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Pena v. International Union of Operating Engineers

July 21, 2009


The opinion of the court was delivered by: Wayne R. Andersen United States District Court

Wayne R. Andersen District Judge


This case is before the court on the motion of Defendants International Union of Operating Engineers, Local 150, AFL-CIO ("Local 150"), Midwest Operating Engineers Pension Trust Fund ("Pension Fund"), Midwest Operating Engineers Welfare Fund ("Welfare Fund"), Steve Cisco ("Cisco"), Colin M. Darling ("Darling"), and Charles August ("August"), and other unidentified but known participants (collectively "Defendants") to dismiss Plaintiff's claims pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, Plaintiff's federal claim against Defendants is dismissed, and the remaining state law claim is remanded to state court.


On July 24, 2008, Peter Pena, Jr. and Daniel Pena filed a two-count complaint against the all Defendants. In the first count of their Complaint, Plaintiffs allege a Racketeer Influence Corruption Organization Act (RICO) claim pursuant to 18 U.S.C. § 1961(1) against all Defendants. Cmplt. ¶¶ 1-61. In the second count of the Complaint, Plaintiffs allege that Defendants breached their fiduciary duty of loyalty owed by virtue of their position as Plaintiffs' bargaining representatives. Cmplt ¶¶ 47-52. In this case, the Plaintiffs were employed by A & C Landscaping (A & C), which provides excavating services using heavy machinery and equipment. Cmplt. ¶ 17. Both Plaintiffs were employed as heavy equipment operators and became members of Local 150 on or about May 14, 2003. Cmplt. ¶¶ 15, 16, 20.

On or about April 11, 2005, representatives of Defendant Local 150 allegedly discovered that A & C had been mischaracterizing the work the Plaintiffs performed in order to pay them the lower wages outlined by the Heavy and Highway and Underground Collective Bargaining Agreement ("CBA"). Cmplt. ¶ 21. Local 150, Pension Fund, and Welfare Fund retained an accounting firm to audit A & C's books and records to determine the amounts of wages, which may have been due to the Plaintiffs. Cmplt. ¶¶ 22, 23. The initial audit report stated that A & C underpaid $110,546.46 in wages, and $52,740.38 in fringe benefits over an undisclosed period. Cmplt. ¶¶ 24, 25. Local 150 filed grievances on behalf of the Penas over A & C's failure to pay these amounts pursuant to the CBA. Cmplt. ¶ 26. At some point prior to the hearing on these grievances, an amended audit report was issued that showed A & C only owed $27,637.87 in wages and $8,865.29 in fringe benefits. Cmplt. ¶¶ 41, 42.

These grievances were ultimately submitted to the Joint Grievance Committee ("JGC") in late 2005 or early 2006. Cmplt. ¶¶ 29, 30. The JGC was composed of eight individuals, with Defendants Cisco, Darling, and August representing Local 150. Cmplt. 31-34. The grievance progressed to decision before the full grievance board in late 2005 or 2006, which ended in a deadlock. Cmplt. ¶ 43. After the JGC deadlocked, Defendant Cisco negotiated a settlement with A & C. Cmplt. ¶¶ 43, 44. Plaintiffs allege the reason for the settlement was an elaborate kickback scheme involving Defendants Local 150, Cisco, Darling, and August. Cmplt. ¶¶ 33-45. Plaintiffs allege that they became aware of this scheme and then filed the instant two-count Complaint. Cmplt ¶ 46.

Defendants each filed separate motions to dismiss the federal claims against them. We now turn to those motions.

Legal Standard

In order to survive a motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual material, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. ____, 129 S.Ct. 1937, 1940 (2009)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "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." Iqbal, 129 S.Ct. at 1940 (citing Twombly, 550 U.S. at 556). The complaint must be construed in a light favorable to the plaintiff and the court must accept all material facts alleged in the complaint as true. Jackson v. E.J Branch Corp., 176 F.3d 971, 978 (7th Cir. 1999). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of a cause of action, supported by mere conclusory statements do not suffice." Iqbal, 129 S.Ct. at 1940 (citing Twombly, 550 U.S. at 555).

Additionally, a complaint must describe the claim with sufficient detail as to "give the defendants fair notice of what the.claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). However, a complaint does not need to set forth all relevant facts or recite the law. Rather, all that is required is "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a); see also Doherty v. City of Chicago, 75 F.3d 318, 322 (7th Cir. 1996).

A plaintiff's "obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 127 S.Ct. at 1964-65. Although the pleading requirements under Fed. R. Civ. P. 8 are minimal, a plaintiff can plead himself out of court by including factual allegations that show his legal rights were not invaded. Pugel v. University of Illinois, 378 F.3d 659, 667 (7th Cir. 2004).


In separately filed motions, the Defendants move to dismiss the RICO claim asserted against them on the grounds that the Complaint does not adequately allege the elements of a RICO claim. The elements of a RICO violation consist of (1) conduct; (2) of an enterprise; (3) through a pattern; (4) racketeering activity. Richmond v. Nationwide Cassel L.P., 52 F.3d 640, 644 (7th Cir. 1998). It is not enough for a plaintiff simply to allege these elements in boilerplate fashion; instead, a ...

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