Richardson v. Viewpoint, Inc.MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM AND TO STRIKEE.D. Pa.August 9, 2016IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA JERE RICHARDSON, Plaintiff, v. VIEWPOINT, INC., Defendant. CIVIL ACTION NO. 2:16-CV-02979 Judge Harvey Bartle, III [Electronically filed] DEFENDANT’S MOTION TO DISMISS AND TO STRIKE Pursuant to Federal Rule of Civil Procedure 12(b)(6), Defendant Viewpoint, Inc. moves to dismiss Plaintiff Jere Richardson’s claim for defamation (Count IV) and claim for breach of the duty of good faith and fair dealing (Count II) because they fail to state a claim. Pursuant to Federal Rule of Civil Procedure 12(f), Viewpoint moves to strike paragraphs 16-19 and 28-29 of Plaintiff’s Complaint because they contain immaterial, impertinent, and/or scandalous matter. Supporting authority is provided in the accompanying brief, and a proposed form of order is attached. Respectfully submitted, K&L GATES LLP August 9, 2016 By: s/ Amy L. Groff Amy L. Groff, PA94007 Email: Amy.Groff@klgates.com 17 North Second Street, 18th Floor Harrisburg, PA 17101-1507 Tel.: 717.231.4500 / Fax: 717.231.4501 Román D. Hernández Pro Hac Vice Application Pending Email: roman.hernandez@klgates.com 1 SW Columbia Street, Suite 1900 Portland, OR 97258 Tel.: 503.228.3200 / Fax: 503.248.9085 Counsel to Defendant Viewpoint, Inc. Case 2:16-cv-02979-HB Document 7 Filed 08/09/16 Page 1 of 2 CERTIFICATE OF SERVICE I hereby certify that on August 9, 2016, I filed a copy of the foregoing motion with the Court’s CM/ECF system, such that the following should receive service automatically: Julianne Peck (I.D. No. 79966) Peck Law Office LLC 43 Paoli Plaza #426 Paoli, PA 19301 Tel: (215) 868-6214 Email: Jpeck@jpecklaw.com Attorney for Plaintiff By: /s Amy L. Groff________________ Amy L. Groff, PA94007 Email: Amy.Groff@klgates.com K&L GATES LLP 17 North Second Street, 18th Floor Harrisburg, PA 17101-1507 Tel.: 717.231.4500 Fax: 717.231.4501 Román D. Hernández Pro Hac Vice Application Pending Email: roman.hernandez@klgates.com K&L GATES LLP 1 SW Columbia Street, Suite 1900 Portland, OR 97258 Tel.: 503.228.3200 Fax: 503.248.9085 Case 2:16-cv-02979-HB Document 7 Filed 08/09/16 Page 2 of 2 PAGE 1 PO-390091 v3 K&L GATES LLP 1 SW COLUMBIA STREET SUITE 1900 PORTLAND, OR 97258 TELEPHONE: (503) 228-3200 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA JERE RICHARDSON, Plaintiff, v. VIEWPOINT, INC., Defendant. CIVIL ACTION NO. 2:16-CV-02979 Judge Harvey Bartle, III [Electronically filed] DEFENDANT’S BRIEF IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE Viewpoint files this brief in support of its motion to dismiss and to strike pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(f). Viewpoint seeks to dismiss Plaintiff Jere Richardson’s (hereinafter “Plaintiff”) defamation claim (Count IV) and claim for breach of the duty of good faith and fair dealing (Count II) because they fail to state a claim. Viewpoint seeks to strike paragraphs 16-19 and 28-29 of Plaintiff’s Complaint because they contain immaterial, impertinent, and/or scandalous matter. I. STATEMENT OF FACTS1 Plaintiff was employed by Maxwell Systems, Inc. which was acquired by Viewpoint in February of 2014. Compl. ¶¶ 8-9. Plaintiff alleges that he had an employment agreement that entitled him to severance benefits in the event that he was terminated without “cause,” and that it carried over once he began his employment with Viewpoint. Id. ¶¶ 11-14, Ex. A. Plaintiff was terminated on November 10, 2015 for his management failures including his “poor judgment” and failing to exercise proper management oversight. Id. ¶¶ 22-24. Plaintiff has alleged that after Plaintiff and several other employees were terminated, Viewpoint’s CEO held a conference 1 Viewpoint relies on Plaintiff’s allegations set forth in his Complaint for the purposes of this motion only. By doing so, Viewpoint does not admit to the truthfulness of any of those allegations, and it expressly reserves the right to contest and/or deny Plaintiff’s allegations in the future. Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 1 of 16 PAGE 2 call wherein it was stated, “in essence, that Viewpoint would not tolerate rule breakers.” Id. ¶ 51. Plaintiff has alleged that after he was terminated Viewpoint “made additional disparaging and derogatory statements about Plaintiff, including but not limited to the statement that Plaintiff was the subject of an internal investigation involving fraud.” Id. ¶ 52. When Viewpoint terminated Plaintiff’s employment, it denied his demand for severance benefits because it concluded that Plaintiff’s management failures constituted “Cause” under his severance agreement which negated Plaintiff’s entitlement to severance benefits. Id. ¶ 26. Plaintiff disputes whether Viewpoint’s conclusions as to his management failures constitute “Cause” under his severance agreement that would prevent him from receiving severance benefits. Id. ¶ 27. Plaintiff filed this lawsuit seeking recovery for severance benefits under a breach of contract claim among other causes of action including defamation and breach of the covenant of good faith and fair dealing. II. LEGAL STANDARDS Federal Rule of Civil Procedure 12(b)(6) governs motions to dismiss for failure to state a claim upon which relief can be granted. The Supreme Court expounded upon that rule in Iqbal and Twombly, in which it made clear that federal pleading standards require a complaint to contain more than “an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Twombly standard applies to all claims brought in federal court. Iqbal, 556 U.S. at 684; see also Moss v. U.S. Secret Service, 572 F.3d 962, 970-72 (9th Cir. 2009). To survive a motion to dismiss under Rule 12(b)(6), a complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). While a court must accept plaintiff’s factual, non- conclusory allegations for the purposes of a motion under Rule 12(b)(6), “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 2 of 16 PAGE 3 A complaint “that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’ . . . Nor does a complaint suffice if it tenders ‘naked assertions’ devoid of ‘further factual enhancement.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555, 557). The touchstone of Iqbal and Twombly is plausibility -- the plaintiff is charged with stating a plausible, not merely possible, cause of action that is based on factual allegations and the reasonable inferences that may be drawn from them. Twombly, 550 U.S. at 570. It is the plaintiff’s burden to allege enough substance so as to “nudge[] their claims across the line from conceivable to plausible.” Id. When a plaintiff’s complaint fails to plead facts supporting entitlement to relief, it is appropriate to grant a dismissal under Rule 12(b)(6) at the earliest practicable stage, because the complaint’s “basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court.” Id. at 558 (internal quotations omitted). In this case, Plaintiff’s conclusory allegations are exactly the type of “unadorned,” “naked assertion[s]” that the Supreme Court has declared insufficient, and there is no plausible cause of action for defamation nor for breach of the covenant of good faith and fair dealing as alleged. These claims must be dismissed. A court may strike from a pleading any redundant, immaterial, impertinent, or scandalous matter. Fed. R. Civ. P. 12(f). “The purpose of a motion to strike is to clean up the pleadings, streamline litigation, and avoid unnecessary forays into immaterial matters.” McInerney v. Moyer Lumber and Hardware, Inc., 244 F. Supp. 2d 393, 402 (E.D. Pa. 2002). Relief under Rule 12(f) will be granted if the allegations “have no possible relation to the controversy and may cause prejudice to one of the parties, or if the allegations confuse the issues in the case.” Natale v. Winthrop Res. Corp., No. 07-4686, 2008 WL 2758238, at *14 (E.D. Pa. July 9, 2008) (internal quotation marks omitted). III. ARGUMENT As explained below, Plaintiff has failed to allege a defamation claim under Pennsylvania law. Specifically, Plaintiff has failed to allege statements that, upon review by a Court, could not Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 3 of 16 PAGE 4 be concluded to be defamatory in nature. The allegations contained within his Complaint are vague and lack particularity, and at most, are statements of opinion which are not actionable under Pennsylvania law. Plaintiff has failed to allege that he suffered special harm as required by Pennsylvania law, and instead relies upon defamation per se which is not applicable here. Additionally, Plaintiff’s claim for breach of the covenant of good faith and fair dealing must also be dismissed because Pennsylvania courts have not recognized such a claim that is independent from the breach of contract claim. Indeed, courts have already ruled that the claim is subsumed by a breach of contract claim. Finally, the Court should grant Viewpoint’s motion to strike paragraphs 16-19 and 28-29 of Plaintiff’s Complaint which contain immaterial, impertinent, and/or scandalous matter. A. Plaintiff’s Claim for Defamation Must Be Dismissed Because Plaintiff’s Factual Allegations Do Not State a Claim Under Pennsylvania Law. Plaintiff’s claim for defamation (Count IV) must be dismissed because it fails to plead multiple elements of the claim and its allegations are insufficiently particular to survive a motion to dismiss. Plaintiff has alleged that several days after his