author: JOINER, District Judge.

text:
    Rubin H. BRANTLEY, Plaintiff, v. ZANTOP INTERNATIONAL AIRLINES, INC., Defendant.
    Civ. A. No. 85CV-60070-AA.
    United States District Court, E.D. Michigan, S.D.
    Sept. 26, 1985.

      Rubin H. Brantley, pro se.
    Robert M. Vercruysse and Daniel B. Tukel, Butzel, Long, Gust, Klein & Van Zile, Detroit, Mich., for defendant.
   MEMORANDUM OPINION AND ORDER

JOINER, District Judge.

This is an employment discrimination case brought by plaintiff Rubin Brantley against Zantop International Airlines, his former employer. The second amended complaint states that plaintiff was hired by Zantop in September, 1979, and promoted to the position of flight engineer trainee in April, 1983. Plaintiffs problems with Zantop allegedly began with a performance evaluation report prepared by three Zantop employees named Weir, Cole and Tucker. The report stated that plaintiff reported for work under the influence of alcohol, and called him “unreliable.” Weir and Tucker showed the report to Harold Zantop, vice president in charge of personnel at Zantop, on or around March 9, 1984. On March 13, 1984, plaintiff was demoted, and on March 22, 1984, plaintiffs employment was terminated. Plaintiff strenuously denies that he was ever drunk or unreliable at work, and claims that he was the victim of racial discrimination.

The case comes before the court on defendant’s motion to dismiss Count IV of the complaint. Count IV alleges that the report prepared by Weir, Cole and Tucker libeled plaintiff. It demands judgment against defendant “in the amount of $750,-000.00 including exemplary damages and punitive damages in the amount of $1,500,-000.00.”

Defendant first urges this court to dismiss Count IV for failure to state a claim of libel. Defendant contends that plaintiff has failed to allege the requisite element of publication. It relies on the law of such states as Alabama and Oklahoma for the proposition that communication of libel among agents of a single corporation does not constitute publication of that libel. See, e.g., United States Steel Corp. v. Darby, 516 F.2d 961, 963-64 (5th Cir.1975) (interpreting Alabama law); M.F. Patterson Dental Supply Co. v. Wadley, 401 F.2d 167, 171 (10th Cir.1968) (interpreting Oklahoma law).

The Supreme Court of Michigan, however, has clearly held that intra-corporate communication can constitute the publication of libel. In Bacon v. Michigan Cent. R.R. Co., 55 Mich. 224, 21 N.W. 324 (1884), plaintiff sued his former employer for libel. The railroad had included plaintiff on its list of discharged employees, and indicated that plaintiff had been discharged for stealing. The railroad then sent the list to its twenty-nine department heads located in Michigan, Indiana and Illinois. The Michigan Supreme Court stated:

But the argument is and the circuit judge so held, that the transmission of the libel from the superintendent to the twenty-nine heads of department in Michigan, Indiana and Illinois was only passing the libel from one agent of defendant to another agent of defendant, and it had never reached the hands or knowledge of a third person, but in fact remained in the possession of the composer.
This argument is wholly untenable. If a person compose a libel and send it to his agent, to be read by him, and it reaches its destination and is read by such agent, it is a sufficient publication to support the action. There are in this country railroad and telegraph corporations whose lines extend through many states and who employ many thousand agents. There are a great number of insurance companies employing agencies in several states. Can it be possible that these corporations possess an immunity to defame any person by sending such libel to every agent in their employment? Why should they possess this immunity more than an individual employing a large number of agents? Why should it be held a publication in one case and not in the other? In my opinion every agent to whom this discharge list was delivered was a third person respecting this corporation and the plaintiff, and it constituted a publication of the libel.

55 Mich, at 228-29. See also Sias v. General Motors Corp., 372 Mich. 542, 548, 127 N.W.2d 357 (1964) (finding publication of libel when company management called in plaintiffs fellow employees to explain that plaintiff had been discharged for theft); Ball v. White, 3 Mich.App. 579, 584, 143 N.W.2d 188 (1966) (citing Bacon for the proposition that “[a]ll that is necessary for a publication to exist is the delivery of the defamatory matter to any person other than the one libeled.”).

The foregoing discussion reveals that Michigan law considers intra-corporate communication of libel to be publication of that libel. Therefore, defendant’s motion to dismiss Count IV- for failure to state a claim must be denied.

Defendant next urges this court to dismiss plaintiff’s request for punitive damages in Count IV, arguing that Michigan law does not permit an award of such damages. The relevant provisions are found in the Michigan libel statute, Mich.Comp. Laws Ann. § 600.2911(2) (West 1968):

(2) Libel or slander; damages, actual, exemplary, retraction, (a) Except as provided in (b), in actions based on libel or slander the plaintiff is entitled to recover only for the actual damages which he has suffered in respect to his property, business, trade, profession, occupation, or feelings.
(b) Exemplary and punitive damages shall not be recovered in actions for libel unless the plaintiff, before instituting his action gives notice to the defendant to publish a retraction and allows a reasonable time to do so, and proof of the publication or correction shall be admissible in evidence under a denial on the question of the good faith of the defendant, and in mitigation and reduction of exemplary or punitive damages. The retraction shall be published in the same size type, in the same editions and as far as practicable, in substantially the same position as the original libel.

At the oral hearing on defendant’s motion, plaintiff claimed that § 600.2911(2)(b) entitles him to punitive damages, because he demanded a retraction of the alleged libel before instituting the present lawsuit. Defendant admits, for purposes of its motion, that it received a letter from plaintiff demanding the retraction. However, defendant denies that plaintiff’s demand entitles him to punitive damages.

Defendant cites a recent Michigan Supreme Court opinion interpreting the “exemplary and punitive damage” language of § 600.2911(2). In Peisner v. Detroit Free Press, Inc., the court stated:

At first blush the use of the terms “exemplary and punitive” suggests a legislative intent to permit an award of damages — in addition to actual damages — for the purposes either of punishing {i.e., specifically deterring) defendant or of making an example of defendant for the benefit of other potential purveyors of libel (i.e., generally deterring). The history of that provision and the Michigan cases interpreting it, however, reveal that not to be the case.
Even before the original version of our libel statute was enacted, this Court had established the principle that “vindictive or exemplary” damages for libel are merely a species of “actual” (i.e., compensatory) damages awarded to compensate plaintiff for the increased injury to feelings directly attributable to defendant’s fault in publishing the libel ...
Notwithstanding the separate treatment of “actual” injury-to-feelings damages and “exemplary or punitive damages” in the statute, this Court continued to interpret the terms “exemplary or punitive” as referring to damages intended solely to compensate plaintiff for the increase in injury to feelings attributable to defendant’s fault (or malice, in the common-law sense) in publishing the libel____
Because the Legislature, cognizant of this longstanding judicial gloss limiting exemplary and punitive damages to a compensatory role, has on several occasions through the years reenacted the libel statute without change, we conclude the Legislature intended that any award of “exemplary and punitive” damages comport with the established common-law gloss on those terms.

421 Mich. 125 at 130-33, 364 N.W.2d 600 (1984) (citations omitted; emphasis in original). Therefore, Michigan law does not permit a plaintiff to recover damages for the purpose of punishing the defendant.

Defendant further argues that § 600.2911(2)(b) refers only to media defendants, and thus is inapplicable to the present case. It notes that the statute allows exemplary and punitive damages only when' plaintiff has demanded a retraction from defendant, and then provides that “[t]he retraction shall be published in the same size type, in the same editions and as far as practicable, in substantially the same position as the original libel” (emphasis added). This language certainly appears to apply to a media, rather than to a corporate, defendant.

Defendant’s position is bolstered by a review of the earlier versions of the Michigan libel statute. The early statutes are clearly directed to a newspaper defendant. For example, the 1885 libel statute provided:

SECTION 1. The People of the State of Michigan enact, In any suits brought for the publication of a libel in any newspaper in this State the plaintiff shall recover only actual damages if it shall appear that the publication was made in good faith and did not involve a criminal charge, and its falsity was due to mistake or misapprehension of the facts, and that in the next regular issue of said newspaper after such mistake or misapprehension was brought to the knowledge of the publisher or publishers, whether before or after suit brought, a correction was published in as conspicuous a manner and place in said newspaper as was the article sued on as libelous.
SECTION 2. In any action or suit for the publication of a libel in any newspaper in this State, the plaintiff shall not be entitled to recover, in addition to actual damages, any greater sum than five thousand dollars.
SECTION 3. The words “actual damages” in the foregoing section shall be construed to include all damages the plaintiff may show he has suffered in respect to his property, business, trade, profession or occupation, and not other damages.

