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French v. Beatrice Foods

decided: August 8, 1988.

PAUL L. FRENCH, PLAINTIFF-APPELLANT,
v.
BEATRICE FOODS, CO., DEFENDANT-APPELLEE



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 87 C 861--Harry D. Leinenweber, Judge.

Richard D. Cudahy, Kenneth F. Ripple, and Michael A. Kanne, Circuit Judges.

Author: Kanne

Michael A. KANNE, Circuit Judge.

Appellant, Paul L. French filed an action for retaliatory discharge in the Northern District of Illinois against his former employer, Beatrice Foods Co.--the appellee. French relied on diversity of citizenship as a basis for jurisdiction in the district court. Beatrice filed a motion to dismiss the complaint arguing that the substantive law of Alabama, which was the appropriate law to apply in this action, did not recognize an action for retaliatory discharge. The district court agreed that under Illinois conflict of law principles, Alabama's substantive law should be applied to this action. Finding that Alabama does not recognize the tort of retaliatory discharge the district court dismissed French's suit for failure to state a claim. We affirm.

In his complaint, French alleged that he was hired by Beatrice in 1957 and began a successful career in management. Eventually, in 1978, due to his exemplary performance, French was promoted to the position of general manager at a dairy plant in Gadsen, Alabama.

During the course of French's tenure in Alabama, his plant was audited. French alleged that as a result of his cooperation with the auditors, the auditors discovered that Beatrice was attempting to circumvent a 1972 consent decree prohibiting it from engaging in anticompetitive behavior. Consequently, French alleged that his relationship with Beatrice began to deteriorate.

According to the allegations of French's complaint, he was placed on special assignment by the Eastern Dairy Region President on February 1, 1982. Although it is not entirely clear from the complaint, this apparently occurred in Alabama where French resided and where his dairy plant was located.

On February 4, 1982, at a meeting which took place at Beatrice's Chicago world headquarters, the president of the Dairy Division advised French that "I would be less than candid with you if I told you that there would be another position for you." Nevertheless, French avers that he continued to be employed by Beatrice, at the Alabama plant, until April 30, 1982, at which time his employment was terminated. French then sued Beatrice claiming he was wrongfully discharged in retaliation for his assistance in the audit of his plant which revealed Beatrice's alleged violation of the consent decree.

French alleged that because Beatrice had world headquarters in Illinois and it was a resident of both Illinois and Delaware, and because he was a resident of Virginia, at the time the suit was filed, the parties' citizenship was diverse and the Illinois district court had subject matter jurisdiction.

In response, Beatrice filed a motion to dismiss arguing that although the district court in Illinois had jurisdiction, the court was required to apply the substantive tort law of Alabama as the majority of events described in the complaint occurred in Alabama. Since Alabama law did not recognize the tort of retaliatory discharge, French had failed to state a claim.

French responded by arguing that the place of the last event causing his injury (in this case, the loss of his job) controlled which state's laws should be applied. French contended that this last event occurred at the Chicago offices on February 4, 1982, when he was told there would be no other position for him. Thus, the event leading to his discharge occurred in Illinois and Illinois law, which recognizes the tort of retaliatory discharge, applied.

Beatrice, on the other hand, pointed to French's complaint in which he alleged that every activity leading to his discharge, with the exception of the February 4th meeting, took place in Alabama. Moreover, French was not actually terminated until April 30, 1982, more than two months after his conversation at the Chicago headquarters. Thus, the last event, resulting in his injury, occurred in Alabama and consequently, Beatrice argued, Alabama law was controlling.

The district court agreed with Beatrice. Noting that it was required to adhere to the conflict of laws provisions of the forum state, in this case, Illinois, the court applied a "significant contacts" test in determining which state's laws controlled this action. The court found that the most significant contacts were in Alabama despite the fact that Beatrice was headquartered in Illinois. Finding that Alabama does not recognize the tort of retaliatory discharge, the court granted Beatrice's motion to dismiss.

On appeal, French argues the district court was required to accept all of the allegations of his complaint as true for purposes of deciding the motion to dismiss. French contends that because he never alleged he was fired in Alabama or that his employment relationship with Beatrice was centered in Alabama, the court must have relied on Beatrice's characterization of the facts in reaching these conclusions. He argues that only by making findings contrary to the complaint was the district court able to dismiss plaintiff's action. Additionally, French submits that the actual event ...


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