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National Railroad Passenger Corp. v. Veolia Transportation Services

January 8, 2009

NATIONAL RAILROAD PASSENGER CORPORATION, PLAINTIFF,
v.
VEOLIA TRANSPORTATION SERVICES, INC., ET AL., DEFENDANTS



The opinion of the court was delivered by: Reggie B. Walton United States District Judge

MEMORANDUM OPINION

The plaintiff, National Railroad Passenger Corporation ("Amtrak"), filed this action for damages in this Court on July 16, 2007, against Veolia Transportation Services, Inc. and Veolia Transportation Inc. (collectively "the defendants" or "Veolia"), asserting claims of aiding and abetting the breach of a fiduciary duty, Complaint ("Compl.") ¶¶ 53-59, and tortious interference with an economic advantage, id. ¶¶ 60-66.*fn1 Currently before the Court is the Defendants' Motion to Dismiss for Failure to State a Claim Upon Which Relief May be Granted pursuant to Federal Rule Civil Procedure 12(b)(6).*fn2 For the reasons set forth below, the defendants' motion is denied.

I. Background

Both "Amtrak and . . . Veolia are providers of transportation services, including operations services and commuter rail systems." Compl. ¶ 6. Amtrak's complaint alleges that Veolia wrongfully recruited and enticed key members of Amtrak's staff to terminate their employment to take positions with Veolia, id. ¶¶ 21-23, causing Amtrak to suffer an economic loss, id. ¶ 66.

The parties dispute arose against the following backdrop. "On or about October 3, 2006, the South Florida Regional Transportation Authority ("SFRTA") issued Request for Proposal No. 06-112 ("the Operations RFP"), which sought a contract to provide Operator Services for SFRTA's Tri-Rail Commuter Rail System in Florida ("the Operations Contract")." Id. ¶ 9. "The Operations RFP requested proposals to provide operations service for the Tri-Rail system's 48 weekday, 16 Saturday, and 14 Sunday and Holiday revenue trains." Id. ¶ 11. "The term of the agreement [between a successful bidder/contractor and the SFRTA] was to be [for] seven years with [a] one three-year option period." Id. Proposals for the Operations Contract were due on or before January 11, 2007. Id. ¶ 12. The requirements needed for a successful bid included, inter alia, the composition of a "'Key Management Team'" that would be charged with implementing and managing the services to be provided. Id. ¶ 13. The Operations RFP required each bidder to list the actual names of the members of the key management team and what their responsibilities would include. Id. "The Operations RFP set forth strict requirements concerning the qualifications of the Key Management Team Members." Id. ¶ 14. Amtrak and Veolia were the only two companies that submitted proposals by the January 11, 2007 deadline. Id. ¶ 17.

Veolia's proposal identified General Manager Sidney N. Birckett, a former Amtrak employee for thirty years, as the head of its Key Management Team. Id. ¶ 18. Due to the limited pool of rail transportation managers with the stringent qualifications demanded by the SFRTA's Operations RFP and the fact that many of the individuals with the qualifications were already employed on other projects, Amtrak alleges that Veolia lacked the necessary personnel to further staff the Key Management Team. Id. ¶ 19. Thus, Amtrak asserts that Veolia "was at risk of being unable to submit a qualifying proposal to [the] SFRTA." Id. Amtrak contends that "[to] overcome this substantial obstacle, . . . [Birckett, after he became a Veolia employee,] set about to recruit Veolia's proposed Key Management Team from among the ranks of Birckett's former colleagues at Amtrak." Id. ¶ 20. And, unbeknownst to Amtrak, Veolia purportedly proceeded to identify and solicit senior Amtrak operations personnel who were highly skilled in the requisite SFRTA Operations RFP requirements. Id. ¶ 21. Amtrak alleges that in order to induce the solicited Amtrak employees to abandon Amtrak and sign on with Veolia, the employees were promised favorable terms and key management positions if Veolia's bid was selected. Id. Amtrak asserts that "[a]t the same time, and in exchange for the benefits that Veolia offered these Amtrak employees, Veolia demanded that they agree not to allow Amtrak to list them as members of Amtrak's proposed Key Management Team." Id. Veolia successfully solicited the services of "(1) Douglas Stencil, Veolia's proposed Safety and Training Manger; (2) Victor Salemme, Veolia's proposed Superintendent of Transportation; and (3) Gary Mauck, Veolia's proposed Communications Manager,"*fn3 who, according to Amtrak, were all Amtrak employees when the solicitations were initiated. Id. ¶ 22.*fn4 "Veolia boasted that the members of its proposed Key Management Team possessed a combined 130 years of railroad experience" and Amtrak asserts that "approximately 110 of those years were with Amtrak." Id. ¶ 28. "Similarly, Veolia stressed that its team members had 'built their reputations on delivering the best,' and had 'worked together before and ha[d] already established solid working relationships with one another.'" Id. ¶ 29. Amtrak argues that "those reputations were built, and those solid working relationships established at Amtrak." Id.