1885 Mieh.Pub.Acts 233 (emphasis added and deleted).

The 1895 libel statute closely resembles the current version, with minor variations in the wording that perhaps make it clearer that the statute addresses a media defendant:

SECTION 1. The People of the State of Michigan enajct, That in suits brought for the recovery of damages for libel or slander in this State, the plaintiff shall be entitled to recover only such actual damages as he may have suffered in respect to his property, business, trade, profession, occupation or feelings.
SECTION 3. No exemplary or punitive damages shall be recovered unless the plaintiff shall before bringing suit give notice by mail or otherwise to the defendant to publish a retraction of the libel, and allow the defendant a reasonable time in which to publish such retraction, and make such amends as are reasonable and possible under the circumstances of the case; and proof of the publication or correction shall be admissible in evidence under the general issue on the question of the good faith of the defendant, and in mitigation and reduction of exemplary or punitive damages: Provided That the retraction shall be published in the same type and in the same editions of the paper as the original libel, and so far as practicable in the same position.

1895 Mich.Pub.Acts 216 (emphasis added and deleted).

The early versions of the Michigan libel statute reveal that the language of the current statute was taken from a particular context. That context was a suit by a plaintiff against a newspaper that had allegedly libeled him. The current statute retains enough of the original wording to indicate that its exemplary and punitive damage provisions continue to apply only to media defendants.

For the foregoing reasons, defendant’s motion to dismiss Count IV in its entirety is denied. However, defendant’s motion to dismiss the Count IV demand for exemplary and punitive damages is granted.

SO ORDERED.

      . Although plaintiff demands “exemplary damages and punitive damages” in Count IV of the complaint, defendant moves to dismiss the punitive damages request without mentioning the exemplary damages request. This court, however, will interpret defendant’s motion to apply to both of plaintiff’s requests. The Michigan Supreme Court has found the words "exemplary” and "punitive,” as used in the libel statute, to be interchangeable terms that both denote punitive damages. See Peisner, supra, 421 Mich, at 133 n. 9, 364 N.W.2d 600.


source: Caselaw Access Project

author: BUA, District Judge.

license: Public Domain

text:
    ELECTRO MEDICAL SYSTEMS S.A., Plaintiff, v. COOPER LASERSONICS, INC., et al., Defendants.
    No. 84C10507.
    United States District Court, N.D. Illinois, E.D.
    Sept. 26, 1985.

      John D. Simpson, Steven H. Noll, Hill, Van Santen, Steadman & Simpson, Chicago, 111., for plaintiff.
    James M. Wetzel, Robert M. Ward, Cook, Wetzel & Egan, Ltd., Chicago, 111., for defendants.
   ORDER

BUA, District Judge.

Before the Court is defendants’ motion, pursuant to Fed.R.Civ.P. 12(b)(1), to dismiss this action for lack of subject matter jurisdiction. For the reasons stated herein, defendants’ motion is denied.

I. FACTS

This is an action for declaratory judgment, pursuant to 28 U.S.C. § 2201, on the validity of certain U.S. patents. The plaintiff, Electro Medical Systems, S.A. (EMS), is a corporation existing under the laws of Switzerland, with its principal place of business in Switzerland. Defendant Cooper LaserSonics, Inc. is a Delaware corporation with its principal place of business in Levittown, New York. Defendant Dentsply International, Inc. is a Delaware corporation with its principal place of business in York, Pennsylvania. Dentsply is authorized to do business in the State of Illinois and does business on behalf of Cooper LaserSonics through a sales agent, Henry Haslam, in Arlington Heights, Illinois. Venue is proper under 28 U.S.C. § 1391, and jurisdiction is proper under 28 U.S.C. § 1338.

The patents at issue are held by Cooper and involve “air-abrasive” methods and equipment for cleaning teeth. Cooper manufactures and sells this equipment under the trade name “Prophy-Jet”. Dentsply is an exclusive distributor for Cooper and of Prophy-Jet teeth cleaning equipment. EMS manufactures and sells similar teeth cleaning equipment under the trade names “Air-Flow I” and “Air-Flow II”.

Plaintiff’s claim for declaratory judgment on the validity of defendants’ patents arises out of threats of infringement litigation by Dentsply. Plaintiff also alleges that on two separate occasions representatives of Dentsply threatened suit against potential U.S. distributors of EMS products, “Air-Flow I” and “Air-Flow II”. In addition, plaintiff alleges that on three separate occasions Cooper’s predecessor in interest brought suit in foreign forums alleging infringement of foreign patents corresponding to the U.S. patents at issue.

II. DISCUSSION

The Declaratory Judgment Act, 28 U.S.C. § 2201, provides that a federal court “may declare the rights and other legal relations” of parties in “a case of actual controversy.” The Act’s “actual controversy” requirement is identical to the “case or controversy” requirement contained in Article III of the United States Constitution. This Constitutional requirement limits the exercise of federal judicial power to real and substantial controversies. Heerema Marine Contractors v. Santa Fe Intern., 582 F.Supp. 445, 448 (C.D.Cal.1984).

In applying these principles to declaratory judgment actions involving patents, this court will consider a two-prong test to assess whether this case is appropriate for judicial determination.

First, in a declaratory judgment action, the plaintiff must have a “real and reasonable apprehension that he will be subject to liability” if he commences or continues the activity in question.

Second, “the plaintiff must have actually produced the accused article or have engaged in preparations such that but for a finding that the product infringes or for extraordinary and unforeseen contingencies, the plaintiff would and could begin production immediately.” Heerema, supra; International Harvester Co. v. Deere & Co., 623 F.2d 1207, 1210 (7th Cir.1980).

A. Reasonable Apprehension

A plaintiff’s reasonable apprehension may be the product of an implied charge of infringement or of a course of conduct which would lead a reasonable man to fear he or his customers face suit or the threat of suit. International Harvester, supra, 623 F.2d at 1211. In the instant case, plaintiff has alleged that Dentsply has made threats of infringement charges against EMS customers. A suit seeking declaratory judgment is not subject to dismissal on the basis of “no reasonable apprehension” where plaintiff’s vice president attested that a principal of the licensee had informed him that plaintiff’s device infringed the patent. Ag-Tronic, Inc. v. Frank Paviour Ltd., 70 F.R.D. 393, 397 (D.Neb. 1976). In light of the affidavit of EMS’s president, in which he says that Dentsply representatives and officers have threatened suit against potential EMS distributors, the issue is whether alleged threats of infringement suits by a patentee’s licensee or exclusive distributor can form the basis for reasonable apprehension.

Dentsply and Cooper argue that the acts of a patentee’s agent charging infringement without specific authority to do so does not constitute reasonable apprehension. Ag-Tronic, supra. However, it is clear from the documents filed under seal with the Court that Dentsply is Cooper's exclusive distributor and therefore has the express authority to bring a suit for infringement. A.L. Smith Iron Co. v., Dickson, 141 F.2d 3 (2d Cir.1944).

Finally, plaintiff argues that the reasonable apprehension requirement is satisfied because the defendant Cooper and its agents brought infringement suits against EMS and its agents on the corresponding foreign patent in foreign forums. Defendants counter that Cooper’s predecessors in interest brought the foreign suits and that this conduct is not attributable to Cooper. The Court finds the defendants’ argument to be unpersuasive, where, as here, the prior suits were brought on the exact same patents at issue and the exact same EMS products at issue. Therefore, the Court finds that the existence of prior infringement suits in foreign forums based on the corresponding foreign patents and against the EMS products at issue here is a sufficient basis for reasonable apprehension of identical suits in the United States on EMS products.

