Campbell v. PMI Food Equip ( 2007 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 07a0484p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Plaintiffs-Appellants, -
DOUGLAS CAMPBELL et al.,
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No. 05-4483
v.
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PMI FOOD EQUIPMENT GROUP, INC. et al., -
Defendants-Appellees. -
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Appeal from the United States District Court
for the Southern District of Ohio at Dayton.
No. 95-00222—Walter H. Rice, District Judge.
Argued: October 31, 2007
Decided and Filed: December 14, 2007
Before: DAUGHTREY and GILMAN, Circuit Judges; EDMUNDS, District Judge.*
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COUNSEL
ARGUED: Dwight D. Brannon, BRANNON & ASSOCIATES, Dayton, Ohio, for Appellants.
Teresa D. Jones, THOMPSON HINE, Dayton, Ohio, Brandi L. Dorgan, ISAAC, BRANT,
LEDMAN & TEETOR, Columbus, Ohio, for Appellees. ON BRIEF: Dwight D. Brannon,
Matthew C. Schultz, BRANNON & ASSOCIATES, Dayton, Ohio, for Appellants. Brandi L.
Dorgan, Steven G. LaForge, ISAAC, BRANT, LEDMAN & TEETOR, Columbus, Ohio, Teresa D.
Jones, THOMPSON HINE, Dayton, Ohio, Stacy M. Wall, CITY OF PIQUA LAW DIRECTOR,
Piqua, Ohio, William J. Cole, OFFICE OF THE ATTORNEY GENERAL OF OHIO, Columbus,
Ohio, for Appellees.
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OPINION
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RONALD LEE GILMAN, Circuit Judge. PMI Food Equipment Group, Inc. closed its plant
in Dayton, Ohio in 1995 and moved the operation to Piqua, Ohio after signing a tax-abatement
agreement with the City of Piqua, Miami County, and the state of Ohio that resulted in favorable tax
treatment for 10 years. In the process of closing its Dayton plant, PMI terminated all of the 66
hourly employees who worked there. The hourly workers and their spouses (collectively referred
to as the “Workers”) sued PMI, Piqua, Miami County, the state of Ohio, and various other parties,
*
The Honorable Nancy G. Edmunds, United States District Judge for the Eastern District of Michigan, sitting
by designation.
1
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asserting 33 causes of action arising under various state and federal laws in connection with the tax
abatement, the closing of the Dayton plant, and PMI’s termination of its hourly workers. All but two
of the Workers’ claims were dismissed by the district court, and the remaining two claims were
resolved by the parties. The Workers timely filed this appeal. For the reasons set forth below, we
AFFIRM the judgment of the district court.
I. BACKGROUND
A. Factual background
PMI operated a food-equipment parts and repair facility in Dayton (the Dayton Plant). In
1994, PMI decided to close the Dayton Plant due to the facility’s age and inefficient operation. PMI
applied to the City of Piqua in December of the same year for a tax-abatement agreement (the
Agreement) in the Miami County enterprise zone. The Miami County Board of Commissioners
(Miami County) had created the enterprise zone in Piqua to attract new business operations.
Donald E. Jakeway, who was the Director of the Ohio Department of Development (ODD), was
responsible for administering tax-abatement programs, including the one at issue.
The terms of the Agreement called for PMI to open a plant in Piqua (the Piqua Plant) in
exchange for various tax breaks, including a 50% tax abatement until 2004 on all personal property
used for business purposes in the Piqua Plant and a 50% tax abatement on any new real property
added to the plant until 2005. During the negotiations over the Agreement, the Workers allege that
PMI informed Piqua and Miami County officials that it was considering moving its plant to
Kentucky, where the company had other operations, in the event that PMI did not receive the tax
abatements from Piqua. They also claim that PMI in fact had no plans at the time to move to
Kentucky. The Agreement was approved by the Piqua City Commission, Miami County, the state
of Ohio, and Jakeway on January 26, 1995.
At the time that PMI closed the Dayton Plant, the company employed 98 people at that
location, consisting of 32 salaried employees and 66 hourly employees. The hourly employees were
covered by a collective bargaining agreement (CBA) between PMI and the International Union of
Electronic, Electrical, Salaried, Machine, and Furniture Workers, AFL-CIO (the Union). According
to the Workers’ Third Amended Complaint (the Amended Complaint), the CBA was scheduled to
expire in June of 1996. The CBA contained no provision requiring PMI to keep the Dayton Plant
open. PMI planned to employ a staff of 77 at the Piqua Plant to fill 32 salaried and 45 hourly
positions.
PMI informed the Dayton Plant’s hourly employees in December of 1994 of the planned
closure and their pending termination. The Workers allege that PMI initially told them that they
would be laid off a few at a time, “first by handicap, then by seniority.” On July 18, 1995, PMI
informed them that they were all to be terminated the following Friday, July 26. Three days later,
on July 21, PMI closed the Dayton Plant and all of the hourly employees were terminated.
All of the salaried employees from the Dayton Plant were retained to work at the Piqua Plant,
but none of the hourly employees were allowed to keep their jobs. PMI filled the 45 hourly
positions with individuals who were employed by a temporary employment agency. The Workers
allege that, of the 66 hourly employees who were terminated, 51 were age 40 or over and that the
average age of the hourly employees was 52. They also allege that the average age of the temporary
Workers hired to replace them was 34.