termination, Viewpoint’s CEO held a company-wide conference call in which he addressed recent departures from the company and that he stated, “…in essence, that Viewpoint would not tolerate rule breakers.” Compl. ¶ 51. Additionally, Plaintiff alleges that Viewpoint made other “disparaging and derogatory statements about Plaintiff, including but not limited to the statement that Plaintiff was the subject of an internal investigation involving fraud,” and that the statements “falsely suggest that Plaintiff engaged in wrongdoing….” Id. ¶¶ 52, 53. To plead a defamation claim under Pennsylvania law, a plaintiff must establish: (1) the defamatory character of the communication; (2) its publication by the defendant; (3) its application to the plaintiff; (4) the understanding by the recipient of its defamatory meaning; (5) the understanding by the recipient of its as intended to be applied to the plaintiff; (6) special harm resulting to the plaintiff from its publication; and (7) abuse of a conditionally privileged occasion. 42 Pa. Cons. Stat. Am. § 8343; Carter v. Susquehanna Reg’l Police Dep’t, No. 08- Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 4 of 16 PAGE 5 4764, 2009 WL 1183415, at *8 (E.D. Pa. Apr. 30, 2009). The requirements set out by 42 Pa. C.S.A § 8343 are conjunctive, and a Plaintiff must satisfy all elements or his/her claim fails as a matter of law. In this case, Plaintiff’s defamation claim fails to allege a plausible claim for defamation under Pennsylvania law because the alleged statements were not defamatory, the allegations are vague, and plaintiff has not pled special harm. 1. The Statements Were Not Defamatory. Plaintiff has not pled the first element of a defamation claim, the defamatory nature of the communication. Communications are defamatory if they tend to lower a person in the estimation of the community, deter third persons from associating with the person, or adversely affect such person’s fitness for proper conduct of that person’s lawful business or profession. Green v. Mizner, 692 A.2d 169, 172 (Pa. Super. 1997). Pennsylvania courts review the alleged defamatory statement to determine, as a matter of law, whether Plaintiff has pled a defamatory statement. Citing Superior and Supreme Court authority, a Pennsylvania Court of Common Pleas has described a defamatory statement as follows: A communication is defamatory if it tends to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him. In making the determination as to whether a statement is capable of defamatory meaning, the court must view the statement in the context and determine whether the statement was maliciously published and tended to blacken [the plaintiff's] reputation or to expose him to public hatred, contempt, or ridicule, or to injure him in his business or profession. Statements of opinion, without more, are not actionable. Communications which may annoy or embarrass a person are not sufficient as a matter of law to create an action in defamation. Fetters v. First Hosp. Corp., No. 1995-2110, 1997 WL 108444, at *4 (Centre Co. Aug. 8, 1997) (internal citations omitted). In this case, as a matter of law, the allegedly defamatory statements contained within paragraphs 51 through 54 of Plaintiff’s Complaint are not capable of a defamatory meaning. See Fanelle v. Lojack Corp., No. CIV.A. 99-4292, 2000 WL 1801270, at *4 (E.D. Pa. Dec. 7, 2000) (“The first statutory element of defamation in Pennsylvania is whether the communication is Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 5 of 16 PAGE 6 capable of defamatory meaning. This is a legal question to be resolved by the Court.”) (internal citation omitted). Here, one cannot conclude from Plaintiff’s allegations that the statements made are defamatory. For example, Plaintiff alleges that Viewpoint’s CEO stated that the company “…would not tolerate rule breakers.” Compl. ¶ 51. And, he also alleges that statements about him being the subject of an internal investigation were “disparaging” and “derogatory.” Id. ¶ 52. However, statements are not defamatory merely because they are annoying and embarrassing to the person at whom they are directed. Gordon v. Lancaster Osteopathic Hosp. Ass’n, 489 A.2d 1364, 1369 (Pa. Super. 2012) (“[O]ur court has held that communications which may annoy or embarrass a person are not sufficient as a matter of law to create an action in defamation.”); Maier v. Maretti, 671 A.2d 701, 704 (Pa. Super. 1995); Beckman v. Dunn, 419 A.2d 583, 587 (Pa. Super. 