Opinion
IP 00-436-C-T/G
July 29, 2002
ENTRY ON DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS
This Entry is a matter of public record and is being made available to the public on the court's web site, but it is not intended for commercial publication either electronically or in paper form. Although the ruling or rulings in this Entry will govern the case presently before this court, this court does not consider the discussion to be sufficiently novel or instructive to justify commercial publication of the Entry or the subsequent citation of it in other proceedings.
Defendant, Indiana University Medical Genetics Services, Inc., filed a Motion for Judgment on the Pleadings. Plaintiff opposes the Motion. This court now DENIES Defendant's Motion.
I. Factual and Procedural Background
Plaintiff, Merrill D. Benson, was a professor employed by Indiana University School of Medicine, Chairman of the Department of Medical and Molecular Genetics, and a member of the Indiana University Medical Genetics Services, Inc. Benson contends that after an internal department evaluation lead by Robert W. Holden, it was recommended that Benson resign. According to Benson, he resigned his position as Chairman and agreed not to exercise his due process rights based on Holden's agreement that Benson would retain his primary appointment as a professor of medical and molecular genetics, his membership in the Genetics Services, and his base salary. Sometime thereafter, Benson contends that his primary appointment was changed, his resignation was modified to an expulsion, his membership in Genetics Services was terminated, and his salary base was decreased.
Benson then brought this lawsuit alleging violations of his due process rights pursuant to 42 U.S.C. § 1983, breach of contract, constructive fraud, defamation, and breach of the implied covenant of good faith and fair dealing. Defendant Indiana University Medical Genetics Services, Inc. filed this Motion for Judgment on the Pleadings. Plaintiff opposes the Motion. The court now rules as follows.
II. Standard
As previously noted by Judge Barker of this court,
[t]he standard the Court is required to apply when evaluating a motion for judgment on the pleadings is often a point of confusion in many civil cases. The conundrum appears in deciding whether to apply the standard for passing on a Rule 12(b)(6) or a Rule 56 motion. The Seventh Circuit Court of Appeals stated in U.S. v. Wood, 925 F.2d 1580 (7th Cir. 1991), that a motion for judgment on the pleadings should be analyzed according to the same standard as a motion to dismiss. However, in Alexander v. City of Chicago, 994 F.2d 333 (7th Cir. 1993), the Seventh Circuit held that the summary judgment standard was appropriate when the motion is used to dispose of the substantive merits of the case and not procedural defects as in a Rule 12(b) motion. The Alexander Court stated that the case cited in Wood limited the use of the Rule 12(b)(6) standard to circumstances in which the moving party "specifically asserted 12(b) defenses." Furthermore, if the court considers matters outside the pleadings, the motion must be viewed as one for summary judgment.
West v. Phillips, 883 F. Supp. 308, 313 n. 1 (S.D.Ind. 1994) (citations omitted). Therefore, the general standard for 12(c) motions is that court takes "all well-pleaded allegations in the plaintiffs' pleadings to be true," and views "the facts and inferences to be drawn from those allegations in the light most favorable to the plaintiffs." Alexander v. City of Chicago, 994 F.2d 333, 336 (7th Cir. 1993).
However, because in this case, both parties appear to be asserting a 12(b) defense and use 12(b)(6) language, the court will evaluate the motion with that standard. A party may, through the vehicle of a Rule 12(c) motion for judgment on the pleadings, raise many of the defenses contained in Rule 12(b), including a failure to state a claim on which relief can be granted under Rule 12(b)(6). Republic Steel Corp. v. Pa. Eng'g Corp., 785 F.2d 174, 182 (7th Cir. 1986). Thus, a motion for judgment on the pleadings is subject to the same standard as a motion to dismiss for failure to state a claim, and "the motion should not be granted unless it appears beyond a doubt that the plaintiff cannot prove any facts that would support his claim for relief." Thomason v. Nachtrieb, 888 F.2d 1202, 1204 (7th Cir. 1989) (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). In evaluating a motion for judgment on the pleadings, "[t]he district court may not look beyond the pleadings, and all uncontested allegations to which the parties had the opportunity to respond are taken as true." United States v. Wood, 925 F.2d 1580, 1581 (7th Cir. 1991); Thomason, 888 F.2d at 1204. Most importantly, "[i]n considering this motion the court must view the facts in the light most favorable to the nonmovant." Thomason, 888 F.2d at 1204; Nat'l Fid. Life Ins. Co. v. Karaganis, 811 F.2d 357, 358 (7th Cir. 1987).
In any event, the result of the proceedings would be the same whatever standard is used.
III. Discussion
Defendant, Indiana University Medical Genetics Services, Inc., first contends that it is immune from suit in federal court pursuant to the Eleventh Amendment, which reads "[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." Defendant contends that it is part of a state university, based on paragraph twenty-three of the complaint, and therefore, it falls under the protection of the Eleventh Amendment.
Plaintiff responds that Defendant is not the alter ego of the State of Indiana, and that, in any event, Defendant has failed to meet its burden at the 12(c) stage of the proceedings. Specifically, Plaintiff notes that Defendant has relied on one statement in Plaintiff's pleadings to establish its role as a state actor and contends that Defendant denied its status as a state actor in the answer to the complaint.
Plaintiff also contends that the Defendant claims that "it is unaware of the type of claims Dr. Benson has alleged." (Plt.'s Resp. at 7.) It does not appear that Defendant argues this and, in any event, the pleadings are sufficient to provide Defendant with notice of Plaintiff's claims.