B. Procedural history
In May of 1995, the Workers filed their initial complaint in the Montgomery County Court
of Common Pleas in Dayton. PMI, Piqua, Miami County, the state of Ohio, Jakeway, the City of
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Dayton, Dayton City Schools, and ODD were named as defendants. All of the defendants, except
the Dayton City Schools and ODD, are appellees in this appeal. The case was removed to federal
court in June of 1995. In October of the same year, the Workers filed their Amended Complaint,
which set forth 33 causes of action. Shortly thereafter, the defendants filed motions to dismiss.
The district court issued an order in September of 1996 that granted in part and denied in part
the defendants’ motions to dismiss, and stated that its supporting opinion would be forthcoming.
Nine years later, in February of 2005, the district court finally issued its opinion. It granted the
motions to dismiss in their entirety as to the state of Ohio, Jakeway, and Miami County, and also
granted the motions to dismiss with respect to all but two of the Workers’ claims against the
remaining defendants. (Both of the other claims were later resolved by the parties.) The Workers
timely appealed the district court’s judgment, limiting the issues on appeal to 8 of the 33 alleged
causes of action.
II. ANALYSIS
A. Standard of review
We review de novo a district court’s dismissal of a complaint for failure to state a claim
under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Marks v. Newcourt Credit Group, Inc.,
342 F.3d 444, 451 (6th Cir. 2003). In reviewing a Rule 12(b)(6) motion to dismiss, “[f]actual
allegations must be enough to raise a right of relief above the speculative level, . . . on the
assumption that all the allegations are true (even if doubtful in fact).” NicSand, Inc. v. 3M Co., 2007
WL 3010426 at *14 (6th Cir. Oct. 17, 2007) (quoting Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955,
1965 (2007)). We need not, however, accept as true legal conclusions or unwarranted factual
inferences. Gregory v. Shelby County, 220 F.3d 433, 446 (6th Cir. 2000).
B. Constitutional claims
In their Amended Complaint, the Workers requested that the district court declare the
Agreement “null and void” because it allegedly violated their due process and equal protection rights
under both the U.S. Constitution and the Ohio Constitution. The court declined to consider the
Workers’ request, however, concluding that the issue was moot because the Agreement had already
expired. On appeal, the Workers argue that the district court erred in dismissing their constitutional
claims for mootness, and they also assert for the first time that the Agreement violated the
Commerce Clause of the U.S. Constitution. But the Workers’ belated Commerce Clause argument,
just like their other constitutional claims that were timely raised, is subject to the mootness doctrine.
We have “no authority to render a decision upon moot questions or to declare rules of law
that cannot affect the matter at issue.” Cleveland Branch, NAACP v. City of Parma, 263 F.3d 513,
530 (6th Cir. 2001). A case is moot when “the issues presented are no longer ‘live’ or parties lack
a legally cognizable interest in the outcome.” Id. (quoting County of Los Angeles v. Davis,
440 U.S. 625, 631 (1979)). That is, “a case becomes moot only when subsequent events make it
absolutely clear that the allegedly wrongful behavior cannot reasonably be expected to recur and
interim relief or events have completely and irrevocably eradicated the effects of the alleged
violation.” Id. (quotation marks omitted). An otherwise moot claim will not be dismissed, however,
where it is “capable of repetition, yet evading review,” such that “(1) the challenged action was in
its duration too short to be fully litigated prior to its cessation or expiration, and (2) there was a
reasonable expectation that the same complaining party would be subject to the same action again.”
Murphy v. Hunt, 455 U.S. 478, 482 (1982).
In considering the potential mootness of a claim for declaratory relief, this court has
explained that “the question is whether the facts alleged, under all the circumstances, show that there
is a substantial controversy . . . of sufficient immediacy and reality to warrant the issuance of a
No. 05-4483 Campbell et al. v. PMI Food Equipment Group et al. Page 4
declaratory judgment.” Coal. for Gov’t Procurement v. Fed. Prison Indus., 365 F.3d 435, 459 (6th
Cir. 2004) (quoting Super Tire Eng’g Co. v. McCorkle, 416 U.S. 115, 122 (1974) (quotation
marks omitted)).
The Workers argue that the district court’s decision is “fundamentally unjust” because the
issue would not have been moot if the district court had rendered its decision in a timely manner.
Although they justifiably lament the district court’s inordinate and inexplicable nine-year delay in
deciding the defendants’ motions to dismiss, they do not dispute that the Agreement expired in 2004.
This fact is fatal to their claim because the Agreement is no longer in effect and no party has any
continuing obligations under it. Granting declaratory relief would therefore have no effect on the
Workers’ current legal interests. Furthermore, the Workers have not alleged any facts to show that
they might be subject to a similar tax-abatement agreement between the same parties in the future.