B. Sufficient Involvement In Potentially Infringing Activity

Defendants argue that the plaintiff has failed to allege sufficient preparatory steps to introduce EMS products into the United States. Therefore, defendants conclude that the plaintiff has not evidenced an intent to take the immediate infringing action necessary to satisfy the case or controversy requirement in patent cases. Plaintiff counters that it manufactures and offers the alleged infringing products for sale in several foreign countries. In addition, plaintiff asserts that it agreed in 1982 with a Massachusetts company to distribute EMS products in the United States and that the distributor is awaiting the outcome of the foreign patent infringement actions before it commences distribution of EMS products.

In the present case, the plaintiff already manufactures the infringing product and offers it for sale in many foreign countries. In light of this fact and the existence of a Massachusetts distributor for EMS products in the United States, the Court finds that the plaintiff possesses an immediate ability and intent to offer the alleged infringing EMS products for sale in the United States.

III. CONCLUSION

For the reasons stated above, defendants’ motion to dismiss this action for lack of subject matter jurisdiction is denied.


author: DAVID V. O’BRIEN, District Judge.

text:
    Irmalee PETERSEN, Plaintiff, v. FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF PUERTO RICO, INC., Defendant.
    Civ. No. 1983/364.
    District Court, Virgin Islands, D. St. Croix.
    Sept. 26, 1985.

      Albert A. Sheen, Christiansted, St. Croix, V.I., for plaintiff.
    Linda L. Shelby, Birch, deJongh & Farrelly, Charlotte Amalie, St. Thomas, V.I., for defendant.
   MEMORANDUM OPINION AND ORDER

DAVID V. O’BRIEN, District Judge.

THIS MATTER is before the Court on motion of defendant First Federal Savings Bank (“First Federal”) to dismiss or, in the alternative for summary judgment. We must decide whether plaintiff’s complaint states a cause of action under the Labor Management Relations Act, 1947, 29 U.S.C. § 141 et seq., thereby vesting exclusive jurisdiction with the National Labor Relations Board, and depriving this Court of subject matter jurisdiction. First Federal also raises the issue of whether its conduct was so extreme as to constitute the tort of intentional infliction of emotional distress. As matters outside the pleadings are presented on this part of First Federal’s motion, we will treat it as a motion for summary judgment. Fed.R.Civ.P. 12(b). For the reasons herein stated we will grant First Federal’s motion in part and deny it in part.

Plaintiff Irmalee Petersen was employed by First Federal for 15 years. She served as manager of the Christiansted branch in St. Croix for nine of those years. She claims that her employment record was unblemished.

Petersen complained to First Federal that the Christiansted branch was understaffed, that an additional computer terminal was needed, and that the building needed renovations. When no measures were taken to rectify the situation, Petersen’s six employees refused to open the branch on November 18, 1981 until they could air their grievances with a First Federal officer from Puerto Rico. Upon meeting with certain First Federal officials, improvements were promised and the branch opened for business as usual the next day.

Then on December 29,1981 Petersen was summoned to First Federal in Puerto Rico for a meeting. She was informed by Irving Rodriquez, an official of First Federal, that the board of directors were requesting her immediate resignation. Whereupon a letter of resignation was typed up and signed by Petersen.

On December 2, 1983 Petersen filed her complaint against First Federal in this Court. She claims that her dismissal 1) violated the requirement of good faith and fair dealing outlined in Restatement (Second) Contracts § 205 (1981); 2) resulted in a breach of implied contract; 3) contravened the public policy stated in the Labor Management Relations Act, 1947, 29 U.S.C. § 141 et seq., and the Virgin Islands Labor Relations Law, 24 V.I.C. § 61 et seq., and 4) constituted outrageous and extreme conduct that inflicted severe emotional distress.

In its present posture before the Court, First Federal has moved to dismiss the complaint for lack of subject matter jurisdiction. First Federal claims that insofar as Petersen has stated a cause of action pursuant to §§ 7 and 8(a)(1) of the Labor Management Relations Act, 29 U.S.C. §§ 157, 158(a)(1), it is within the exclusive jurisdiction of the National Labor Relation Board. Further, Petersen’s claim for breach of implied contract is pre-empted according to First Federal. Finally, First Federal argues that its conduct cannot be classified as extreme and outrageous so as to have inflicted emotional distress.

First Federal is correct in asserting that this Court would lack subject matter jurisdiction if Petersen alleges unfair labor practices. See generally R. Gorman, Labor Law at 7-9 (1976). Petersen claims that her complaint states causes of action for breach of contract, breach of good faith and fair dealing, and outrageous conduct, not unfair labor practices!

Title 29 U.S.C. § 157 insures the rights of employees to organize and engage in concerted activities for their mutual aid and protection. Section 158(a)(1) states that an employer interfering with these rights is guilty of unfair labor practices. It is imperative to note that these provisions do not apply to supervisors. See 29 U.S.C. § 152(3) (term “employee” shall not include any individual employed as a supervisor); Beasley v. Food Fair of North Carolina, 416 U.S. 653, 94 S.Ct. 2023, 40 L.Ed.2d 443 (1973); NLRB v. Bell Aerospace Co., 416 U.S. 267, 94 S.Ct. 1757, 40 L.Ed.2d 134 (1973); Howard Johnson Co. v. NLRB, 702 F.2d 1 (1st Cir.1983); NLRB v. Yeshiva University, 582 F.2d 686 (2d Cir.1978).

Nonetheless, it is well established that an employer is guilty of unfair labor practices where the employer’s action toward a supervisor interfere with the employee’s statutorily protected rights, and where the supervisor is dismissed for refusing to participate in unfair labor practices. Howard Johnson, supra, at 4; see generally R. Gorman, Labor Law at 34-35 (1976).

Pursuant to 29 U.S.C. § 152(11):

(11) The term “supervisor” means any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

Accordingly, we find that Irmalee Petersen was a supervisor. She had the authority to direct, discipline, and fire the employees of the Christiansted branch. Deposition of Irmalee Petersen at 11-13, Sept. 28, 1984.

Having thus ruled, we must now decide whether First Federal’s dismissal of Petersen violated the employee’s rights or resulted from Petersen’s refusal to participate in unfair labor practices. It is not completely clear why Petersen was dismissed. She claims that her work record was untarnished in the 15 years that she worked for First Federal. In her deposition, she states that Irving Rodriquez reminded her of the November 18th incident before requesting her resignation. Perhaps First Federal was disappointed with her handling of the situation.

There is no evidence whatsoever that the statutorily protected rights of First Federal’s other employees were violated or that Petersen was asked to participate in unfair labor practices and refused. None of the employees were penalized for their failure to open the branch on November 18, 1981. In fact, all of the relief requested by Petersen was provided by First Federal after her dismissal.

We hold, therefore, that as a supervisor Irmalee Petersen was not protected by the Labor Management Relations Act and, exclusive jurisdiction over this cause of action is not vested in the National Labor Relations Board. Consequently, Petersen’s claims for breach of good faith and fair dealing, breach of implied contract, and for infliction of emotional distress are not preempted by federal law.

Petersen states a claim for breach of both her at-will employment contract and First Federal’s duty of good faith and fair dealing. Pursuant to Restatement (Second) of Contracts § 205 (1981) “[ejvery contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” The steady trend of case law, commentators, and statutes has been to apply this rule to employment contracts terminable at will. See, e.g., Lucas v. Brown & Root, Inc., 736 F.2d 1202 (8th Cir.1984); Bruffett v. Warner Communications, Inc., 692 F.2d 910 (3d Cir.1982) (Gibbons, J., dissenting); Smith v. Atlas Off-Shore Boat Service, Inc., 653 F.2d 1057 (5th Cir.1981); Savodnik v. Korvettes, Inc., 488 F.Supp. 822 (E.D.N.Y. 1980); Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251 (Sup. Jud.Ct.1977); Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549 (1974).

When Robinson v. Hess Oil Virgin Islands Corp., 19 V.I. 106 (D.V.I.1982), was decided the contractual theory of recovery in the area of at-will employment dismissals was novel in this jurisdiction. The Court followed a growing number of courts recognizing this theory and denied the defendant’s motion to dismiss. We follow Robinson and find that Petersen has set forth a prima facie cause of action for breach of the employer’s implied obligation of good faith and fair dealing with respect to Petersen’s employment and termination.

Finally, Petersen claims that First Federal’s conduct was so extreme and outrageous that it inflicted severe emotional distress. This legal theory is predicated on Restatement (Second) of Torts § 46(1) (1965).