1980) (“Although the letter certainly might be sufficient to embarrass or annoy Ms. Bekman, that type of harm is not sufficient to be legally compensable.”). And, it is the function of the Court to determine whether a communication is capable of a defamatory meaning. Tucker v. Philadelphia Daily News, 848 A.2d 113, 124 (2004). Additionally, the statement that Viewpoint would not tolerate rule breakers is not defamatory because it is a statement of opinion which is not actionable as a defamatory statement as a matter of law. See Reardon v. Allegheny College, 926 A.2d 477, 484-85 (Pa. Super. 2007); Gordon, 489 A.2d at 1369-70 (upholding dismissal of defamation claim); Fetters, 1997 WL 1008444, at *5. Breslin v. Dickinson Twp., No. 1:09-cv-1396, 2010 WL 3293337, at *11 (M.D. Pa. Aug. 19, 2010). There is an exception to this rule where an opinion implies that undisclosed defamatory facts form the basis for the opinion, which does not apply in this case. Baker v. Lafayette College, 532 A.2d 399 (Pa. 1987). Certainly, identifying a person as a “rule breaker” is a statement of opinion. However, Plaintiff does not claim that this statement of opinion was based upon undisclosed defamatory facts. Instead, Plaintiff’s Complaint demonstrates that such opinion was based solely upon Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 6 of 16 PAGE 7 Plaintiff’s actions and Viewpoint’s reasonable perception of Plaintiff’s actions. Specifically, Plaintiff’s Complaint alleges that Plaintiff was faulted for exercising “poor judgment’ and other management oversights related to another employee’s misconduct. Compl. ¶ 22. Plaintiff further alleged that an outside law firm investigated the underlying conduct and made its findings to Viewpoint, that Viewpoint terminated his employment, and that Viewpoint concluded that it had “Cause” to do so. Id. ¶¶ 23-27. Thus, any statement that the Plaintiff was a rule breaker was a statement of opinion based on well-known facts, so Plaintiff’s defamation claim must be dismissed as a number of courts that have addressed similar issues have concluded. In Breslin, the court dismissed the defamation claim premised on statements made at a public meeting of township officials because the statements did not have a defamatory meaning. In dismissing the plaintiffs’ defamation claim, the court concluded that statements referring to the plaintiffs as “malcontents” “disruptive” and “abusers” did not constitute defamatory statements but were instead statements of opinion. Breslin, 2010 WL 3293337, at *11. As in Breslin, Viewpoint’s alleged vague reference to Plaintiff (among other unnamed Viewpoint personnel) as a rule breaker does not constitute a defamatory statement under Pennsylvania law. Instead, it too, like reference to the plaintiffs in Breslin as “malcontents” is a non-actionable statement of opinion.2 The Pennsylvania Court of Common Pleas reached a similar conclusion in Fetters v. First Hosp. Corp., 1997 WL 1008444. That case involved statements made during a meeting in which an employee was terminated and subsequent statements made to the state nursing board. As to the statements made by the former employer to the state nursing board, the court stated: No reasonable person would interpret the character of any of the statements made by Mr. Barszczewski or Ms. Craigo to plaintiff in her termination meeting to be 2 The statements alleged by Plaintiff in this case do not support a conclusion that they have a defamatory meaning as the Supreme Court of Pennsylvania concluded in Tucker v. Philadelphia Daily News, 848 A.2d 113 (Pa. 2004). In contrast, in Tucker, the Court concluded that statements did have a defamatory meaning: “[I]t may be defamatory to state falsely that a husband has sued to recover ten million dollars for loss of sexual relations as a result of the lyrics of two songs. Such a statement could make the Tuckers seem overly interested in money or sex, and not concerned with their life work of fighting civil rights.” Tucker, 848 A.2d at 126. Statements of opinion in which Plaintiff was referred to a as a “rule breaker” is unlike the statements in Tucker and is not actionable as a matter of law. Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 7 of 16 PAGE 8 defamatory. Statements 1-5 are all statements of opinion and therefore are not actionable. The statement that plaintiff engaged in “misconduct related to medication administration” by adjusting a dose of Ativan from prescribed 1.0 mg to 0.5 mg is the opinion of an employer evaluating the work performance of an employee. A statement that a plaintiff engaged in “misconduct” that is made during an evaluation by an employer of the plaintiff's job performance necessarily includes the employer's opinion about that job performance. Fetters, 1997 WL 1008444, at *5. The statement that plaintiff in Fetters engaged in “misconduct related to medication administration” is similar to the alleged statement here that Plaintiff was a rule breaker. Even if, as Plaintiff alleges, Viewpoint did refer