The issue of whether the Agreement is unconstitutional is, accordingly, no longer a “live”
controversy, and there is no reasonable expectation that the Agreement will be revived to harm the
Workers’ legal interests. See McPherson v. Mich. High Sch. Athletic Ass’n, 119 F.3d 453, 458
(6th Cir. 1997) (holding that a request for a preliminary injunction ordering the plaintiff to be
allowed to compete in the 1995 high-school basketball season was moot in 1997 because the
plaintiff had already graduated, the season was over, and there were no more games to be played);
Ford v. Wilder, 469 F.3d 500, 504 (6th Cir. 2006) (holding that, because a resolution was no longer
before the state senate and election results had already been voided under the resolution, declaratory
relief would “have no effect on the parties’ current legal interests”). The Workers’ constitutional
claims are therefore moot and the district court properly declined to grant a declaratory judgment.
To be sure, we look unfavorably upon lengthy, unjustified, and inexplicable delays on the
part of district courts in deciding cases. See, e.g., Ball v. Wagers, 795 F.2d 579, 581 (6th Cir. 1986)
(criticizing a delay of five years and nine months). The law does not, however, recognize an
exception to the mootness doctrine on the basis of inordinate delay. See Big Rivers Elec. Corp. v.
EPA, 523 F.2d 16, 19 (6th Cir. 1975) (discussing the two exceptions to mootness). If the Workers
were concerned about the inexplicable delay, they had the option to bring a mandamus action against
the district court judge. See Roche v. Evaporated Milk Ass’n, 319 U.S. 21, 26 (1943) (“The
traditional use of the writ [of mandamus] in aid of appellate jurisdiction . . . has been to confine an
inferior court to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its
authority when it is its duty to do so.”). The Workers’ failure to exercise this right diminishes the
force of their mootness argument.
C. Fraud claims
In their capacity as taxpayers, the Workers next assert two claims of fraud against PMI,
Piqua, Miami County, the state of Ohio, and Jakeway. Their first claim was brought on behalf of
the Workers themselves, in their capacity as state and county taxpayers. This claim alleges that the
Workers, as taxpayers, suffered damages as a result of PMI’s alleged fraudulent misrepresentations
to the city, county, and state during the tax-abatement negotiations. The second claim was brought
in the form of a taxpayers’ suit pursuant to Ohio’s “taxpayer suit” statute, Ohio Rev. Code
§§ 733.56, 733.59. This claim alleges that the Agreement “involved tax revenues that were intended
for specific purposes, but were otherwise directed for private use by PMI.”
The district court dismissed both claims on the ground that the Workers failed to satisfy the
requirements for standing under Ohio’s taxpayer-suit statute. But whether the Workers have
standing to sue in federal court in their capacity as taxpayers “is . . . a federal question which does
not depend on the party’s prior standing in state court.” Coyne ex rel. Ohio v. Am. Tobacco Co., 183
F.3d 488, 495 (6th Cir. 1999) (quoting Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 804 (1985)).
No. 05-4483 Campbell et al. v. PMI Food Equipment Group et al. Page 5
In other words, “standing is a matter of federal law, not state law.” Coyne, 183 F.3d at 495 (ellipsis
and quotation marks omitted). The district court’s reliance on Ohio law in dismissing the Workers’
taxpayer claims for lack of standing is therefore misplaced. See id. It should have begun its inquiry
into the Workers’ standing with an analysis under Article III of the U.S. Constitution.
This court has set forth the three requirements for establishing Article III standing as follows:
[A] plaintiff must have suffered some actual or threatened injury due to the alleged
illegal conduct of the defendant; the injury must be “fairly traceable” to the
challenged action; and there must be a substantial likelihood that the relief requested
will redress or prevent the plaintiff’s injury. Hence, the “irreducible minimum”
constitutional requirements for standing are proof of injury in fact, causation, and
redressability. A plaintiff bears the burden of demonstrating standing and must
plead its components with specificity.
Id. at 494 (citations omitted).
We need not engage in a lengthy analysis of either injury or causation because the Workers’
fraud claims fail under the third requirement of redressability. They assert that the state and county
“misdirected” and “misappropriated” tax revenues to fund the Agreement, and that they suffered
damages as a result.
In Coyne, this court held that a group of Ohio taxpayers who, like the Workers, had
challenged the expenditure of state funds, lacked standing because they could not show that a
favorable outcome would result in either the receipt of a tax refund by them or a reduction in the tax
bill for Ohio taxpayers generally. See Coyne, 183 F.3d at 496. The court explained that
“[r]eimbursement of the public treasury would not necessarily redress Plaintiffs’ claimed ‘tax
burden’ injury because . . . the power to decrease state taxes or issue a tax refund rests within the
province of the legislative and executive branches of the State of Ohio.” Id.
Like the plaintiffs in Coyne, the Workers fail to allege that a victory in this suit would result
in an increase in the public treasury to replace the amount of money “misappropriated” under the
Agreement. Nor does their complaint raise a possibility that a favorable outcome would result in
either the receipt of a tax refund by the Workers or a reduction in the tax burden for Ohio or Miami
County taxpayers generally. Indeed, even if the Workers were to win and obtain money from PMI
to replenish the public coffers, decisions about how to utilize a recovery of such funds would belong
to the state of Ohio and to Miami County. See id. For these reasons, the Workers lack standing to
bring their fraud claims in federal court.