In her deposition, Petersen alleged that the following facts constitute extreme and outrageous conduct. First Federal refused to comply with her demands for improvements to the Christiansted branch until after she was dismissed. Often, she was required to work late hours, until 11:30 or 12 o’clock at night, without assistance. Petersen had to walk between the Christiansted branch and another bank with large sums of money (sometimes up to $20,000). She had to use her personal car to pick up computer print out at the airport. She was not remunerated for overtime, and she could not spend time with her family.

According to the Third Circuit Court of Appeals in Moolenaar v. Atlas Motor Inns, Inc., 616 F.2d 87, 89 (3d Cir.1980), the trial court should make an initial determination whether the plaintiff has established “that the conduct complained of could reasonably be regarded as so extreme and outrageous as to permit recovery, The plaintiff must make a showing that defendant’s conduct was so outrageous that no reasonable person in a civilized society should be expected to endure it.

Taking all of Petersen’s allegations as true, we do not find that they meet the standard necessary to justify this submission of this claim to a jury. Petersen’s claim for intentional infliction of emotional distress will therefore be dismissed.

Although inartfully drawn, Petersen’s complaint states a cause of action for breach of contract, and breach of the implied covenant of good faith and fair dealing. First Federal’s motion to dismiss or for summary judgment will therefore be denied as to these claims and granted as to the intentional infliction of emotional distress claim.

      . Title 29 U.S.C. § 157 provides:
      § 157. Right of employees as to organization, collective bargaining, etc.

      Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities' for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.

      . Title 29 U.S.C. § 158(a)(1) provides:
      § 158. Unfair labor practices

      (a) It shall be an unfair labor practice for an employer—
      (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title.

      . We note that in Farmer v. United Brotherhood of Carpenters, 430 U.S. 290, 97 S.Ct. 1056, 51 L.Ed.2d 338 (1976), the Supreme Court decided that the National Labor Relations Act does not pre-empt an action for intentional infliction of emotional distress.

      . Traditionally, at-will employment contracts could be terminated by either party at any time without reason.

      . Section 46(1) provides:
      § 46. Outrageous Conduct Causing Severe Emotional Distress

      (1) One who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm.


text:
    Marvin R. SITTIG, Jr., Plaintiff, v. ILLINOIS DEPARTMENT OF CORRECTIONS, Defendant.
    No. 85 C 06154.
    United States District Court, N.D. Illinois, E.D.
    Sept. 27, 1985.

      Marvin R. Sittig, Jr., pro se.
    Neil F. Hartigan, Atty. Gen., State of Illinois by M. Frances O’Malley, Asst. Atty. Gen., Chicago, 111., for defendant.
   ORDER

BUA, District Judge.

Plaintiff, Marvin R. Sittig, a resident at the Dixon Correctional Center in Dixon, Illinois, brings this pro se civil rights complaint pursuant to 42 U.S.C. § 1983. Named as defendants are the Illinois Department of Corrections, the Sheridan Correctional Center, the Dixon Correctional Center, and Illinois Department of Corrections Director Michael P. Lane. Plaintiff seeks damages and injunctive relief for his alleged failure to receive adequate protection from attacks by other inmates. He alleges two physical assaults. The first occurred at the Sheridan Correctional Center in May 1984 and the second in the Dixon Correctional Center in December 1984. Before the Court is defendant’s motion to dismiss the complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, the Court grants the motion.

The Eleventh Amendment bars plaintiff’s claim for damages against three of the parties he names as defendants in this action. See Alabama v. Pugh, 438 U.S. 781, 98 S.Ct. 3057, 57 L.Ed.2d 1114 (1978); Garrett v. Illinois, 612 F.2d 1038, 1040 (7th Cir.), cert. denied, 449 U.S. 821, 101 S.Ct. 79, 66 L.Ed.2d 23 (1980). As agencies of the state, these entities are immune from suit because Illinois has not waived its sovereign immunity as to proceedings against it in federal court. Moreover, because state agencies are not persons within the meaning of the Civil Rights Act, the Court lacks jurisdiction over Sittig’s claims against the Illinois Department of Corrections and two of its correctional facilities. See Toledo, Peoria, & W.R. Co. v. Illinois, 744 F.2d 1296, 1298-99 (7th Cir. 1984).

Plaintiff’s claim against the individual defendant Michael P. Lane is also deficient. To the extent he seeks relief against Lane in his official capacity as Director of the Illinois Department of Corrections, his claim is again barred by the Eleventh Amendment because an official capacity suit is, in essence, a suit against the entity of which the officer is an agent. See Kentucky v. Graham, — U.S. -, 105 S.Ct. 3099, 3105, 87 L.Ed.2d 114 (1985); Owen v. Lash, 682 F.2d 648, 654 (7th Cir. 1982). To state a claim against Lane in his personal capacity, Sittig must allege facts to show that Lane caused a deprivation of constitutional rights alleged in the complaint. See Graham, 105 S.Ct. at 3106. Sittig's complaint, however, is wholly silent as to any conduct on the part of Lane. Instead, he attributes the alleged lapse of security to administrative officials at the two institutions where he has been incarcerated. Because these officials are not named as defendants in the complaint, we need not here address the adequacy of his allegations.

Accordingly, the Court grants defendant’s motion to dismiss without prejudice to Sittig’s right to file an amended complaint within 30 days. The amended complaint must name as defendants those personally involved in the alleged failure to provide Sittig with adequate security. In addition, the allegations of the amended complaint must link those defendants to the alleged attacks and explain how those defendants failed to take adequate steps to protect him from attack by other inmates. Plaintiff is directed to complete his complaint on the forms required by General Rule 47 of this Court and to present the clerk with sufficient copies to permit service on the defendants he names.


author: BARBOUR, District Judge.

text:
    Freddie RADER, Plaintiff, v. U.S. RUBBER RECLAIMING CO., INC. and Farrel Corporation Division of USM (Improperly Named as Farrel Manufacturing Company, Inc.), Defendants.
    Civ. A. No. W85-0094(B).
    United States District Court, S.D. Mississippi, W.D.
    Sept. 27, 1985.
    Varner, Parker & Sessums, David Sessums, Vicksburg, Miss., for plaintiff.
    Heber Ladner, James Holland, John B. Clark, Jackson, Miss., for defendants.
   MEMORANDUM OPINION

BARBOUR, District Judge.

The Court has before it the Motion of Defendant, U.S. Rubber Reclaiming Company, Inc., (“U.S. Rubber”) for Summary Judgment. The issue presented by U.S. Rubber’s Motion is whether workers’ compensation bars an action by an injured employee against his employer who designed the machine which allegedly injured the Plaintiff, Freddie Rader, (“Rader”).

FACTS

In September 1984, Rader, an employee of U.S. Rubber, was injured in the scope of his employment when the reclaimator which he was operating malfunctioned and emitted a large fireball which burned him. According to Rader, U.S. Rubber designed the reclaimator and is liable for the injuries he sustained as a result of the malfunction under the dual capacity doctrine.

Neither Rader nor U.S. Rubber states whether Rader has received workers’ compensation benefits as a result of his injuries. Rader does admit, however, that he was injured in the course of his employment. Accordingly, there appears to be no question that Rader is entitled to recover workers’ compensation.

U.S. Rubber moves for summary judgment on the basis that workers’ compensation is Rader’s exclusive remedy. Rader responds on the basis that the dual capacity doctrine, under which an employer assumes a role independent of his status as employer, permits recovery against U.S. Rubber despite the exclusive provisions of workers’ compensation.

LAW

There is no question that workers’ compensation is an employee’s exclusive remedy for work-related injuries. Miss. Code Ann. § 71-3-9 (1972), entitled “Exclusiveness of liability,” states that:

[t]he liability of a employer to pay compensation shall be exclusive and in place of all other liability of such employer to the employee____

The Mississippi Supreme Court has consistently rejected attempts to circumvent the exclusive remedy of workers’ compensation. See, e.g., Biggart v. Texas Eastern Transmission Corporation, 235 So.2d 443 (Miss.1970); Stubbs v. Green Brothers Gravel Company, Inc., 206 So.2d 323 (Miss.1968); Robertson v. Stroup, 180 So.2d 617 (Miss.1965). This Court is of the opinion that the Mississippi Supreme Court would likewise reject Rader’s attempt to circumvent the workers’ compensation act on the basis of the dual capacity doctrine.

