The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge
MEMORANDUM DECISION AND ORDER
The Court has before it a motion to dismiss pursuant to Rules 9(b) and 12(b)(6) filed by the Red Cross defendants. The motion is fully briefed and at issue. For the reasons expressed below, the Court will grant the motion in part and deny it in part.
Plaintiff Tolman alleges that he was fired from his position with the Idaho Chapter of the American Red Cross for complaining about the misuse of public money. He has sued both the Idaho Chapter of the American Red Cross and the national organization known as the American Red Cross. He claims that the Idaho Chapter was controlled by, and acted at the behest of, the American Red Cross. His complaint originally contained five causes of action: (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) fraud; (4) violation of the False Claims Act Whistleblower Statute; and (5) a claim for a declaratory judgment that the National Red Cross and the Idaho Chapter are a single entity.
The Red Cross defendants filed a motion to dismiss alleging that the fraud claim was insufficient under Rule 9(b) and that all the causes of action fail to state a claim under Rule 12(b)(6). The Red Cross argued that the Red Cross Employee Handbook clearly stated that Tolman was an at-will employee who could be fired for any reason. Tolman responded that he had been promised that he would only be fired for cause.
The Court granted the motion in part, finding that the fraud claim was not pled with the requisite specificity, and that the other claims also needed to be described in more detail. With regard to the fraud claim, the Court allowed Tolman an opportunity to amend his complaint, holding that he could cure the vagueness if he (1) named the individuals who knowingly made the alleged false promises that he was not an "at-will" employee, and (2) described "when and where" those false promises were made.
With regard to Tolman's breach of contract claim, the Court found that under the Employee Handbook, only the Chapter's CEO had the authority to alter Tolman's at-will status. Because Tolman's complaint failed to identify who had promised him that he could only be fired for cause, the Court directed him to amend his complaint to identify (1) who made the promises to him and (2) when and where those promises were made.*fn1
With regard to Count Four alleging a violation of the False Claims Act (FCA), the Court found that the FCA required Tolman to allege that he suffered retaliation for engaging in conduct protected by the FCA. Tolman alleged that he was fired after complaining about the "misuse of public funds," but the complaint seemed to allege that this "misuse" was nothing more than inept fundraising. The Court directed Tolman to amend his complaint "to more precisely describe the fraud against the government, being committed by the National Red Cross and the Idaho Chapter employees, that he was complaining about that caused him to lose his job." See Memorandum Decision (Dkt. No. 15) at p. 11.
Finally, the Court dismissed Count Five. Thereafter, Tolman amended his complaint, and the defendants filed another motion to dismiss, alleging that Tolman's failure to cure the defects identified by the Court warrant dismissal of the case.
Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests," Bell Atlantic Corp. v. Twombly, 550 U.S. 554 (2007). An allegation of fraud, however, requires more: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b). Claims of fraud -- including FCA retaliation claims -- must, in addition to pleading with particularity, also plead plausible allegations. Cafasso v. General Dynamics C4 Systems, Inc., 637 F.3d 1047 (9th Cir. 2011). That is, the pleading must state "enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the misconduct alleged]." Id. at 1055 (quoting Twombly, 550 U.S. at 556).
While a complaint attacked by a Rule 12(b)(6) motion to dismiss "does not need detailed factual allegations," it must set forth "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Id. at 570. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. at 556. The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully. Id. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of 'entitlement to relief." Id. at 557.
The Supreme Court identified two "working principles" that underlie Twombly. See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Id. "Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 1950. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id. "Determining whether a complaint ...