Free Motion to Dismiss - District Court of Colorado - Colorado

Case 1:04-cv-01185-WDM-PAC

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Filed 02/13/2006

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-CV-1185-WDM-PAC GREG FELDMAN, Plaintiff, v. JOBSON PUBLISHING, LLC, a Delaware limited liability company, f/k/a Jobson Publishing Acquisition, LLC, f/k/a Jobson Publishing, L.L.C.; and XJP, LLC, a Delaware limited liability company, f/k/a Jobson Publishing, L.L.C., Defendants.

MOTION TO DISMISS PLAINTIFF'S SECOND AMENDED COMPLAINT FROM DEFENDANT JOBSON PUBLISHING, LLC Defendant Jobson Publishing, LLC ("Purchaser Jobson"),1 by and through its attorneys, Hall & Evans, L.L.C., hereby submit this Motion to Dismiss Plaintiff's Second Amended Complaint, as follows: INTRODUCTION AND PROCEDURAL HISTORY On July 14, 2004, Plaintiff filed his Amended Complaint and Jury Demand (the "Amended Complaint") in this matter, naming as defendants Jobson Publishing L.L.C. ("Employer Jobson") and two of its departments, the Postgraduate Institute for Medicine, Inc. ("PIM") and the International Center for Postgraduate Medical Education ("ICPME").

Purchaser Jobson was formerly called Jobson Publishing Acquisition, LLC. The caption in this case incorrectly states that Purchaser Jobson was formerly known as Jobson Publishing, L.L.C.

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Following briefing on and denial of a motion to dismiss invoking an arbitration agreement, Employer Jobson and PIM submitted their answer to the Amended Complaint. On January 6, 2006, Plaintiff filed a Motion for Leave to File Second Amended Complaint, asking to remove Employer Jobson, PIM, and ICPME as defendants, to substitute XJP, LLC ("XJP") and Purchaser Jobson as defendants, and to add a state law claim for outrageous conduct based on the allegations contained therein. Defendants filed a response, agreeing that XJP should be

substituted as a defendant in place of Employer Jobson, PIM, and ICPME, but arguing that Purchaser Jobson was not a properly named defendant and that the state law claim was not properly brought. On January 19, 2006, this Court issued an Order granting Plaintiff permission to change the named defendants, but denying the request to add the state law claim. The Court noted that Defendants' "arguments concerning the naming of Purchaser Jobson are clearly appropriate for a dispositive motion," but permitted Plaintiff to amend the complaint to add Purchaser Jobson as a defendant due to the "liberal interpretation of Rule 15(a)." [See Order Re: Motion for Leave to File Second Amended Complaint, 1/19/2006, at p.4]. Pursuant to the Court's Order, Plaintiff filed a Second Amended Complaint on January 25, 2006, naming as the sole defendants Purchaser Jobson and XJP. Purchaser Jobson now moves for dismissal of all claims against it because it is not properly named as a defendant in this matter.2 ARGUMENT Plaintiff was employed by Employer Jobson [see Second Amended Complaint, at ¶9], and all of the allegations of discrimination, retaliation, and interference with a contract raised by

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XJP is filing a separate answer to the Second Amended Complaint. 2

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Plaintiff in his Second Amended Complaint occurred while Plaintiff was employed by Employer Jobson. [See id. at ¶13-44]. On April 1, 2005, Purchaser Jobson, a newly-formed and separately owned entity which was then called Jobson Publishing Acquisition, LLC, purchased certain of Employer Jobson's assets. [See id. at ¶45]. In May of 2005, Purchaser Jobson changed its name to Jobson Publishing, LLC. [See id.] Plaintiff's Second Amended Complaint nowhere alleges Plaintiff was ever employed by Purchaser Jobson, and nowhere asserts that Purchaser Jobson undertook any of the alleged wrongful activity that forms the basis for his claims. Instead, the sole basis for naming Purchaser Jobson as a defendant is Plaintiff's assertion that Purchaser Jobson "does substantially the same business (i.e., a `specialty healthcare communications, publishing and medical education company'), with substantially the same work force, with the same jobs and working conditions, and with the same business machinery, equipment and methods of production that `Jobson Publishing L.L.C.' did during the period of Mr. Feldman's employment." [Id. at ¶46]. By these allegations, which must be taken as true for purposes of this Motion to Dismiss, Plaintiff appears to be attempting to implicate Purchaser Jobson in this matter under a theory of successor liability. See Trujillo v. Longhorn

Manufacturing Co., Inc., 694 F.2d 221, 225 n.3 (10th Cir. 1982) (adopting nine-factor test from E.E.O.C. v. MacMillan Bloedel Containers, Inc., 503 F.2d 1086, 1094 (6th Cir. 1974), for determining successor liability). However, regardless of whether one or more of the factors set out in Trujillo for a finding of successor liability are present in this case, the express terms of the Asset Purchase Agreement between Employer Jobson and Purchaser Jobson preclude holding Purchaser Jobson liable with respect to Plaintiff's claims.

