich. Ct. App. 1987)). Thus in Wilson, the court denied the defendant's motion to dismiss the plaintiff's IIED claim alleging that "defendant utilized his authoritative position as employer to demand that plaintiff engage in criminal acts or risk discharge." Wilson, 751 F. Supp. at 1254.
Defendants seek summary judgment with respect to Ms. Guzall's IIED claim, arguing in part that she fails to prove extreme and outrageous conduct or that the alleged conduct caused her severe emotional distress.
Count VI of Ms. Guzall's Amended Complaint is titled "Fraud — Intentional and/or Constructive Fraud — Conspiracy and Concert of Actions." (Am. Compl. at 46, ECF No. 4 at Pg ID 156.) Nowhere within the allegations of this count does Ms. Guzall identify the fraud Defendants allegedly committed against her. (Id. ¶¶ 338-412.) Instead, she refers to fraud committed against the federal government — the merits of which the Court already addressed with respect to her FCA charge. In response to Defendants' summary judgment motions, Ms. Guzall asserts that this claim is premised on the same assurances about her job security as her promissory estoppel claim. (See, e.g., Pl.'s Resp. Krampitz Mot. at 39-40, ECF No. 158 at Pg ID 3370-71.)
To support a claim of fraud under Michigan law, Ms. Guzall must satisfy the following elements:
Hord v. Envtl. Research Inst. of Michigan, 617 N.W.2d 543, 546 (Mich. 2000). The plaintiff's reliance on the material misrepresentation must be reasonable. Foreman v. Foreman, 701 N.W.2d 167, 175 (Mich. Ct. App. 2005) (citations omitted). Ms. Guzall fails to establish the necessary elements of her fraud claim.
First, she fails to present evidence to demonstrate that any statement regarding her job security (i.e., that she would not be laid off and would be returned to work once she was) was false when made. Moreover, Ms. Guzall fails to explain how she acted in reliance on the representations. Finally, she fails to identify any injury she suffered because of this reliance.
As Ms. Guzall fails to show evidence of fraud, her related conspiracy claim also is subject to dismissal. This is because a civil conspiracy claim is not actionable standing alone; it is necessary to prove a separate actionable tort underlying the conspiracy. Advocacy Org. for Patients & Providers v. Auto Club Ins. Ass'n, 670 N.W.2d 569, 580 (Mich. Ct. App. 2003) (quoting Early Detection Ctr., PC v. New York Life Ins. Co., 403 N.W.2d 830 (1986)) ("`[A] claim for civil conspiracy may not exist in the air; rather, it is necessary to prove a separate, actionable tort.'").
For the reasons set forth above, the Court holds that Defendants are entitled to summary judgment with respect to the claims Ms. Guzall asserts against them.
Accordingly,
31 U.S.C. § 3729.