to Plaintiff as a rule breaker, that would be akin to stating that the Plaintiff was terminated for “cause” which Pennsylvania courts have concluded is not actionable. As the Court stated in Pilkington v. CGU Ins. Co., Inc., No. 00-2495, 2000 WL 33159253 (E.D. Pa. Feb. 9, 2001): A statement that someone has been terminated from employment or terminated for cause, without more, is not defamatory. As the plethora of labor-management and unemployment compensation cases illustrate, in the employment context the term “for cause” encompasses an array of matters which would not subject one to public contempt or repel others, e.g., excessive absence, sloppy paperwork, disregard of safety rules, damage to or loss of company computer for personal purposes, unauthorized use of a company vehicle, fighting with a co-worker. Many persons have been terminated “for cause” without losing esteem in their community or the association of others. Pilkington, 2000 WL 33159253, at *5 (internal citations and quotations omitted). Therefore, even accepting as true Plaintiff’s allegations, his Complaint does not allege statements that rise to the level of being defamatory. 2. The Statements Are Vague and Lack Particularity and Fail to Meet Plaintiff’s Burden. Plaintiff’s defamation claim must be dismissed for an additional reason: the allegations asserted in Plaintiff’s Complaint are vague and lack the particularity required under Pennsylvania law. The allegations in paragraph 52 of the Complaint fail even the liberal federal pleading standard required by FRCP 8. The allegations merely state: “[u]pon information and belief, after Viewpoint terminated Plaintiffs employment, its executives ad representatives made additional Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 8 of 16 PAGE 9 disparaging and derogatory statements about Plaintiff, including but not limited to the statement that Plaintiff was the subject of an internal investigation involving fraud.” Compl. ¶ 52. This is insufficient as this Court has illustrated. See Carter, 2009 WL 1183415, at *8. In Carter, the Court dismissed a defamation claim where the plaintiff had “not set forth the substance of the allegedly defamatory comments, nor has she specified the putative recipient(s) or when the comments were made” finding that “[n]o defendant could defend against such allegations in any meaningful way.” Id. In this case, Plaintiff does not identify in paragraph 52 to whom the alleged statements were made, and it is unclear to whom “executives and representatives” refers. This lack of specificity is fatal to his defamation claim. When a party fails to specify the content of the statements and the identity of the persons receiving the alleged defamatory communications, a defamation claim fails as a matter of law. Gordon, 489 A.2d 1370 n. 6 (“Appellant’s allegations as to defamatory oral communications fail for want of specificity as to the content of the statements and as to the identity of the persons receiving the alleged communications.”) (citations omitted); see also Pilkington, 2000 WL 33159253, at *5 (“To state a claim, a plaintiff must identify specific individuals to whom a defamatory statement was published. . . .Plaintiff’s allegation that defendant published the statement to unspecified third parties does not satisfy the requirements under Pennsylvania law.”) (internal citations omitted). As these cases show, the vagueness of the Plaintiff’s allegations warrant dismissal of the defamation claim. 3. Plaintiff’s Defamation Claim Must Be Dismissed Because He Has Failed to Allege That He Suffered the Special Harm Required in Defamation Claims. Only if the Court concludes that Viewpoint’s alleged statements are capable of defamatory meaning and are sufficiently pled, does it need to consider whether Plaintiff has properly alleged that he suffered special harm. Synygy, Inc. v. Scott-Levin, Inc., 51 F. Supp. 2d 570, 580 (E.D. Pa. 1999) (“Once a court determines that the statement is capable of defamatory meaning, one of the requirements under the Pennsylvania statute is that the plaintiff prove that it suffered special harm.”). In this case, Plaintiff’s defamation claim also fails because he did not Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 9 of 16 PAGE 10 allege that he suffered any special harm from the publication of the alleged defamatory statements. Special harm is shown by proof of specific monetary or out-of-pocket losses caused by the defamation. Id. (“Special harm requires proof of a specific monetary or out-of-pocket loss as a result of the defamation.”). Plaintiff’s Complaint is devoid of any allegation that he sustained monetary losses, and instead seeks to rely on a claim of defamation per se. Compl. ¶¶ 55-57. Whether the