The dual capacity doctrine provides that an employer may become liable in tort to an injured employee when the employer assumes an identity separate and apart from his role as employer. 2A Larson, Workmen’s Compensation Law, § 72.81. The vast majority of courts have rejected the dual capacity doctrine and have held that an employer who designs, manufactures or distributes a product used by its employees cannot be held liable to an injured employee on the theory of products liability. 2A Larson, Workmens’ Compensation Law, §§ 65.35, 72.83. Only Ohio and California have acknowledged the dual capacity doctrine. See, e.g., Duprey v. Shane, 39 Cal.2d 781, 249 P.2d 8 (1952); Mercer v. Uniroyal, 49 Ohio App.2d 279, 361 N.E.2d 492 (1977). Yet, even these states limit the applicability of the doctrine to products which are not only furnished to the employee but also sold to the public. See also 2A Larson, Workmens’ Compensation Law, § 72.83.

Rader has not alleged that U.S. Rubber sold its reclaimator to the public. Even if he did, this Court’s conclusion would be the same. As Larson states,

[ijmagine how much would remain of employer immunity if it were forfeited every time an employer adjusted or tinkered with a machine.

Id. at § 72.81. Accordingly, the Motion of U.S. Rubber for Summary Judgment is granted. A Final Judgment in accordance with this Memorandum Opinion will be entered pursuant to F.R.Civ.P. Rule 54.


author: GENE CARTER, District Judge.

text:
    LOCAL #6, INDUSTRIAL UNION OF MARINE SHIPBUILDING WORKERS OF AMERICA, AFL-CIO and Louis Stone and Milton Dudley, Plaintiffs, v. BATH IRON WORKS CORPORATION, Defendant.
    Civ. No. 85-0199-P.
    United States District Court, D. Maine.
    Sept. 27, 1985.

      Patrick McTeague, McTeague, Higbee, Libner, Reitman, MacAdam & Case, Brunswick, Maine, for plaintiffs.
    Mark L. Haley, Fitzgerald, Donovan & Conley, Bath, Maine, for defendant.
   ORDER OF REMAND

GENE CARTER, District Judge.

Plaintiff filed this action in Maine Superi- or Court alleging that

Defendant has failed, refused, and neglected to pay wages including vacation pay, sick pay, pay adjustments and other special pay situations in a timely fashion to Plaintiff Union’s members in accordance with Defendant’s obligations under Maine law and past practice.

Complaint, ¶ 4. Paragraph 3 of the Complaint states that the action was brought under 26 M.R.S.A. § 621, et seq. Defendant filed a Petition for Removal, asserting that the Complaint stated an action for breach of a collective bargaining agreement between the parties, a federal cause of action under § 301 of the Labor Relations Act, 29 U.S.C. § 185. By letter of July 1, 1985, counsel was informed that the case had been removed. Also on July 1 Defendant filed a Motion to Dismiss. Plaintiff failed to object to the motion within ten days, as prescribed by Local Rule 19(c). In accordance with that rule, on July 17, 1985, therefore, the Court granted Defendant’s motion. On July 18, 1985, Plaintiff filed a Motion to Remand as well as a Motion to Vacate the Order Granting Defendant’s Motion to Dismiss. Those motions are now before the Court.

The remand statute, 28 U.S.C. § 1447, provides: “If at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall remand the case, and may order the payment of just costs.” In this case, although Defendant’s Motion to Dismiss has been granted, a judgment of dismissal has not been entered on the docket. It is not, therefore, too late for the Court to consider the Motion for Remand.

The existence of a federal question for purposes of removal or remand must be evident from the face of the complaint at the time of the petition for removal. Gully v. First National Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936); La Chemise Lacoste v. Alligator Co., 506 F.2d 339 (3d Cir.1974). An examination of the Complaint in this case discloses no federal question. Although Plaintiff alleges that it is the collective bargaining representative of the employees of Bath Iron Works, it does not allege a collective bargaining agreement or, indeed, any agreement between the labor organization and Bath Iron Works. Section 301 of the LMRA explicitly provides relief for violation of contracts between an employer and a labor organization representing employees.

The Complaint does allege violation of Defendant’s obligations under past practice. Defendant argues that past practice is a term of art in labor and, it appears from the portion of the treatise cited to the Court that past practice is an important factor in labor management arbitration, used to aid in the construction of labor contracts. The existence of past practice, however, does not of necessity imply the existence of a contract which deals with the issue of wages.

Since no contract between the parties has been alleged which would provide the basis for federal jurisdiction under section 301, the Court must remand this action to state court. The Court’s granting of Defendant’s Motion to Dismiss was effected when the Court was without jurisdiction and is, therefore, invalid, and it is ORDERED that the Order of Dismissal be, and it is hereby, VACATED. It is FURTHER ORDERED that this case be, and it is hereby, REMANDED to the Maine Superior Court from which it was removed.

      . Counsel in this case requested oral argument but the Court deems it unnecessary to the resolution of the issues raised.


author: KANE, District Judge.

text:
    POWER MOTIVE CORPORATION, a Colorado Corporation, Plaintiff, v. MANNESMANN DEMAG CORPORATION, a Michigan corporation, Defendant.
    Civ. A. No. 85-K-13.
    United States District Court, D. Colorado.
    Sept. 28, 1985.
    Jim M. Hansen, Bradley, Campbell & Carney, Golden, Colo., for plaintiff.
    Sheryl L. Anderson, Weller, Friedrich, Hickisch, Hazlitt & Ward, Denver, Colo., for defendant.
   MEMORANDUM OPINION AND ORDER

KANE, District Judge.

Plaintiff Power Motive Corporation brings suit for damages against Mannesman Demag Corporation alleging breach of a distributorship agreement between the parties. Specifically, Power alleges that Demag wrongfully 1) terminated the parties’ agreement (Counts 1 through 6), 2) failed to repurchase Power’s inventory upon termination (Counts 7 through 9), and 3) failed to support Power’s sales efforts and by-passed Power with direct sales, (Counts 10 through 13). Power seeks compensatory and punitive damages for Demag’s alleged breach as well as for Demag’s alleged direct selling which Power contends constitutes tortious interference with prospective business advantages. Demag counterclaims for amounts allegedly owed them by Power. This court exercises jurisdiction of this case per 28 U.S.C. § 1332.

This matter is before me now on Demag’s motion for judgment on the pleadings pursuant to F.R.C.P. 12(c). Demag seeks dismissal for failure to state a claim as to the portion of Power’s complaint seeking punitive damages for the contract breach as set forth in Counts 1 and 3 through 12. Demag also seeks dismissal for failure to state a claim of the entirety of Count 2 where Power alleges that Demag’s conduct constitutes a breach of fiduciary duties implied by the parties agreement.

A judgment on the pleadings is a drastic remedy and is only granted when the movant clearly establishes that no material issues of fact remain to be resolved and that he is entitled to judgment as a matter of law. Wright and Miller, Federal Practice and Procedure § 1368. Southern Ohio Bank v. Merril Lynch, 479 F.2d 478 (6th Cir.1973). Defendant’s motion for judgment on the pleadings must be denied unless it appears to a certainty that plaintiffs are entitled to no relief under any state of facts that could be proved in support of its claim. Brown v. Bullock, 194 F.Supp. 207 (D.C.N.Y.1961), affirmed, Brown v. Bullock, 294 F.2d 415 (2nd Cir.1961). For purposes of the court’s consideration of this motion, all of the well pleaded factual allegations in the adversary’s pleadings are assumed to be true and all contravening assertions in the movant’s pleadings are taken to be false. National Metropolitan Bank v. U.S., 323 U.S. 454, 65 S.Ct. 354, 89 L.Ed. 383 (1944).

With due cognizance of the stringency of Demag’s burden in this motion, and for the reasons set forth below, Demag’s motion for judgment on the pleadings is granted.