D. Section 1983 claims
The Workers next allege that PMI deprived them of certain constitutional rights, in violation
of 42 U.S.C. § 1983, when the company terminated them and moved the plant to Piqua. Their
argument is difficult to understand, but appears to be that PMI’s actions in terminating the hourly
employees and moving operations to Piqua were “under the color of state law” because the actions
were taken in connection with the Agreement, which was authorized and approved by state law and
entered into by various government entities. The district court found that the Workers failed to state
a cause of action because they did not allege that “Ohio law compelled PMI to terminate them.”
To state a claim under § 1983, plaintiffs “must demonstrate that the defendant deprived them
of their ‘rights, privileges, or immunities secured by the Constitution’ under color of state law.’”
Lindsey v. Detroit Entm’t, LLC, 484 F.3d 824, 827 (6th Cir. 2007) (quoting § 1983). As a general
rule, “[s]ection 1983 does not . . . prohibit the conduct of private parties acting in their individual
capacities.” Id. The “ultimate issue” in determining whether a private party is subject to suit under
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§ 1983 is whether “the alleged infringement of federal rights [is] fairly attributable to the State.”
Rendell-Baker v. Kohn, 457 U.S. 830, 838 (1982) (quotation marks omitted). This court applies the
three tests articulated by the Supreme Court for determining the existence of state action under
§ 1983: “(1) the public function test, (2) the state compulsion test, and (3) the symbiotic relationship
or nexus test.” Chapman v. Higbee Co., 319 F.3d 825, 833 (6th Cir. 2003). Only the second and
third tests are relevant to this case.
The state compulsion test requires that “a state exercise such coercive power or provide such
significant encouragement, either overt or covert, that in law the choice of the private actor is
deemed to be that of the state.” Wolotsky v. Huhn, 960 F.2d 1331, 1335 (6th Cir. 1992) (citing
Blum v. Yaretsky, 457 U.S. 991, 1004 (1982) (finding no state action even though the state provided
a significant portion of the funding of a private corporation, because the state did not appoint board
members, select personnel, or make decisions for the organization)). “More than mere approval or
acquiescence in the initiatives of the private party is necessary to hold the state responsible for those
initiatives.” Id. at 1335.
There is nothing in the record to show that any of the state entities “exercised such coercive
power or provided such encouragement as to make [PMI’s] decision state action.” Id. PMI, a
private company, made a business decision to voluntarily enter into a contract with government
entities, to close its Dayton Plant, and to terminate the Workers. No state law or any state entity
required PMI to take any of those actions. Indeed, the Agreement required only that PMI open a
facility in Piqua. It did not require PMI to close facilities elsewhere or lay off existing employees.
The Workers’ § 1983 claims also fail under the symbiotic relationship test, which requires
a plaintiff to “demonstrate that there is a sufficiently close nexus between the government and the
private party’s conduct so that the conduct may be fairly attributed to the state itself.” Chapman,
319 F.3d at 834 (6th Cir. 2003); see also Brentwood Acad. v. Tenn. Secondary Sch. Athletic Ass’n,
531 U.S. 288, 296 (2001) (stating that a challenged activity may be state action “when it is entwined
with governmental policies or when government is entwined in [its] management or control”)
(quotation marks omitted). According to the record, the government entities here did nothing more
than authorize and approve a contract that provided tax benefits conditioned on PMI opening a plant
in Piqua.
The factual allegations do not suggest that the government showed any interest in the internal
business matters of PMI or that, aside from offering tax incentives, it influenced PMI’s business
decisions. See Rendell-Baker, 457 U.S. at 841 (finding no state action where various government
regulators “showed relatively little interest in the school’s personnel matters”). PMI’s challenged
actions, moreover, occurred without any involvement whatsoever by any government entity or
regulation. See id. (holding that there was no state action where “the decisions to discharge the
petitioners were not compelled or even influenced by any state regulation”). Nor does the Workers’
Amended Complaint allege a nexus between the government and PMI’s challenged conduct. For
the foregoing reasons, the district court properly dismissed the Workers’ § 1983 claims.
E. Age-discrimination claims
In their Amended Complaint, the Workers asserted a violation of federal and Ohio age-
discrimination laws on the ground that they “were replaced by workers in Piqua who were
significantly younger.” The district court held that the Workers failed to state a claim because,
“although they allege that they were replaced, [they] do not allege facts necessary to support the
factual allegation that they were replaced with younger workers.” The district court dismissed their
age-discrimination claims on that ground.
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The Workers base their age-discrimination claims on the allegation that PMI replaced them
with employees at the Piqua Plant who were, on average, 18 years younger than the Workers.
According to the record, however, PMI did not hire new hourly employees at its Piqua Plant. The
company instead filled the hourly positions with individuals who were employed by a temporary
employment agency and assigned by that agency to work at the Piqua Plant.
Under both the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 623, and Ohio
Revised Code § 4112.02, employers are prohibited from, among other things, discharging any
individual or otherwise discriminating against any individual with respect to the person’s
compensation, terms, conditions, or privileges of employment because of that individual’s age. The
McDonnell Douglas/Burdine evidentiary framework that is applied to ADEA claims is also used to
analyze age-discrimination claims brought under Ohio law. Mitchell v. Toledo Hosp., 964 F.2d 577,
582 (6th Cir. 1992) (“The McDonnell Douglas/Burdine formula is the evidentiary framework
applicable not only to claims brought under Title VII, but also to claims under ADEA [and] to
claims of discrimination under Ohio state law . . . .”) (citations omitted). A plaintiff who brings an
age-discrimination claim “must prove that age was a determining factor in the adverse employment
action that the employer took against him.” Phelps v. Yale Sec., Inc., 986 F.2d 1020, 1023 (6th Cir.