words allegedly used by Viewpoint were defamatory per se is a question of law for the Court. Synygy, 51 F. Supp. 2d at 580. While a plaintiff may avoid the need to prove special harm where the communication constitutes slander per se, the alleged defamatory statement in this case sub judice does not rise to this level. Typically, communications that constitute slander per se are generally limited to “words that impute a criminal offense, a loathsome disease, business misconduct, or serious sexual misconduct.” Restat. (2d) Torts, § 570; see also Synygy, 51 F. Supp. 2d at 580. Because the term “rule breaker” does not fall within such category, Plaintiff’s defamation claim must be dismissed as a matter of law. Plaintiff will likely argue that the general statement Viewpoint would not tolerate rule breakers is one which imputes business misconduct, but Pennsylvania courts, relying on the Restatement of Torts (2d), have required more than that to support a defamation claim. For example, in Synygy, the Court stated: A statement is defamatory per se as accusation of business misconduct if it “‘ascribes to another conduct, characteristics or a condition that would adversely affect his fitness for the proper conduct of his lawful business.’” The statement must be more than general disparagement. It must be of the type that would be particularly harmful to an individual engaged in the plaintiff’s business or profession. A statement which is simply an expression of a negative opinion is not defamatory. Id. (citations omitted). Referring to Plaintiff as a rule breaker is not conduct that would adversely affect Plaintiff’s general fitness for employment. See Maier, 671 A.2d at 705-06 (upholding dismissal of a former employee’s defamation claim where employee had been referred to as “vulgar” “crude” and “insubordinate” which “did not concern her abilities to Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 10 of 16 PAGE 11 perform her job and did not harm her trade or ability to become employed elsewhere”). Instead, the allegedly defamatory statements are not actionable as defamation per se. Thus, Plaintiff’s failure to allege that he suffered special harm is fatal to his defamation claim. B. Pennsylvania Law Does Not Recognize the Breach of the Covenant and Good Faith and Fair Dealing As an Independent Cause of Action. In Count II, Plaintiff has asserted a separate cause of action for breach of the covenant of good faith and fair dealing based on allegations that Viewpoint mischaracterized his termination as being for “cause” under the his employment agreement. Compl. ¶ 41. These allegations are related to another cause of action he asserts for breach of contract. Under Pennsylvania law a breach of contract claim subsumes a cause of action for breach of the covenant of good faith and fair dealing. Accordingly, Plaintiff’s claim for breach of the covenant of good faith and fair dealing fails as a matter of law because Pennsylvania law does not recognize an independent cause of action for breach of an implied covenant of good faith and fair dealing. LSI Title Agency, Inc. v. Evaluation Servs., 951 A.2d 384, 391-92 (Pa. Super. 2008) (citing cases explaining that a cause of action for breach of an implied duty of good faith and fair dealing is subsumed in a breach of contract action); see also McHale v. NuEnergy Group, No. 01-4111, 2002 WL 321797, at *8 (E.D. Pa. Feb. 27, 2002) (“This court finds that Pennsylvania law would not recognize a claim for breach of covenant of good faith and fair dealing as an independent cause of action separate from the breach of contract claim since the actions forming the basis of the breach of contract claim are essentially the same as the actions forming the basis of the bad faith claim.”). In Law v. Luzerne Intermediate Unit 18, plaintiff alleged breach of the duty of good faith and fair dealing based on purported retaliation for reporting sexual harassment as well as a breach of contract claim. The Court granted the motion to dismiss, holding that “[i]n the context of employment contracts, Pennsylvania law does not recognize a claim for breach of good faith and fair dealing as an independent cause of action which is separate from a breach of contract action. No. 3:05-cv-2171, 2006 WL 1455730, at *2 (M.D. Pa. May 25, 2006); see also String v. Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 11 of 16 PAGE 12 Chandler Hall Health Servs. Inc., No. CIV.A. 99-6218, 2000 WL 298672, at *3-4 (Mar. 20, 2000) (“[w]hile there may be an express or implied covenant of good faith and fair dealing in an employment contract, a breach of such covenant is a breach of contract action, not an independent action for a breach of a duty of good faith and fair dealing.”) (citation omitted). The Court dismissed the breach of duty of good faith and fair dealing claim as subsumed by the breach of contract claim. Plaintiff here alleges a breach of contract cause of action under his employment agreement based on nonpayment of severance payments. Compl. ¶¶ 36-37. The breach of good faith and fair dealing claim asserts that “Viewpoint had an implied duty to perform its contractual obligations to Plaintiff in good faith and fair dealing” under the employment agreement. Id. ¶ 40. As in Law v. Luzerne, the breach of duty of good faith and fair dealing claim cannot be maintained as a standalone cause of action because “[i]n the context of employment contracts, Pennsylvania law does not recognize a claim for breach of good faith and fair dealing as an independent cause of action which is separate from a breach of contract action.” Law, 2006 WL 1455730, at *2.3 Moreover, in Chanel, Inc. v. Jupiter Group, Inc., the United States District Court for the Middle District of Pennsylvania, that plaintiff brought independent claims for breach of contract and breach of the duty of good faith and fair dealing. 2006 WL 1793223, at *1, *6 (M.D. Pa. June 27, 2006). In response to a motion to dismiss for failure to state a claim, that Plaintiff argued that the breach of the duty of good faith and fair dealing claim could be pled independently because the breach of duty of good faith and fair dealing purportedly relied on a different breach than the breach of contract claim. Id. at *6. The Court rejected that argument and granted the motion to dismiss, finding that both counts were “premised on [an individual’s] breach of his duties as a manager … resulting in the same damages.” Id. at *6-7. Similarly, here 3 There is a narrow exception allowing for an independent claim for a breach of duty of good faith and fair dealing claims in the context of franchisor/franchisee and insurer/insured relationships. Those exceptions plainly do not apply to this case. Channel, Inc. v. Jupiter Group, Inc., 2006 WL 1793223, at *6 (M.D. Pa. June 27, 2006) (duty of good faith and fair dealing claims only recognized in limited circumstances like a franchisor/franchisee and insurer/insured relationship). Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 12 of 16 PAGE 13 Plaintiff alleges breach of Viewpoint’s duties for both counts and the same alleged damages. Plaintiff’s claims under each count state that Viewpoint breached by terminating Plaintiff for cause and not paying severance agreements. Compl. ¶¶ 33-37, 40-41. The damages allegations are identical. Compare id. ¶ 38 (“As a direct and proximate result of Defendant’s breach of contract, Plaintiff has sustained damages and losses set forth herein in excess of $112,500 in lost severance payments and accrued interest.”) with id. ¶ 42 (same). Because Plaintiff cannot sustain an independent count for breach of the duty of good faith and fair dealing, it must be dismissed. C. The Court Should Strike Paragraphs 16 through 19 and Paragraphs 28 and 29 of Plaintiff’s Complaint Because They Are Immaterial, Impertinent, or Scandalous and Have No Bearing Upon Plaintiff’s Claims for Relief. Federal Rule of Civil Procedure 12(f) provides, in relevant part, that “[t]he Court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. The court may act (1) on its own; or (2) on motion made by a party either before responding to the pleading or, if a response is not allowed, within 21 days after being served with the pleading.” Courts will strike “only allegations that are so unrelated to the plaintiffs' claims as to be unworthy of any consideration….” Johnson v. Anhorn, 334 F. Supp. 2d 802, 809 (E.D. Pa. 2004) (quoting Becker v. Chicago Title Ins. Co., 2004 WL 228672, at *6 (E.D. Pa. Feb. 4, 2004)). “The purpose of a motion to strike is to clean up the pleadings, streamline litigation, and avoid unnecessary forays into immaterial matters.” Natale, 2008 WL 2758238, at *14 (citation omitted). Relief under Rule 12(f) will be granted if the allegations “have no possible relation to the controversy and may cause prejudice to one of the parties, or if the allegations confuse the issues in the case.” Id. (internal quotation marks omitted). In this case, Plaintiff has included immaterial, impertinent and scandalous matter in paragraphs 16 through 19, and in paragraphs 28 and 29. See Compl. ¶¶ 16-19, 28-29. These factual allegations have no bearing whatsoever upon Plaintiff’s legal claims. These impertinent facts include: Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 13 of 16 PAGE 14 Allegations that Viewpoint was purchased by a private equity company, Bain Capital, and the amount of the purchase. Id. ¶ 16. Allegations that Viewpoint was directed to generate significant