I. PUNITIVE DAMAGES

Demag asserts that Power’s claim for punitive damages in Counts 1 and 3 through 12 should be dismissed as Ohio law precludes the award of punitive damages in contract actions. Power’s initial response is that Colorado, not Ohio law applies for breach remedies. The threshold issue before me, then, is whether Colorado or Ohio law applies to the remedies in the present case.

a. Choice of Laws

As this court is sitting in diversity, it is beyond cavil that Colorado choice of law principles must be applied in the present case. Klaxon v. Stentor Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Vandeventer v. Four Corners, 663 F.2d 1016 (10th Cir.1981).

Power characterizes the pertinent Colorado choice of law rule as follows:

Questions relating to the construction of contracts, and their validity and effect, are controlled and determined by the law of the place where they are made; but questions affecting remedies upon them are governed by the law of the place where the suit is brought.

Des Moines Life Assoc. v. Owen, 10 Colo. App. 131, 134, 50 P. 210, 211, (1897).

The decision of Wood Bros. Homes, Inc. v. Walker Adjustment Bureau, 198 Colo. 444, 601 P.2d 1369, (1979), however, effectively overrules Des Moines. In Wood Bros, the Colorado Supreme Court expressly adopted the Restatement (Second) of Conflict of Laws (1971) for contract actions. The Restatement (Second) asserts in § 207 Measure of Recovery that “The measure of recovery for a breach of contract is determined by the local law of the state selected by application of the rules of §§ 187-188.” In turn, § 187 Law of the State Chosen by the Parties holds that the forum state should apply the law chosen by the parties unless a) there is no reasonable basis for the parties choice or b) the application of the law chosen would be contrary to a fundamental policy of a state which has a materially greater interest in the issue.

Power does not allege, nor is it manifest, that the parties contractual choice of forum is inappropriate. The selection of Ohio law is reasonable as Demag’s principal place of business is in Ohio and Demag’s performance took place there. Comment F to § 187 of the Restatement (Second). Pirkey v. Hospital Corporation of America, 483 F.Supp. 770 (D.Colo.1980). Nor has it been asserted that the application of Ohio law would be in derogation of fundamental Colorado principles. Pirkey illustrates the extent to which the law chosen by the parties must be contrary to the forum state’s fundamental principles before the chosen state law may be eschewed. In Pirkey, a breach of contract action, I applied Colorado remedies law rather than that chosen by the parties, Saudi Arabia. I did so because under Saudi law the measure of damages was to be determined by a special administrative board. The Saudi procedure may be characterized as an exclusive jurisdictional remedy. Given the nature of the Saudi procedure it “bec[a]me clear that the application of Saudi Arabian law on the issue of the measure of damages raise[d] problems of fundamental due process which [were] serious enough to require the application of Colorado law.” Id. at 774. In the case at bar no fundamental Colorado principles or civil rights are in jeopardy; any variance between Colorado and Ohio law is of insufficient magnitude to justify, as in Pirkey, the imposition of Colorado law. Accordingly, through the application of the Restatement (Second), as required by Wood Bros., I hold that Ohio law will govern this dispute in its entirety.

b. Ohio Law Precludes Punitive Damages

Under Ohio law punitive damages are not recoverable in an action on a contract. Ketcham v. Miller, 104 Ohio St. 372, 136 N.E. 145 (1922); Tibbs v. National Home Construction Corp., 52 Ohio App.2d 281, 369 N.E.2d 1218 (1977); Saberton v. Greenwald, 146 Ohio St. 414, 66 N.E.2d 224 (1946).

There are exceptions to this rule, none of which, however, are applicable. One exception is illustrated by the “insurance bad faith” cases. Suver v. Personal Service Insurance Co., 11 Ohio St.3d 6, 462 N.E.2d 415 (1984); Kirk v. Safeco Insurance Co., 28 Ohio Misc. 44, 273 N.E.2d 919 (1970). Numerous jurisdictions, including Ohio, have recognized that an insurer owes special legal duties to its insured primarily because of the great disparity of bargaining power and the adhesive qualities of most insurance contracts. The special duties of an insurer are enforced by tort liability, including possible punitive damages. Battista v. Lebanon Trotting Association, 538 F.2d 111 (6th Cir.1976 — applying Ohio law.) The insurance bad faith cases, and the rationale they advance, are of no precedential value in the instant case as “the special considerations existing in a consumer-held insurance contract do not apply to an ordinary contract between businessmen.” Id. at 118. See also Tibbs, 369 N.E.2d at 1225.

The allowance of punitive damages in “extraordinary” contracts has been extended to collective bargaining agreements in Williams v. AMF Inc., 512 F.Supp. 1048 (S.D.Ohio W.D.1981); the position of labor being analagous to that of the insured in the insurance bad faith cases. No Ohio court, or federal court construing Ohio law, has determined any other types of contract, including franchise agreements, to merit the special considerations of an insurance or collective bargaining agreement.

There are a few Ohio cases where punitive damages were allowed, though the complaint sounded primarily in contract. Craig v. Spitzer Motors, 109 Ohio App. 376, 160 N.E.2d 537 (1959) and Armstrong v. Feldhaus, 87 Ohio App. 75, 93 N.E.2d 776 (1950). These cases, however, also contained separate distinct claims of tort damage, namely fraud and conversion, respectively, for which an award of punitive damages was appropriate. See also Levin v. Nielsen, 37 Ohio App.2d 29, 306 N.E.2d 173. (1973). “Simply characterizing an action as one “wilfully, wantonly, and maliciously” done adds nothing new to a cause essentially directed to securing relief for a breach of a contract.” Tibbs, 369 N.E.2d at 1225. Such being the case, Power has not pleaded any facts, even assuming their truth, which would allow it to recover punitive damages. Demag’s motion for judgment on the pleadings as to the claims for punitive damages in Counts 1 and 3 through 12 is granted.

II. FIDUCIARY DUTIES

Demag also seeks dismissal of Power’s Count 2 which asserts that Demag has breached a “fiduciary duty resulting from franchise agreement and franchise relationship.” For the purposes of this motion I take as true Power’s assertion that the parties’ distributorship agreement creates a franchise relationship. My task, therefore, is solely to determine whether as a matter of Ohio law Power has alleged any facts, taken as true, which would entitle it to relief. I hold that, as a matter of Ohio law, a franchise relationship does not give rise to fiduciary duties between the parties.

Power has cited no Ohio cases where a franchise relationship creates fiduciary obligations. Power asks this court to alter existing Ohio law to encompass a distinct minority of cases which have held that a franchise agreement does create fiduciary obligations. I decline to do this because I can not in good faith conclude that an Ohio court would depart from Ohio precedent as suggested by Power. Further, it is not the role of a U.S. District Court, sitting in diversity and interpreting state common law, to effect a dramatic shift in state law. See Bernhardt v. Polygraphic Co. of America, Inc., 350 U.S. 198, 76 S.Ct. 273, 100 L.Ed. 199 (1955) and Guaranty Trust Co. of New York v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945).

Bach v. Friden Calculating Machine Co., Inc., 155 F.2d 361 (C.A.6 1946), illustrates that while Ohio law protects the interests of a franchisee, it does not go so far as to imply fiduciary obligations in the franchisor. In Bach a long-standing franchise relationship was terminated by the franchisor after substantial expenditure by the franchisee. Bach’s expenses were incurred in reliance upon the terms and implicit permanence of the franchise relationship. The franchisee initiated an injunction action seeking to restrain the franchisor from ending the relationship. The district court held that the agreement was terminable at will. On appeal, the Sixth Circuit held:

The contract was not one terminable at the will of Friden. Certainly by its terms and all attendant circumstances, it was construed by both parties as having a large degree of permanence____ An agency or distributorship which necessitates perfecting an organization and investing capital, contemplates a measure of continuity____ It might be concluded that in these circumstances it was not, in good conscience, reasonable to deprive them [franchisees] of the opportunity of reaping the benefits for a period of an expanding business era generally expected to follow the end of the war.

Id., at 365.

Bach protects the “expectancy interest” of the franchisee by imposing upon the franchisor the obligation to act in good conscience. No Ohio court has treated a franchisee with any more protection. The reasonable expectations of a franchisee who, like Power, expends money and energy pursuant to the franchise agreement are protected by a franchisor’s obligations now imposed by law, i.e., the Uniform Commercial Code’s implied covenants of good faith (§ 1-203), commercial reasonableness (§ 2-103), and against unconscionable actions (§ 2-302). Claims based on these causes of action have been adequately pleaded by Power and are still before this court. I decline to extend these U.C.C. concepts to embody fiduciary duties in the absence of authority from the Ohio courts.