1993).
The McDonnell Douglas test requires a plaintiff to first establish a prima facie case of age
discrimination by showing that the plaintiff (1) was a member of a protected class of persons (i.e.,
a person age 40 or over), (2) was discharged, (3) was qualified for the position held, and, lastly,
(4) was replaced by someone outside of the protected class. Minadeo, 398 F.3d at 764. But where
the allegations of discrimination arise from a workforce reduction, “the fourth requirement is
modified so that the plaintiff must also demonstrate some ‘direct, circumstantial, or statistical
evidence tending to indicate that the employer singled out the plaintiff for discharge for
impermissible reasons.’” Phelps, 986 F.2d at 1023 (quoting Barnes v. Gencorp Inc., 896 F.2d 1457,
1465 (6th Cir. 1990), cert. denied, 498 U.S. 878 (1990)).
PMI laid off all of the hourly employees at its Dayton Plant pursuant to the reduction-in-
force provision contained in the CBA. Accordingly, this is a workforce-reduction case under Phelps
and requires the Workers to offer evidence indicating that PMI singled out the Workers based on
their age. PMI terminated 100% of its hourly employees, some of whom were age 40 or over and
some of whom were not. The company then used an employment agency to provide temporary
workers, some of whom were age 40 or over and some of whom were not, to fill all of the hourly
worker positions at the Piqua Plant. These facts alone, without more, do not raise an inference that
PMI terminated the Workers because of their age.
Even assuming that this is not a workforce-reduction case, the Workers still failed to allege
facts sufficient to create an inference of age-based discrimination. A person is replaced “only when
another employee is hired or reassigned to perform the plaintiff’s duties.” Barnes, 896 F.2d at 1465.
A plaintiff’s allegation that he or she was replaced by someone who was not employed by the
plaintiff’s employer, but was instead employed by another company with a contract to perform
services for the plaintiff’s employer, “cannot justify a reasonable inference of anti-age animus” on
that basis alone. Pages-Cahue v. Iberia Lineas Aereas de Espana, 82 F.3d 533, 539 (1st Cir. 1996)
(relying on Barnes, 896 F.2d at 1465). The fact that the employer assigned the former employee’s
work to an independent contractor that decided to employ younger persons to do the plaintiff’s work
is, without more, insufficient to establish a prima facie case. Mitchell v. Worldwide Underwriters
Ins. Co., 967 F.2d 565, 566 (11th Cir. 1992). Here, the temporary workers were hired, employed,
and assigned to fill the hourly wage positions at the Piqua Plant by a third party, not PMI. The
Workers fail to allege any facts suggesting that PMI had a role in choosing the temporary workers
who would be assigned to the Piqua Plant or that it requested younger workers from the temporary
employment agency.
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Based on the foregoing, the Workers failed to allege facts sufficient to create a reasonable
inference of age discrimination based on the Piqua Plant’s use of the temporary workers provided
by the independent agency. The Workers’ claims of age discrimination were thus properly
dismissed by the district court.
F. Breach of the collective bargaining agreement
The Workers’ Amended Complaint further alleged that PMI breached the CBA by closing
the Dayton Plant, terminating the Workers’ employment, and refusing to bargain with the union over
those decisions. Based on these allegations, the Workers asserted state-law claims for breach of
contract, anticipatory breach, waiver, and estoppel. The district court dismissed these claims on the
ground that they were preempted by federal law. On appeal, the Workers argue that the district court
should have continued the analysis under federal law by “treating [the] causes of action as claims
under § 301 of the Labor Management Relations Act [(LMRA)],” 29 U.S.C. § 185 (providing
federal courts with jurisdiction over any contract between an employer and a labor organization).
But as the following analysis indicates, these claims are fundamentally meritless, regardless of
whether they are analyzed under state or federal law.
1. Breach of contract
The Workers assert that PMI breached the CBA when it “terminated . . . the employee
Plaintiffs as part of the tax abatement scheme.” They fail, however, to identify any provision in the
CBA that prohibits PMI from terminating them. In fact, the CBA contains a “reduction-in-force”
provision that expressly permits PMI to terminate employees covered under the CBA. That
provision requires PMI to give employees “three (3) working days notice before layoff if
circumstances reasonably allow.” In addition, the CBA contains a provision stating that “[t]he
management and direction of the Plant and working forces is vested in the Company, except insofar
as is expressly abridged by specific provisions of this Contract.”
This court has held that “[i]t is clear . . . that neither federal labor law nor ordinary collective
bargaining agreements compel an employer to maintain in operation all or any part of its business.”
