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Harvey v. Maximus Inc.

United States District Court, D. Idaho

November 19, 2014

REGIS HARVEY, AMANDA COLLINS, ANDREA MCDONALD, Individually and On Behalf of All Others Similarly Situated, Plaintiff,
v.
MAXIMUS INC., Defendant.

MEMORANDUM DECISION AND ORDER

B. LYNN WINMILL, Chief District Judge.

INTRODUCTION

Before the Court is Defendant Maximus' Motion to Dismiss Amended Complaint (Dkt. 5). The Court finds that oral argument will not assist the decisional process. Based on the pleadings and record before it, the Court will grant in part and deny in part the Motion, as more fully expressed below.

LEGAL STANDARD

1. Legal Standard for Rule 12(b)(6) Motions

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. 544, 555, 127 S.Ct. 1955, 1964 (2007). 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 in Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). First, the court need not accept as true, legal conclusions that are couched as factual allegations. Id . Rule 8 does not "unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 678-79. Second, to survive a motion to dismiss, a complaint must state a plausible claim for relief. Id. at 679. "Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

Under Rule 12(b)(6), the Court may consider documents referred to in the complaint, although not attached thereto, without transforming the motion to dismiss into a motion for summary judgment. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).

ANALYSIS

After acquiring a new contract to serve as a call center for health insurance exchanges, Maximus hired new employees to meet its demand. Maximus employs both "regular capacity" and "limited service" employees. Limited service employees work full-time for a defined period of time, while regular capacity employees work at-will without a contractually defined period of time. Plaintiffs were hired as regular capacity employees and believed that they were accepting a career opportunity with Maximus. They were let go as part of a reduction in force, which they claim was planned before they were hired. Plaintiffs argue fraudulent misrepresentation because Maximus marketed and offered open ended career opportunities when it knew that they were limited in time. Plaintiffs also argue negligent misrepresentation and promissory estoppel. Maximus' motion seeks to dismiss the complaint for failure to state a claim and plead fraud with particularity. Def.'s Br. at 3 Dkt 5-1.

I. Fraudulent Misrepresentation

Under Federal Rule of Civil Procedure 9(b), a plaintiff must plead each of the elements of a fraud claim with particularity-meaning that a plaintiff "must set forth more than the neutral facts necessary to identify the transaction." Cooper v. Pickett, 137 F.3d 616, 625 (9th Cir.1997). In other words, fraud claims must be accompanied by the "who, what, when, where, and how" of the fraudulent conduct charged. Vess v. Ciba-Geigy Corp., USA, 317 F.3d 1097, 1106 (9th Cir.2003). A pleading is sufficient under Rule 9(b) if it identifies the circumstances constituting fraud so that a defendant can prepare an adequate answer from the allegations. Moore v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th Cir.1989). While statements of the time, place, and nature of the alleged fraudulent activities are sufficient, mere conclusory allegations of fraud are insufficient. Id . A party may allege on information and belief under circumstances in which the required facts are peculiarly within the defendant's knowledge or control, but, should they do so, the party must still state the factual basis for the belief. Neubronner v. Milken, 6 F.3d 666, 672 (9th Cir.1993).

Maximus contends that Plaintiffs complaint contains fundamental defects which prevent Maximus from preparing an adequate response. These fundamental defects include lack of particularity in general, and ...


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