I note that my granting of Demag’s motion for judgment on the pleadings as to Power’s assertion regarding a franchisor’s fiduciary duties is not only reflective of Ohio law, but also in accord with the vast majority of state and federal jurisdictions. See, e.g., Murphy v. White Hen Pantry Co., 691 F.2d 350 (7th Cir.1982), Mobil Oil Co. v Rubenfeld, 48 A.D.2d 428, 370 N.Y.S.2d 943 (1975), affirmed 40 N.Y.S.2d 936, 390 N.Y.S.2d 57, 358 N.E.2d 882 (1976), Bain v. Champlin Petroleum, 692 F.2d 43 (8th Cir.1983) and Picture Lake Campground v. Holiday Inns, Inc., 497 F.Supp. 858 (E.D.Va.1980). Further, I am aware of the cases with which my decision is at odds. See, e.g., Carter Equipment v. John Deere, 681 F.2d 386 (5th Cir.1982) and ABA Distributors, Inc. v. Adolph Coors, 542 F.Supp. 1272 (W.D.Mo.W.D.1982).

IT IS THEREFORE ORDERED that:

Demag’s motion for judgment on the pleadings be granted in its entirety. Power’s claim for punitive damages in Counts 1 and 3 through 12 of its complaint, and all of Count 2 seeking damages for the breach of fiduciary duties are hereby dismissed for failure to state a claim upon which relief can be granted.

      . The Restatement (Second) of Conflict of Laws (1971) at § 187, Law of the State Chosen by the Parties, states in its entirety as follows:
      (1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue.
      (2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either
      (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties choice, or
      (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a material greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188 would be the state of the applicable law in the absence of an effective choice of law by the parties.
      (3) In the absence of a contrary indication of intention, the reference is to the local law of the state of the chosen law.


author: EDWARD WEINFELD, District Judge.

text:
    Julius G. COOK, Plaintiff, v. NATIONAL MARITIME UNION OF AMERICA and American Trading Transportation Co., Defendants.
    No. 84 Civ. 1378 (EW).
    United States District Court, S.D. New York.
    Sept. 30, 1985.

      Julius G. Cook, pro se.
    Phillips & Cappiello, P.C., New York City (Ned R. Phillips, New York City, of counsel), for defendant National Maritime Union of America.
    Seham, Klein & Zelman, New York City, for defendant American Trading Transp. Co.
   OPINION

EDWARD WEINFELD, District Judge.

Plaintiff, appearing pro se, brings this action for damages against his former employer, American Trading Transportation Co. (“ATTC”) for wrongful discharge and also against his union, the National Maritime Union (“NMU”) for failure to fulfill its duty of fair representation in connection with his discharge. NMU moves under Fed.R.Civ.P. 39(a)(2) to strike plaintiffs timely request for jury trial as to the duty of fair representation on the ground that such claims are not covered by the Seventh Amendment’s guarantee of trial by jury.

The legal issue raised by NMU has not been passed upon by our Court of Appeals, but the weight of authority in other Courts of Appeals is solidly against NMU’s position. Each of these cases squarely holds that where, as here, plaintiff is seeking only damages, and not other equitable relief, he is entitled to jury trial on a claim for breach of the duty of fair representation.

This position is more consistent with the nature of the claim plaintiff seeks to make. NMU analogizes claims for breach of the duty of fair representation to actions for breach of fiduciary duty, which are equitable in nature, and which are not entitled to jury trial under the Seventh Amendment. Rather than being a creature of common law or traditional equity, however, the duty of fair representation is a legal duty created by statute, for enforcement of which an action lies in the courts. In actions seeking to enforce statutory liabilities involving legal rights and remedies, the Supreme Court has said, there is a right to jury trial absent evidence of contrary congressional intent.

Accordingly, defendant NMU’s motion to strike plaintiff’s timely demand for jury trial is denied.

So ordered.

      . See Quinn v. DiGiulian, 739 F.2d 637 (D.C.Cir. 1984); Cox v. C.H. Masland & Sons, 607 F.2d 138 (5th Cir.1979); Minnis v. UAW, 531 F.2d 850 (8th Cir.1975).

      . See Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). In Vaca, the complaint sought damages for breach of the duty, and was tried to a jury. 386 U.S. at 173, 87 S.Ct. at 907. The Supreme Court reversed, on the ground that the jury had not been correctly instructed as to the applicable standard, but in no way intimated that jury trial was inappropriate.

      . Curtis v. Loether, 415 U.S. 189, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974).


text:
    UNITED SERVICES AUTOMOBILE ASSOCIATION, Plaintiff, v. John M. CREGOR, Jr. and Heidi Cregor, William McNally and Lorraine McNally, Defendants.
    No. 85 C 3260.
    United States District Court, N.D. Illinois, E.D.
    Sept. 30, 1985.

      David E. Morgans, Jacobs, Williams and Montgomery, Ltd., Chicago, for plaintiff.
    John M. Cregor, Jr., Davis, Reid & Richards, Honolulu, Hawaii, Edward J. Griffin, Defrees & Fiske, Chicago, for defendants Cregor.
   ORDER

BUA, District Judge.

Before the Court is defendants’ motion to dismiss for lack of personal jurisdiction and proper notice or, in the alternative, to transfer this case to the United States District Court for the District of Hawaii. For the reasons stated herein, defendants’ motions to dismiss and to transfer are denied.

I. FACTS

The plaintiff United Services Automobile Association (USAA) is a citizen of the State of Texas while the defendants in this action, Heidi and John Cregor, are citizens of the State of Hawaii. The plaintiff seeks a declaratory judgment by this court removing any responsibility on the plaintiff’s part for defending and indemnifying the Cregors in an underlying action brought by William and Lorraine McNally. The MeNallys, citizens of Illinois, previously brought an action against the Cregors in the Illinois courts claiming that the Cregors committed fraud and breach of contract when the Cregors sold their Wilmette, Illinois home to the MeNallys in April of 1983. USAA had issued three homeowners’ insurance policies to the Cregors between 1980, when the Cregors lived in Wilmette, and October of 1983, after they had moved to Hawaii.

After they were served in the McNally lawsuit, the Cregors tendered the defense of that lawsuit to USAA. USAA subsequently filed this declaratory judgment action.

The Cregors move to dismiss this declaratory judgment action on grounds of improper notice and lack of personal jurisdiction. In the alternative, the Cregors seek transfer of this action to the United States District Court for the District of Hawaii.

II. DISCUSSION

A. Proper Notice

Rule 4(c)(2)(C)(ii) of the Federal Rules of Civil Procedure provides the requirements for proper notice by mail. The above section states that a return envelope with prepaid postage must be enclosed with the summons and the complaint. In the present case, plaintiff apparently failed to submit the return envelope with prepaid postage. However, plaintiffs technical error was an oversight which did not greatly prejudice the defendant, if at all. Adequate notice was given and therefore this technical failure creates no basis for dismissal of the action. SCM Corporation v. Brotherhood International Corp., 316 F.Supp. 1328, 1335 (S.D.N.Y.1970).

B. Personal Jurisdiction

Chapter 110, Section 2-209 of the Illinois Revised Statutes governs personal jurisdiction under the Illinois Long-Arm Statute. It provides the following grounds for assertion of personal jurisdiction over a nonresident:

(1) The transaction of any business within this State;
(2) The commission of a tortious act within this State;
(3) The ownership, use, or possession of any real estate situated in this State;
(4) Contracting to insure any person, property or risk located within this state at the time of contracting;

Since the defendants are no longer Illinois residents, the Court must determine whether their activities fall within subsections (1) and (4) of § 2-209.