Heheman v. E. W. Scripps Co., 661 F.2d 1115, 1122 (6th Cir. 1981); see also Wimberly v. Clark
Controller Co., 364 F.2d 225, 228 (6th Cir. 1966) (holding that the plaintiffs failed to state a cause
of action under § 301 of the LMRA because, “[a]bsent an express contractual provision, there is no
prohibition against [an employer] moving its operations to [another state]”). Here, the CBA allows
PMI to terminate union employees at management’s discretion as long as the reduction-in-force
provisions are followed. The Workers’ own allegations show that PMI adhered to the CBA’s
“reduction in-force” provision when it gave the Workers advance notice of the plant closing. The
Workers’ argument that this claim should be analyzed under the LMRA as opposed to state law is
irrelevant because there is a complete absence of factual allegations to support a claim for breach
of contract. In sum, this claim is wholly without merit and the district court did not err in
dismissing it.
2. Anticipatory breach
The Workers’ Amended Complaint also alleges an “anticipatory breach.” It claims that “the
Defendants intentionally, willfully, and maliciously breached the contract rights of the Plaintiffs,”
and that the plaintiffs therefore had the right to treat the contract as breached.” The basis of this
claim appears to be an allegation that PMI refused to bargain or arbitrate with the Workers pursuant
to the CBA.
Under the terms of the CBA, however, the arbitration of disputes was voluntary and PMI had
no obligation to bargain with the Union over the closure of the Dayton Plant. Nor did the Workers
allege any facts suggesting that PMI engaged in any intentional, willful, or malicious conduct that
No. 05-4483 Campbell et al. v. PMI Food Equipment Group et al. Page 9
would give the Workers the right to treat the CBA as breached. Accordingly, the Workers have no
grounds for asserting a claim of anticipatory breach, and the district court did not err in dismissing
the claim.
3. Waiver and estoppel
Finally, the Workers claim that PMI “has, by its unlawful conduct, waived its rights or is
estopped to enforce the rights provided under the contract, federal pre-exemption [sic], or the
NLRB.” This claim is also meritless.
The Workers fail to assert any factual allegations showing that PMI engaged in “unlawful
conduct.” The only PMI conduct that could arguably be construed as wrongful is the
misrepresentation that the company allegedly made to the Ohio authorities regarding its
consideration of Kentucky as an alternative site. That alleged misrepresentation, however, was not
made to the Union and therefore does not support an allegation of “unlawful conduct.” In addition,
PMI never attempted to enforce its rights under the CBA; only the Workers have done so. The
Workers therefore have no grounds on which to assert that PMI waived any rights under the CBA
or that it is estopped from so doing. This claim was properly dismissed.
G. Malicious interference with the right to petition the government
The Workers’ next claim is that PMI maliciously interfered with their constitutional right
to petition the government when the company allegedly told Piqua, Miami County, and the state of
Ohio that it was considering Kentucky as an alternative location. According to the Workers, PMI
had no plans to move to Kentucky when the statement was made. This statement was apparently
a lobbying tactic that PMI used to obtain the most favorable tax treatment possible from Piqua.
PMI advances two arguments in defense against the Workers’ claims. First, the company
argues that the Workers failed to state a claim for malicious interference with the right to petition
because the Workers did not allege that they had ever attempted to petition the government. Second,
PMI argues that the Workers “cannot satisfy the second element of a malicious interference claim
because PMI’s efforts to persuade Piqua’s City Commission to grant it a tax abatement was [sic]
privileged” under the Noerr-Pennington doctrine, which is discussed in subsection 2 below.
1. State tort
The Ohio Court of Appeals first recognized “the tort of malicious interference with the
constitutional right to petition the government for redress of grievances” in Singer v. Fairborn,
598 N.E.2d 806, 814 (Ohio Ct. App. 1991). In that case, Howard Singer, a property owner in
Fairborn, Ohio, proposed an amendment to a zoning ordinance that affected his property. Id. at 808.
The city, in consultation with the city planning board, rejected his proposal. Id. Singer later learned
that two members of the city planning board had misrepresented to both the planning board and to
the city council certain facts relating to the proposal. Id. He sued the city, claiming that the
planning board members “maliciously and/or recklessly made fraudulent representations and
omissions with the intent to cause the planning board and city council to rely upon such
representations and to deny Singer’s proposed amendment.” Id. at 812. Singer alleged that, as a
result, he suffered serious financial damage. Id.
In finding for Singer, the court created a new cause of action:
An action at law should be available to redress the wrong caused to an injured party
as a result of such alleged conduct. We hold that the tort of malicious interference
with the constitutional right to petition the government for redress of grievances
(protected by Section 3, Article I of the Ohio Constitution, and by the First
No. 05-4483 Campbell et al. v. PMI Food Equipment Group et al. Page 10
Amendment to the United States Constitution) occurs when a third party, without a
privilege to do so, knowingly and maliciously makes a false statement for the
purpose of inducing a public body to act or to fail to act, when the act, or failure to
act, adversely affects the injured party.
Id. at 813-814. The Ohio Court of Appeals therefore held that Singer had stated a claim against the
two planning board members, and denied the defendants’ motion for summary judgment.
Tri-County Concrete Co. v. Huffman-Kirsch, No. 76866, 2000 Ohio App. LEXIS 4749 (Ohio
Ct. App. Oct. 12, 2000), is the only other Ohio case to discuss this tort. In that case, Tri-County
Concrete obtained a property-use variance from the city, which allowed the company to expand its
concrete plant. Id. at *3. A local resident who opposed the company’s expansion wrote a letter to
the city that expressed concerns regarding Tri-County Concrete’s property-use variance and that
contained allegedly false statements about Tri-County Concrete’s compliance record. Id. at *5-6.