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The Asset Purchase Agreement explicitly defined which assets Purchaser Jobson was acquiring, [see Asset Purchase Agreement, 4/1/2005, at §2.1 (relevant portions attached hereto as Exhibit A)],3 which assets were excluded from the sale, [see id. at §2.2], which liabilities Purchaser Jobson was assuming, [see id. at §2.3], and which liabilities were excluded from the sale. [See id.] Among the liabilities excluded from the sale were "the liabilities related to the litigation and claims listed on Schedule 4.12." [See id.] Schedule 4.12 lists the following litigation: Greg Feldman's employment with the Jobson Education Group was terminated in August 2003 when the Company consolidated its two education businesses to one location in Englewood, Colorado. Mr. Feldman alleged that the termination of his employment was a result of discrimination and retaliation because of his religion in a complaint filed with the EEOC in October 2003. The EEOC issued him a right-to-sue letter, and he subsequently filed a lawsuit in the district court in Denver, Colorado. The Company has filed a motion to dismiss or compel arbitration and is awaiting a decision. This matter is being handled by counsel chosen by the insurer. [See id. at Schedule 4.12(1)]. Therefore, under the express terms of the Asset Purchase

Agreement, Purchaser Jobson expressly disclaimed liability for this lawsuit. When the Tenth Circuit adopted the nine-factor successor liability test in Trujillo, it clearly implied that even where all the factors are present, a successor entity can nevertheless avoid liability by disclaiming assumption of such liability in the applicable contract: "We are

Because the Second Amended Complaint refers to and relies on the Asset Purchase Agreement, this Court may consider the attached copy of such agreement without converting this motion to a motion for summary judgment. See GFF Corp. v. Associated Wholesale Grocers, 130 F.3d 1381, 1384 (10th Cir. 1997) (Although Fed. R. Civ. P. 12(b) requires that a motion to dismiss be treated as a motion for summary judgment if matters outside the pleadings are presented to and not excluded by the court, "if a plaintiff does not incorporate by reference or attach a document to its complaint, but the document is referred to in the complaint and is central to the plaintiff's claim, a defendant may submit an indisputably authentic copy to the court to be considered on a motion to dismiss."). 4

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not persuaded that imposing liability on the defendant as a successor corporation works an unfair hardship on the company. It had notice of the EEOC complaint and could have provided for its nonliability or indemnification in the sale agreement." Id. at 225 (emphasis added)); see also Scott v. Sopris Imports Ltd., 962 F.Supp. 1356, 1360 (D. Colo. 1997) ("Indeed, the court in Trujillo specifically relied upon the defendant's notice to justify its decision against an argument of undue hardship because the defendant had an opportunity to contract around its liability."). In this case, Purchaser Jobson had notice of the EEOC charge brought by Plaintiff and expressly "provided for its nonliability" for such claim in the Asset Purchase Agreement. See Trujillo, 694 F.2d at 225. Under the plain import of Trujillo and the plain language of the Asset Purchase Agreement, no successor liability can be assigned to Purchaser Jobson with respect to Plaintiff's claims, and Purchaser Jobson should be dismissed from this case as a matter of law. WHEREFORE, Defendant Jobson Publishing, LLC respectfully requests that this Court enter an order dismissing it as a defendant in this matter, with prejudice, and entering such additional relief as this Court deems just and appropriate.

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Dated this 13th day of February 2006. Respectfully submitted,

s/__Gillian Dale _______ Thomas J. Lyons, Esq. Gillian Dale, Esq. Attorneys for Defendants Hall & Evans, L.L.C. 1125 17th Street, Suite 600 Denver, CO 80202-2052 (303) 628-3300 phone (303) 628-3368 fax [email protected] [email protected]

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CERTIFICATE OF MAILING I hereby certify that on the 13th day of February, 2006, I electronically filed the foregoing MOTION TO DISMISS PLAINTIFF'S SECOND AMENDED COMPLAINT FROM DEFENDANT JOBSON PUBLISHING, LLC with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: Ari Krichiver Nantiya Ruan Laura L. Rovner Marybeth Walsh Student Law Office University of Denver Sturm College of Law 2255 E. Evans Avenue Denver, CO 80208 [email protected] [email protected] [email protected] [email protected]

s/ Denise Gutierrez . Thomas J. Lyons, Esq. Gillian Dale, Esq. Attorneys for Defendants Hall & Evans, L.L.C. 1125 17th Street, Suite 600 Denver, CO 80202-2052 (303) 628-3300 phone (303) 628-3368 fax [email protected] [email protected]

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