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Cook-Illinois Corporation, Alpha School Bus Company, Inc., Richlee v. Teamsters Local No. 777 and James Glimco

May 10, 2012

COOK-ILLINOIS CORPORATION, ALPHA SCHOOL BUS COMPANY, INC., RICHLEE VANS, INC., ILLINOIS SCHOOL BUS, INC., AND GRAND PRAIRIE TRANSIT, INC., PLAINTIFFS,
v.
TEAMSTERS LOCAL NO. 777 AND JAMES GLIMCO, DEFENDANTS.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge:

MEMORANDUM OPINION AND ORDER

Plaintiffs Cook-Illinois Corporation ("Cook-Illinois"), Alpha School Bus Company, Inc. ("Alpha"), Richlee Vans, Inc. ("Richlee Vans"), Illinois School Bus, Inc. ("ISB"), and Grand Prairie Transit, Inc. ("Grand Prairie") (collectively, "Plaintiffs") allege that Defendants Teamsters Local No. 777 ("Teamsters") and James Glimco ("Glimco") (collectively, "Defendants") have "conspired to commit extortionate activities against Plaintiffs in the guise of a labor organizing campaign" and have "tortiously interfered with and defamed Plaintiffs' businesses." (R. 1, Compl. ¶ 1.) Plaintiffs assert four separate civil claims under the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq., as well as state law claims for tortious interference with contract and/or prospective advantage and business defamation. Before the Court is Defendants' motion to dismiss the Complaint for failure to state a claim under Federal Rule of Civil Procedure ("Rule") 12(b)(6). For the following reasons, the Court grants Defendants' motion and dismisses the Complaint without prejudice.

BACKGROUND*fn1

Plaintiffs, all Illinois corporations, contract with school districts throughout the Northern District of Illinois to provide school bus transportation for children. (R. 1, Compl. ¶¶ 2, 8.) Cook-Illinois is the parent corporation of Alpha, Richlee Vans, ISB, and Grand Prairie. (Id. ¶ 3.) Teamsters is an unincorporated labor association with its principal place of business in Lyons, Illinois. (Id. ¶ 4.) Glimco is the president of Teamsters. (Id. ¶ 5.)

For several years, Plaintiffs have had exclusive contracts to provide school bus services to certain school districts. Richlee Vans, for example, has been the exclusive provider of school bus services for West Aurora School District 129 ("District 129") since 2007 and for East Aurora School District 131 ("District 131") for the past 15 years. (Id. ¶¶ 9-10.) Grand Prairie has been the exclusive provider of school bus services for Mount Prospect Public School District 57 ("District 57") since 2010, and ISB and Alpha have served as the exclusive providers of such services for Community High School District 218 ("District 218") since 1990. (Id. ¶¶ 11-12.) Several of these contracts require that Plaintiffs' school buses meet certain safety specifications and that Plaintiffs pay their drivers a certain minimum compensation. (Id. ¶¶ 13, 15.) Plaintiffs are in compliance with both requirements. (Id. ¶¶ 14, 16.)

Throughout the past five years, Defendants have attempted to organize Plaintiffs' employees and Plaintiffs' sister companies' employees. (Id. ¶ 17.) Although Defendants were successful with respect to Plaintiffs' sister companies' employees, Defendants have not yet gained recognition from Plaintiffs' employees. (Id. ¶¶ 17-18.)

In October of 2011, Glimco sent a letter to Alpha's employees, falsely stating that Alpha shorted their paychecks, in violation of its contract with School District 218, and that it assigned drivers and children to unsafe school buses. (Id. ¶ 19.) Defendants' agents attended a District 129 school board meeting on October 3, 2011, where they falsely told members of the board that Richlee Vans' school buses were older than allowed, unsafe, and lacked the required bus aides. (Id. ¶ 20.) That same day, Defendants issued a press release regarding the District 129 school board meeting and posted it on several websites, including Teamsters' website. (Id. ¶ 21.) The press release contained false statements about Richlee Vans, including that it "has collectively robbed its Aurora workers of $719,000 in wages it was required to pay under its contract," "has underpaid workers despite its contractual obligations," and has "forced [workers] to drive dilapidated buses." (Id. ¶ 21.) Defendants also falsely stated in the press release that Richlee Vans' drivers must ask for basic items that are guaranteed in the contract with District 129. (Id.)

On October 5, 2011, Defendants, acting as the "Cook Action Network," published letters on Teamsters' website in which they falsely asserted that Richlee Vans underpaid its workers in violation of its contract with District 129, utilized overage school buses in violation of the same contract, utilized school buses that were in disrepair and unsafe, and threatened and intimidated its drivers. (Id. ¶ 22.) On the same day, Defendants also published letters on Teamsters' website, falsely stating that Grand Prairie violated its contract with District 57 by failing to pay required wages and benefits to its drivers and that Grand Prairie threatened and intimidated its drivers. (Id. ¶ 23.)

On October 24, 2011, Defendants met with John Byrne, the Superintendent of District 218, and told him that Alpha and ISB school buses were unsafe, failed inspections, and failed to comply with the District 218 contract. (Id. ¶ 24.) Defendants also told Mr. Byrne that Alpha was double-billing District 218 and engaging in unfair labor practices. (Id.) The following month, on November 21, 2011, Defendants distributed to Plaintiffs' employees copies of a newsletter in which they falsely stated that 1) Alpha's buses were unsafe and that it was in violation of its contract with District 218; 2) Richlee Vans underpaid its drivers "in violation of the school contract with District 129 to the tune of $700,000"; and 3) the District 129 school board has a pending legal action against Richlee Vans for violations of their contract. (Id. ¶ 25.)

LEGAL STANDARD

"A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted." Hallinan v. Fraternal Order of Police of Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." AnchorBank, 649 F.3d at 614 (internal quotation and citation omitted). Pursuant to Rule 8(a)(2), a complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The complaint must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957)).

"In evaluating the sufficiency of the complaint, [courts] view it in the light most favorable to the plaintiff, taking as true all well-pleaded factual allegations and making all possible inferences from the allegations in the plaintiff's favor." AnchorBank, 649 F.3d at 614.

"To survive a motion to dismiss, the complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face . . . . 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." Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 934-35 (7th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (internal quotation marks omitted)). "The complaint 'must actually suggest that the plaintiff has a right to relief, by providing allegations that raise a right to relief above the speculative level.'" Id. at 935 (citing Windy City Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Servs., 536 F.3d 663, 668 (7th Cir. 2008)). "[A] plaintiff's claim need not be probable, only plausible: 'a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.'" Id. (citing Twombly, 550 U.S. at 556 (internal quotation omitted)). "To meet this plausibility standard, the complaint must supply 'enough fact[s] to raise a reasonable expectation that discovery will reveal evidence' supporting the plaintiff's allegations." Id. (citing Twombly, 550 U.S. at 556).

ANALYSIS

Plaintiffs assert six counts in their Complaint: violation of 18 U.S.C. § 1962(d) by conspiring to violate § 1962(a) (Count I); violation of 18 U.S.C. § 1962(d) by conspiring to violate § 1962(b) (Count II); violation of 18 U.S.C. § 1962(d) by conspiring to violate § 1962(c) (Count III); violation of 18 U.S.C. § 1962(c) (Count IV); tortious interference with contract and/or prospective advantage (Count V); and business defamation (Count VI). Subject ...


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