Tri-County Concrete sued the resident based on Singer, claiming malicious interference with the
right to petition the government. Id. at *13. The court found that Tri-County Concrete had properly
stated a claim, but denied its motion for summary judgment because the resident’s statements were
constitutionally protected expressions of her opinion, and the company had failed to meet its burden
of establishing that the resident had made the statements maliciously. Id. at *15.
Like the plaintiff in Singer, Tri-County Concrete had in fact submitted a petition to the
government. See Singer, 598 N.E.2d at 808 (proposing to amend a zoning ordinance); Tri-County
Concrete, 2000 Ohio App. LEXIS 4749 at *3 (proposing a property-use variance). And the
defendant’s challenged conduct in each case was prompted by, and in direct response to, the
plaintiff’s petition. See Singer, 598 N.E.2d at 808 (two planning board members made false
statements to the city in response to Singer’s proposal); Tri-County Concrete, 2000 Ohio App.
LEXIS 4749 at *5-6 (a resident wrote a letter questioning Tri-County Concrete’s property-use
variance based on accusations that Tri-County Concrete was not compliant with regulations
elsewhere).
Although neither the Singer opinion nor the Tri-County Concrete opinion explicitly states
that a plaintiff must actually petition the government in order to state a claim, the district court
below recognized that such a requirement is at the heart of this cause of action: “Central to the tort
. . . is the idea that a plaintiff has attempted, or planned to attempt, to petition the government for
redress of grievances.” (citing Singer, 598 N.E.2d at 813-14). The district court’s holding that a
plaintiff must first exercise the right to petition the government is supported not only by the specific
facts of Singer and Tri-County Concrete, but by First Amendment caselaw.
The Singer court grounded the tort of malicious interference on the right to petition the
government as found in the First Amendment to the U.S. Constitution and Article I, Section 3 of
Ohio’s Constitution. See 598 N.E.2d at 813-14 (citing U.S. Const. amend. I (protecting the right
of the people to “petition the Government for a redress of grievances”), and Ohio Const. Art. I, § 3
(“The people have the right to . . . petition the general assembly for the redress of grievances.”)).
Because the purpose of the tort is to reinforce the First Amendment’s protection of the right to
petition the government, a review of this court’s relevant jurisprudence is appropriate for guidance
in resolving this issue.
In this and other circuits, a “cause of action for violation of the Petition Clause is subject to
the same analysis applied to a claim arising under the Speech Clause.” Valot v. Se. Local Sch. Dist.
Bd. of Educ., 107 F.3d 1220, 1226 (6th Cir. 1997); see also Thaddeus-X v. Blatter, 175 F.3d 378,
390, n.6 (6th Cir. 1999) (citing cases from various federal circuits). The threshold question in a
right-to-petition case under the First Amendment caselaw of this and other circuits is therefore
“whether the plaintiff’s conduct deserves constitutional protection.” Reichert v. Draud, 701 F.2d
No. 05-4483 Campbell et al. v. PMI Food Equipment Group et al. Page 11
1168, 1170 (6th Cir. 1983). The plain language of the First Amendment makes clear that a
“petition” triggers the amendment’s protections. Thaddeus-X, 175 F.3d at 387 (finding that, just as
“‘[p]rotected conduct’ in the statutory settings is . . . that conduct which the statute defines as
protected[,] . . . certain provisions of the Constitution define individual rights with which the
government generally cannot interfere—actions taken pursuant to those rights are ‘protected’ by the
Constitution”); see also Foraker v. Chaffinch, 2007 WL 2445561 at *4 (3d Cir. Aug. 30, 2007)
(explaining that “when one files a ‘petition’ one is addressing government and asking government
to fix what, allegedly, government has broken or has failed in its duty to repair,” and that “[f]ormal
petitions are defined by their invocation of a formal mechanism of redress” (citing Connick v. Myers,
461 U.S. 138, 154 (1983)).
In light of the foregoing, the Workers must show that their conduct deserves protection under
the First Amendment’s Petition Clause in order to state a claim for malicious interference with that
right. They have failed to make such a showing. In short, the Workers did not petition the
government and they took no affirmative steps to do so by, for example, participating in some way
in the government’s consideration of PMI’s tax-abatement proposal. Only petitions to the
government, not inaction, are protected and provide a basis for liability where a violation of that
right has occurred. Accordingly, the Workers’ claim fails at the first step of the inquiry under this
court’s First Amendment caselaw, upon which the tort is based. The district court therefore
correctly held that a petition to the government is a prerequisite for stating a claim of malicious
interference with the right to petition.