1. Transaction of Business Within Illinois

In Morton v. Environmental Land Systems, Ltd., 55 Ill.App.3d 369, 13 Ill.Dec. 79, 370 N.E.2d 1106 (1st Dist.1977), the Court found that the solicitation of a contract within the state was activity sufficient to constitute “transacting business” within Illinois. 370 N.E.2d at 1110. Certain Illinois decisions define “transacting business” as activity which invokes the benefit and protection of Illinois law. Ronco, Inc. v. Plastics, Inc., 539 F.Supp. 391, 396 (N.D.Ill. 1982). Other decisions have found personal jurisdiction where a substantial portion of the defendant’s contractual duties are to be performed within the state. Tabor & Co. v. McNall, 30 Ill.App.3d 593, 333 N.E.2d 562 (4th Dist.1975); see also First National Bank of Chicago v. Boelcskevy, 126 Ill.App.3d 271, 81 Ill.Dec. 380, 466 N.E.2d 1182, 1185 (1st Dist.1984).

In this case, the underlying contract was signed by USAA and the Cregors to insure their Illinois home while the Cregors were Illinois residents. The policy insures a piece of property located in Illinois, the defendants’ home. Furthermore, the policy would most likely be performed in Illinois. In light of these factors, the Court finds that the Cregors have transacted business in Illinois.

The defendants argue that their Illinois contacts relate only to the McNally lawsuit and not to the issue of personal jurisdiction in the instant case. The Court disagrees. This declaratory judgment action requires the Court to determine whether coverage exists to protect the Cregors in the McNally’s underlying suit. If such coverage exists, it will flow from the policy which insured the Cregors’ Wilmette, Illinois home. Consequently, if coverage exists under the policy, it will arise out of actions taken by the Cregors in relation to their Wilmette, Illinois home and the sale of it.

Furthermore, several Illinois cases have interpreted the statutory phrase “arising from” to require “only that the plaintiffs claim be one which lies in the wake of the commercial activities by which the defendant submitted to the jurisdiction of the Illinois courts.” Koplin v. Thomas, Haab & Botts, 73 Ill.App.2d 242, 253, 219 N.E.2d 646, 651 (1st Dist.1966); see also In Re Oil Spill by Amoco Cadiz, 699 F.2d 909 (7th Cir.1983). Even if the alleged wrongful acts were discovered subsequent to the sale of the Cregors’ Wilmette home, this dispute over coverage might lie in the wake of the activity involved in the ownership and sale of the home.

The defendants are correct in stating that the court cannot exercise jurisdiction over them with regard to the latter, two homeowner policies. These two policies insure a risk located within the State of Hawaii, the Cregors’ home there. In addition, at the time these latter two contracts were executed, the Cregors resided in Hawaii. The expectation of the parties is that an action concerning the Cregors’ Hawaiian home will arise in Hawaii. The benefit and protection of Hawaiian law will likely apply to any of the contractual duties regarding the Hawaiian home. Therefore, the McNally lawsuit and this declaratory judgment action are unrelated to the policies which insure the Cregors’ Hawaiian residence.

2. Due Process

Due process requires that personal jurisdiction be exerted only when it would not offend “traditional notions of fair play and substantial justice.” International Shoe v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). Under Shaffer v. Heitner, this fairness requires an assessment of the “relationship among the defendant, the forum, and the litigation.” Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683 (1977). See also Madison Consulting Group v. State of S.C., 752 F.2d 1193 (7th Cir.1985). The facts of the instant case demonstrate that a substantial relationship exists between the defendants and the forum state to satisfy due process.

First, the facts that the Cregors were residents of Illinois at the time of the first policy’s execution and that they initiated the negotiations leading to the first homeowners’ policy are strong factors in favor of personal jurisdiction. See O’Hare International Bank v. Hampton, 437 F.2d 1173, 1176-77 (7th Cir.1971) (the fact that the defendant did initiate the negotiations leading to the contract by phoning the plaintiff is support for a finding of personal jurisdiction). Second, the likely performance of the first policy in Illinois, as contemplated by both parties, is a factor constituting another meaningful contact between defendants and Illinois. Madison Consulting Group, supra, 752 F.2d at 1204. In light of these factors, the Court concludes that there exist sufficient minimum contacts between the Cregors and Illinois for the exercise of personal jurisdiction.

C. Venue

Defendants raise the issue that the Northern District of Illinois does not have proper venue over this cause of action. Venue in this case is governed by 28 U.S.C. § 1391(a) which provides:

A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in the judicial district where all plaintiffs or all defendants reside, or in which the claim arose.

Although the McNallys, co-defendants in this declaratory judgment action, reside in Illinois, the Cregors are now Hawaiian residents. Therefore, venue is to be determined by where the claim arose and not by where all defendants reside.

Under the identity approach, once personal jurisdiction exists in certain circumstances, the venue requirement is automatically satisfied. Océ-Industries, Inc. v. Coleman, 487 F.Supp. 548, 552 (N.D.Ill. 1980). In Océ-Industries, the court considered proper venue in a breach of contract action where personal jurisdiction over the defendant was based on the transaction of business in Illinois under the Illinois Long-Arm Statute. Id. The court concluded that where, as here, personal jurisdiction is premised on defendant’s transaction of business within the state and where the cause of action sued upon is one “arising from” the defendant’s transaction of business, the cause of action arose within that state for purposes of venue under 28 U.S.C. § 1391(a). In the present case, the Court finds the identity approach set forth in Océ-Industries, supra, to be legally and factually dispositive of the venue question. Therefore, since the cause of action arose in this district, venue is proper here under § 1391(a).

D. Forum Non Conveniens

The common law doctrine of forum non conveniens enables a court to decline jurisdiction over a case even though jurisdiction and venue may be proper. Adkins v. Chicago Rock Island and Pacific R.R. Co., 54 Ill.2d 511, 301 N.E.2d 729 (1973). However, the power to grant such a motion is discretionary and should be exercised “only in exceptional circumstances when it has been shown that the interests of justice require a trial in a more convenient forum.” Torres v. Walsh, 98 Ill.2d 338, 74 Ill.Dec. 880, 456 N.E.2d 601, 605 (1983). The Torres court emphasized several factors: first, whether an alternative forum is available; second, access to proof; third, access to witnesses; fourth, the ability to receive a fair trial; fifth, the congestion of the court dockets; and finally, the convenience of the parties.

The importance of these factors was reiterated recently in Walker v. Iowa Marine Repair Corp., 132 Ill.App.3d 621, 87 Ill.Dec. 807, 477 N.E.2d 1335 (1st Dist.1985), where the court stated that “unless those factors strongly favor the defendant, then the plaintiff should be allowed to exercise his choice in deciding in what forum to bring the case when venue is proper.” 87 Ill.Dec. at 813, 477 N.E.2d at 1341.

Defendants fail to show that a more convenient forum exists than Cook County. Thus, in light of the factors espoused in Torres, transfer is denied by this Court. In the present case, the McNallys are Illinois residents and have no contact with Hawaii sufficient to permit personal jurisdiction over them in that state. Additionally, the homeowner policy which insures the Wilmette home relates wholly to Cook County and no other county or state.

Regarding access to proof and witnesses, Illinois is the only forum. The witnesses, if any, are likely to reside in Illinois, where the contract was executed and where it will likely be performed. The only potential witnesses residing outside of this forum are the Cregors, who as parties are subject to this Court’s subpoena power. The fourth and fifth factors regarding a fair trial and docket congestion do not warrant serious discussion in this case.

Lastly, although it may be inconvenient to the Cregors to defend this action in Illinois, this factor alone cannot be determinative. All other aspects of this suit are directly connected with Illinois. The facts in this case do not present an exceptional circumstance which would lead the court to deny jurisdiction over this case under the doctrine of forum non conveniens.

The court also declines the defendants’ invitation to transfer this case under 28 U.S.C. § 1404. 28 U.S.C. § 1404(a) governs change of venue and provides in pertinent part:

(a) For the convenience of parties arid witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.

The party wishing to transfer under § 1404(a) must establish “(1) that venue is proper in the transferor district; (2) that the transferor court has the power to transfer the case; and (3) that the transfer is for the ‘convenience of the parties and witnesses in the interest of justice.’ ” Hotel Constructors, Inc. v. Seagrave Corp., 543 F.Supp. 1048, 1050 (N.D.Ill.1982). For the reasons stated in its forum non conveniens analysis, the Court finds that the defendants have failed to show a “clear balance of inconvenience” in this district over the transferee district. Id.

III. CONCLUSION

For the reasons stated above, defendants’ motions to dismiss and to transfer are denied.

IT IS SO ORDERED.