profits, including to reduce its workforce 15-25% and to shut down 11 offices so that only three remained. Id. ¶ 17. Allegations that the company’s founder was replaced as CEO by Mr. Kotzabasakis, a former executive with AspenTech in Boston. Id. ¶ 18. Allegations that Mr. Kotzabasakis was entitled to a seven-figure bonus if he achieved profit projections, and that he would do whatever it took to achieve his bonus. Id. ¶ 19. Allegations that there was a turnover of Viewpoint’s senior management after Mr. Kotzabasakis were hired; Plaintiff included a list of the company positions that had turnover. Id. ¶ 28. Allegations that the senior management departures were involuntary and a direct result of Viewpoint’s cost-saving measures to boost company profits. Id. ¶ 29. None of the above allegations have any bearing on the claims in this case and should be stricken as immaterial, impertinent, and scandalous. See Mitchell v. Community Educ. Ctrs., Inc., No. 14-5062, 2015 WL 4770652, at *11 (E.D. Pa. Aug. 11, 2015) (granting motion to strike paragraphs of complaint irrelevant to the claims asserted); Correctional Med. Care, Inc. v. Gray, No. 07-7840, 2008 WL 248977, at *18 (E.D. Pa. Jan. 30, 2008) (granting motion to strike paragraphs of complaint relating to a defendant’s professional career that were not material or pertinent to plaintiff’s claims). Content is immaterial where it “has no essential or important relationship to the claim for relief.” Steinagel v. Valley Oral Surgery, No. 12-5645, 2013 WL 5429269, at *11 (E.D. Pa. Sept. 30, 2013) (citation and quotation omitted). “Content is impertinent when it does not pertain to the issues raised in the complaint.” Id. (citation omitted). “Scandalous material improperly casts a derogatory light on someone, most typically on a party to the action.” Id. (citation and quotation omitted). Allegations that Viewpoint was purchased Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 14 of 16 PAGE 15 by a private equity company and that the CEO was replaced have no relationship to the claim for relief or the issues raised in the complaint. Compl. ¶¶ 16, 18. Similarly, the allegations regarding closing offices, the size of Mr. Kotzabasakis’ bonus, turnover of Viewpoint’s senior management, and the alleged causes of the departures of senior management have no bearing on contract, wage, and defamation claims asserted in the Complaint. Id. ¶¶ 17, 19, 28-29. Thus, they should be stricken as immaterial, impertinent, and scandalous. IV. CONCLUSION For the foregoing reasons, Defendant respectfully requests that the Court grant its motion and dismiss Counts II and IV of the Complaint and to strike paragraphs 16-19 and 28-29 of the Complaint. Dated this 9th day of August, 2016. Respectfully Submitted, K&L GATES LLP By: s/ Amy L. Groff Amy L. Groff, PA 94007 Email: Amy.Groff@klgates.com K&L GATES LLP 17 North Second Street, 18th Floor Harrisburg, PA 17101-1507 Tel.: 717.231.4500 Fax: 717.231.4501 Román D. Hernández Pro Hac Vice Application Pending Email: roman.hernandez@klgates.com K&L GATES LLP 1 SW Columbia Street, Suite 1900 Portland, OR 97258 Tel.: 503.228.3200 Fax: 503.248.9085 Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 15 of 16 PAGE 16 - CERTIFICATE OF SERVICE K&L GATES LLP 1 SW COLUMBIA STREET SUITE 1900 PORTLAND, OR 97258 TELEPHONE: (503) 228-3200 CERTIFICATE OF SERVICE I hereby certify that on August 9, 2016, I filed a copy of the foregoing brief with the Court’s CM/ECF system, such that the following should receive service automatically: Julianne Peck (I.D. No. 79966) Peck Law Office LLC 43 Paoli Plaza #426 Paoli, PA 19301 Tel: (215) 868-6214 Email: Jpeck@jpecklaw.com Attorney for Plaintiff By: s/ Amy L. Groff ________________ Amy L. Groff, PA 94007 Email: Amy.Groff@klgates.com K&L GATES LLP 17 North Second Street, 18th Floor Harrisburg, PA 17101-1507 Tel.: 717.231.4500 Fax: 717.231.4501 Román D. Hernández Pro Hac Vice Application Pending Email: roman.hernandez@klgates.com K&L GATES LLP 1 SW Columbia Street, Suite 1900 Portland, OR 97258 Tel.: 503.228.3200 Fax: 503.248.9085 Case 2:16-cv-02979-HB Document 7-1 Filed 08/09/16 Page 16 of 16 PO-391220 v1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA JERE RICHARDSON, Plaintiff, v. VIEWPOINT, INC., Defendant. CIVIL ACTION NO. 2:16-CV-02979 ORDER AND NOW this _____ day of ______________, 2016, upon consideration of Defendant’s Motion to Dismiss and to Strike, and Plaintiff’s response thereto, it is hereby ordered that the motion is GRANTED. Counts II and IV of Plaintiff’s Compliant are dismissed for failure to state a claim, and paragraphs 16-19 and 28-29 of Plaintiff’s Complaint are stricken. __________________________________ Bartle, J. Case 2:16-cv-02979-HB Document 7-2 Filed 08/09/16 Page 1 of 1