2. Noerr-Pennington doctrine
PMI also argues that the Workers’ claim fails because PMI’s conduct in lobbying Piqua,
Miami County, and the state of Ohio for a tax abatement is protected activity under the Petition
Clause of the First Amendment. To protect the right to petition, the Supreme Court has established
what has become known as the “Noerr-Pennington doctrine.” The essence of the doctrine, as set
forth in the companion cases of Eastern Railroad Presidents Conference v. Noerr Motor Freight,
Inc., 365 U.S. 127 (1961), and United Mine Workers of America v. Pennington, 381 U.S. 657
(1965), is that “parties who petition the government for governmental action favorable to them
cannot be prosecuted under the antitrust laws even though their petitions are motivated by
anticompetitive intent.” Video Int’l Prod., Inc. v. Warner-Amex Cable Commc’ns, Inc., 858 F.2d
1075, 1082 (5th Cir. 1988); see also Westmac, Inc. v. Smith, 797 F.2d 313, 315 (6th Cir. 1986)
(“[G]enuine attempts to influence passage or enforcement of laws are immune from antitrust
scrutiny, regardless of the anticompetitive purpose behind such attempts.”).
Although the Noerr-Pennington doctrine was initially recognized in the antitrust field, the
federal courts have by analogy applied it to claims brought under both state and federal laws,
including common law claims of tortious interference. See Video Int’l Prod., 858 F.2d at 1084
(applying the doctrine to business tort claims, and citing cases); Eaton v. Newport Bd. of Educ.,
975 F.2d 292, 298 (6th Cir. 1992) (extending the doctrine to § 1983 claims). The doctrine is, at
bottom, founded upon a concern for the First Amendment right to petition and, therefore, has been
applied to claims implicating that right. See Cardtoons, L.C. v. Major League Baseball Players
Ass’n, 208 F.3d 885, 889 (10th Cir. 2000) (quoting Video Int’l Prod., 858 F.2d at 1084); Video Int’l
Prod., 858 F.2d at 1084 (“There is simply no reason that a common-law tort can any more
permissibly abridge or chill the constitutional right of petition than can a statutory claim such as
antitrust.”) PMI’s Noerr-Pennington argument might well have merit in light of the cases applying
Noerr-Pennington’s protection to state common law claims sounding in tortious interference, but
we need not decide that issue here because the Workers failed to state such a claim, as explained in
the Part II.G.1. above.
No. 05-4483 Campbell et al. v. PMI Food Equipment Group et al. Page 12
H. Loss of consortium
The Workers’ final claim is for loss of consortium on behalf of the spouses of the terminated
hourly employees. Such a claim, however, must be predicated on a tort involving a bodily injury,
and the district court properly dismissed the Workers’ claim for failure to allege that any bodily
injuries were sustained by the terminated employees as a result of the underlying tort claims
(namely, a claim of fraud and violations under the WARN Act, which is defined below).
“[A] claim for loss of consortium is derivative in that the claim is dependent upon the
defendant’s having committed a legally cognizable tort upon the spouse who suffers bodily injury.”
Bowen v. Kil-Kare, Inc., 585 N.E.2d 384, 392 (Ohio 1992) (emphasis added); see also Blatnik v.
Avery Dennison Corp., 774 N.E.2d 282, 297 (Ohio Ct. App. 2002) (holding that a “claim for loss
of consortium . . . cannot stand because there is no evidence of bodily injury sustained”);
Cunningham v. Hildebrand, 755 N.E.2d 384, 393 (Ohio Ct. App. 2001) (holding that the trial court
properly dismissed the loss-of-consortium claim brought by the plaintiff’s wife where it was derived
from the plaintiff’s emotional distress claim and involved no bodily injury to the plaintiff). Ohio
courts have repeatedly held that the term “bodily injury” does not include nonphysical harms.
See Blatnik, 774 N.E.2d at 296 (citing Tomlinson v. Skolnik, 540 N.E.2d 716 (Ohio 1989)); Bowman
v. Holcomb, 614 N.E.2d 838, 840 (Ohio Ct. App. 1992).
The Workers base their claims of loss of consortium on a claim of fraud and violations of
the Worker Adjustment and Retraining Notification Act (WARN Act), 29 U.S.C. § 2102 (requiring,
among other things, that employees who are to be terminated as part of a mass layoff or plant closing
receive at least 60 days’ written notice). But the Workers have not alleged that any of the terminated
employees sustained a bodily injury as a result of the alleged fraud or WARN Act violations. The
Workers have therefore failed to state a claim for loss of consortium, and the district court properly
dismissed that claim.
The Workers’ citations to Paugh v. Hanks, 451 N.E.2d 759 (Ohio 1983), and Rigby v.
Fallsway Equip. Co., 779 N.E.2d 1056 (Ohio Ct. App. 2002), are misplaced and warrant no
different result. In Paugh, the Ohio Supreme Court recognized for the first time the tort of negligent
infliction of emotional distress and remanded the case, including all of the plaintiff’s claims, to the
trial court for further proceedings in light of its decision. Paugh, 451 N.E.2d at 765, 768. The court
did not, however, rule on the loss-of-consortium claim; it simply directed the trial court to evaluate
that claim, along with all of the plaintiff’s claims, in light of its decision. Id. at 767-68. Rigby is
also inapposite because, as PMI aptly notes, that “court had no occasion to address the bodily injury
requirement because the defendant failed to raise the issue” and, in any event, a nurse testified that
the husband, who had sued his employer for intentional infliction of emotional distress, had in fact
sustained physical injuries. See Rigby, 779 N.E.2d at 1065. Accordingly, the court held that “there
exists a primary action to support the claim of loss of consortium.” Id. at 168.
III. CONCLUSION
For the reasons discussed above, we AFFIRM the judgment of the district court.