In its Reply, Defendant claims that:
Benson contends that the Court should ignore his own allegations and asserts that Genetics Services is not part of the state, but a private entity not protected by immunity under the Eleventh Amendment. In doing so, Benson finds himself between the proverbial rock and a hard place. He cannot have it both ways.
(Def.'s Reply at 1.) Defendant then argues that either it is a state actor and is entitled to Eleventh Amendment immunity or it is not, and cannot be liable under § 1983 because there is no "state action." Furthermore, Defendant contends that the state law claims are barred because "Benson has not alleged any facts showing that Genetics Services took any action against him." (Id. at 2.) "There are no allegations about any wrongful act by Genetics Services." (Id.)
In his Surreply, Plaintiff discusses the pleading requirements and contends that "`notice pleading' allows Dr. Benson to assert contradictory allegations concerning whether Genetics Services is a part of Indiana University or an independent private corporation." (Plt.'s Surreply at 2-3.) Furthermore, Plaintiff contends that Defendant is liable for the state law claims because it is liable for Holden's acts or omissions and it is liable because it was the final policymaker and took no action with respect to Plaintiff. (Id. at 4-5.)
As a preliminary matter, Plaintiff is correct that he is entitled to plead inconsistent theories (at least at this stage of the proceedings). However, if neither theory yields a recovery then judgment on the pleading would still be appropriate. In this case, Defendant contends that Plaintiff cannot prevail because either it is a state actor and subject to immunity under the Eleventh Amendment, or it is not a state actor and there is no "state action" as is required under § 1983.
Although Defendant's theory is correct, the Motion for Judgment on the Pleadings must be denied as to the § 1983 claim because Defendant misunderstands the "state action" requirement under § 1983. It is not necessary for a Defendant to be a state actor in order for there to be state action as is required for § 1983.
Blum v. Yaretsky, 457 U.S. 991, 1002 (1982), teaches that state action may be found in private conduct where: (1) "there is a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the state itself"; (2) the State "has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the State"; or (3) "the private entity has exercised powers that are traditionally the exclusive prerogative of the State." Blum, 457 U.S. at 1004-05 (internal quotation marks and citations omitted). In this case, Defendant has not established that it is a state actor for purposes of the Eleventh Amendment and, construing the pleadings in favor of the Plaintiff, it could be shown that Defendant worked closely with, acted in concert with, or was controlled by Indiana University, thus satisfying the state action requirement of § 1983.
Even if Defendant had shown that it was a state actor, it is not guaranteed that it would be subject to immunity under the Eleventh Amendment. In Ex Parte Young, 209 U.S. 123 (1908), the Supreme Court established an exception to the Eleventh Amendment. Under Young, "a private party can sue a state officer in his or her official capacity to enjoin prospective action that would violate federal law." Dean Foods Co. v. Brancel, 187 F.3d 609, 613 (7th Cir. 1999). However, because neither party discussed the applicability of an exception to the Eleventh Amendment and, at this point, there has been insufficient evidence to show Defendant is a state actor, this court will refrain from ruling on this issue.
As to the state law claims, Defendant's motion must also be denied. Assuming that Defendant is not a state actor and therefore not subject to the Eleventh Amendment, Plaintiff may prevail if he can establish Defendant is liable for breach of contract, constructive fraud, defamation, or breach of the implied covenant of good faith and fair dealing. Defendant contends that there are no facts establishing that Genetics Services took any action against Plaintiff. However, Plaintiff contends that Defendant is liable for the acts and omissions of Holden under an agency theory and that Defendant had a duty to perform the specific duties mandated by its bylaws. Under the liberal notice pleading standard, Plaintiff is entitled to not only his allegations, but all facts that are not inconsistent with the pleadings. Because there are facts that Plaintiff could prove to support his claim for relief, Defendant's Motion for Judgment on the Pleadings must be denied.
Defendant also attaches a copy of it Bylaws in an attempt to show that the loss of Benson's membership in the Genetics Services was automatic once he was no longer a professor of medical and molecular genetics. Although generally a 12(c) motion is for judgment on the pleadings and no outside documents are entitled to be considered, the Defendant did locate authority which allowed an agreement which was referred to extensively in the complaint to be considered as a pleading for the purpose of a 12(b)(6) motion. See Wright v. Ass'n Ins., 29 F.3d 1244, 1248 (7th Cir. 1994). This court can see no reason to depart from this authority for the purposes of a 12(c) motion.
The bylaws submitted by the Defendant state that any person who ceases to be a member of the faculty with primary appointment in the "Department" will automatically cease to be a member of Genetics Services. Defendant claims that this shows that it took no action with respect to Plaintiff. There are two problems with this theory. First, it is unclear what exactly the "Department" is and therefore, Defendant has not shown that Plaintiff was not a faculty member with primary appointment to the Department. Second, there are other bylaws which require procedures for termination of membership and which may be applicable in this case depending on the common practice of Genetics Services. At this stage of the proceedings, judgment for the Defendant is inappropriate. However, Plaintiff will have to present more evidence in support of his contention of Genetics Services' liability in order to survive the summary judgment stage of the proceedings.
IV. Conclusion
For the foregoing reasons, Defendant's Motion for Judgment on the Pleadings is DENIED. The discovery stay in effect pending this ruling is hereby lifted.
ALL OF WHICH IS ORDERED this 29th day of July 2002.