Once Amtrak's and Veolia's proposals for the SFRTA contract were submitted, an Evaluation Committee used a scoring system to decide which party should be awarded the contract. Id. ¶¶ 43-47. The Evaluation Committee awarded Veolia a total score of 85, including a score of 28 for the qualifications and experience of its personnel identified in its proposal. On the other hand, Amtrak received a total score of 62.3, with a score of 27.3 for the qualifications and experience of the personnel named in its proposal. Id. ¶ 47. "The Evaluation Committee's memorandum also listed perceived strengths of the Veolia proposal, including that its Key Management Team possessed '[s]trong qualifications'; that Veolia was an '[e]xperienced company with worldwide resources'; that it '[p]ossess[ed] U.S. Commuter Rail experience'; and that it possessed '[k]nowledge of shared rail corridors."' Id. ¶ 48 (emphasis in original). "Based on the Evaluation Committee's memorandum and recommendation, the Tri-Rail System operations contract was awarded to Veolia." Id. ¶ 50.

In a January 24, 2007 letter, Amtrak was informed of Veolia's successful bid. Id. ¶ 52. Subsequently, on January 26, 2007, Amtrak learned "that Veolia had [allegedly] induced Stencil, Salemme and Mauck to support Veolia's competing bid, and also learned that Veolia had extracted promises from each of them not to support Amtrak's bid." Id. Furthermore, Amtrak contends that as employees, Stencil, Salemme, and Mauck ("the three employees"), "owed Amtrak fiduciary duties of care, undivided loyalty, and obedience," id. ¶ 33; and that Veolia aided and abetted the solicited employees to breach those duties rendering Amtrak not as qualified as it might have been when it submitted its proposal, id. ¶ 42.

In this action, Amtrak is seeking to recover the damages it contends it suffered as a result of not being awarded the contract and for tortious interference with a prospective economic advantage. The first count of the complaint claims that Amtrak was owed a duty of loyalty from the three employees who were enticed to leave its employ by the defendants, and that the defendants' wrongful acts aided and abetted the three employees' breach of that duty. Id. ¶¶ 39-54. The second count of the complaint alleges that Veolia, through its actions, improperly interfered with Amtrak's prospective economic advantage. Id. ¶¶ 63-66. Veolia has moved to dismiss Amtrak's claims pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. In support of their argument, Veolia contends that (1) Amtrak has failed to demonstrate that any alleged damages were caused by Veolia's actions; (2) Amtrak has failed to allege a cause of action for aiding and abetting the breach of a fiduciary duty; (3) Amtrak has failed to allege a cause of action for tortious interference with an economic advantage; and (4) allowing Amtrak to maintain its claims would be contrary to public policy. Defendants' Memorandum in Support of the Motion to Dismiss ("Defs.' Mem.") at 3, 5, 9, 12.

II. Standard of Review

On a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6), this Court must construe the allegations and facts in the complaint in the light most favorable to the plaintiff and must grant the plaintiff the benefit of all reasonable inferences that can be derived from the facts alleged in the complaint. Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). In deciding whether to dismiss a claim under Rule 12(b)(6), the Court may consider only the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, and matters about which the Court may take judicial notice.*fn5 EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624-25 (D.C. Cir. 1997). A Rule 12(b)(6) motion should be granted and the claim dismissed only if the plaintiff does not provide "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, ___U.S. ___, ___, 127 S.Ct. 1955, 1974 (2007).

III. Legal Analysis

A. The Plaintiff's Claim of Aiding and Abetting the Breach of a Fiduciary Duty

Veolia seeks dismissal under Rule 12(b)(6) of Amtrak's aiding and abetting the breach of a fiduciary duty claim on the ground that: (1) Amtrak has failed to demonstrate that the former at-will Amtrak employees had a fiduciary duty to Amtrak or that the employees had a contract with Amtrak restricting them from pursuing other employment opportunities, Defs.' Mem. at 7; (2) Amtrak's complaint does not show how the former Amtrak employees breached a fiduciary duty owed to Amtrak because the Operation Contract was not within the scope of any of the three employees' employment or duties with Amtrak, id. at 9; (3) Amtrak has failed to show that Veolia knew of any fiduciary duty the three employees allegedly owed to Amtrak and knew of Amtrak's interest in acquiring the Operations Contract, Defendants' Reply Memorandum in Support of Motion to Dismiss ("Defs.' Reply") at 8; and (4) Amtrak has not asserted facts which show that Veolia encouraged the former Amtrak employees to breach a fiduciary duty they owed to Amtrak, id. Instead, Veolia contends that it merely provided the three employees an opportunity for better employment. Defs.' Mem. at 5. Accordingly, Veolia argues that Amtrak has failed to state a claim for aiding and abetting the breach of a fiduciary duty upon which relief may be granted.

Veolia's position is premised on the proposition that it acted completely within its rights when it offered the three Amtrak employees new job opportunities. Id. Veolia further contends that in order to sustain its claim that Veolia aided and abetted the breach of a fiduciary duty, Amtrak would have to show that the three employees owed Amtrak a duty of loyalty. Id. And, according to Veolia, because Amtrak's employees were not under any contractual obligations, and thus were at-will employees, Amtrak has failed to state an actionable claim. Specifically, Veolia asserts, "Amtrak's fiduciary claim contradicts the well-recognized and firmly-established rule that there is nothing actionable about recruiting a competitor's employees, where those employees are at-will and not subject to non-compete agreements or other restrictive covenants." Id. at 6. Veolia offers support for its position by citing Schmersahl, Treloar & Co., P.C. v. McHugh, 28 S.W.3d 345 (Mo. Ct. App. 2000), which stated:

Competition in the marketplace encompasses competition in the labor market, including an employer's ability to solicit and hire the at-will employees of another and an at-will employee's ability to seek employment at better terms. There is no wrong in making an offer of employment to an at-will employee, even though the employee and his new employer may compete with the ...


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