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Reel Precision Inc. v. Fedex Ground Package Systems Inc.

United States District Court, D. Arizona

August 8, 2016

Reel Precision, Inc., an Arizona corporation; Alfred and Sheree Levett, a married couple filing jointly; Plaintiffs,
FedEx Ground Package Systems, Inc., a Delaware corporation doing business in Arizona; FedEx Corporation, a Delaware corporation doing business in Arizona; Eric Pagano and Jane Doe Pagano, a married couple; Amy Gosselink and Stacy Meendering, a married couple; John and Jane Does I-X; Black Corporations I-X; White Partnerships I-X; Red Limited Liability Companies I-X, Defendants.



         Before the Court is Defendants’ Partial Motion to Dismiss or for More Definite Statement (Doc. 25). On March 11, 2016, Defendants moved to dismiss Counts IV and V of the Second Amended Complaint for failure to state claims upon which relief can be granted. On April 11, 2016, the Court ordered that if Plaintiffs contended any further amendment of the Second Amended Complaint could cure any alleged deficiency, Plaintiffs must submit a proposed further amended complaint containing all further allegations Plaintiffs could make. The Court further ordered that no leave would be granted to amend the Second Amended Complaint beyond what was offered in the proposed further amended complaint. On April 22, 2016, Plaintiffs lodged a proposed Third Amended Complaint. Defendants’ motion will be considered a motion to dismiss Counts IV and V of the proposed Third Amended Complaint.


         On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), all allegations of material fact are assumed to be true and construed in the light most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). To avoid dismissal, a complaint need contain only “enough facts to state a claim for relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The principle that a court accepts as true all of the allegations in a complaint does not apply to legal conclusions or conclusory factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “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.” Id.


         Plaintiffs Alfred and Sheree Levett are a married couple and the managing shareholders of Plaintiff Reel Precision, Inc. Defendants are FedEx Corporation, its wholly owned subsidiary FedEx Ground Package System, Inc., and two of its managers and their spouses. Reel Precision was formed for the purpose of contracting with FedEx to provide pick-up and delivery services in specific primary service areas or routes. Plaintiffs owned and operated the vehicles and other equipment used to perform package pick-ups and deliveries. They also hired other drivers to assist with the pick-up and delivery services. Plaintiffs performed services for FedEx pursuant to an operating agreement.

         In 2012 FedEx managers formed a Contractor Safety Committee. During a meeting of the Contractor Safety Committee in November or December 2013, which Plaintiff Sheree Levett attended, Defendant Eric Pagano introduced a concept he referred to as the “walk of shame.” Pagano explained that any driver or person related to the driver who was involved in a vehicle accident should be required to personally change the electronic signage displaying the number of days since the last accident. The signage was located so that any person who would be required to take the “walk of shame” would be observed by others.

         On April 25, 2014, a driver hired by Plaintiffs was involved in a vehicle collision. On April 29, 2014, Sheree and Plaintiffs’ driver met with Defendant Amy Gosselink to discuss the collision. Alfred was not present at the FedEx facility at the time. After the meeting, Gosselink told Sheree she was required to take the “walk of shame” by personally changing the electronic signage displaying the number of days since the last accident. When Sheree resisted, Gosselink coerced Sheree to comply and escorted her to the signage area. Sheree was extremely embarrassed and humiliated by being forced to change the signage in view of other personnel and drivers. Upon completing the “walk of shame, ” Sheree drove her vehicle to a secluded area and burst into tears. She was unable to concentrate or focus on her work. Subsequently, Sheree has experienced depression, anxiety, loss of concentration, and trembling.

         Within a few days of taking the “walk of shame, ” Sheree spoke with FedEx’s Contractor Relations Specialist, Vicki Perry. Perry told Sheree that she thought the “walk of shame” was disgusting and that she had lost sleep several nights after hearing that Sheree had been forced to take the “walk of shame.” In May 2014, Alfred told Perry his concerns regarding Sheree being forced to take the “walk of shame” and regarding FedEx management forcing Plaintiffs to make delivery attempts beyond the requirements of their operating agreement without additional compensation. Alfred told Perry he believed compelling Sheree to take the “walk of shame” may have constituted illegal harassment and requiring delivery attempts beyond the requirements of their operating agreement without additional compensation illegally violated the terms of the operating agreement and applicable wage laws. Plaintiffs believe that Perry immediately conveyed Alfred’s complaints to Pagano and Gosselink.

         Another contractor for FedEx told Alfred that Gosselink subjecting Sheree to the “walk of shame” was “out of order.” One of Plaintiffs’ drivers said he wished he was present when it occurred because he would have stopped it from happening. Plaintiffs’ driver who was involved in the collision said that Gosselink was a “bitch” because she made Sheree take the “walk of shame.”

         FedEx’s policies prohibit harassment and retaliation against a person who reports in good faith any known or suspected misconduct. Plaintiffs are aware of other drivers who have been in vehicle collisions but neither the driver nor anyone related to the driver was similarly required to take the “walk of shame.”

         On July 10, 2014, Pagano notified Plaintiffs that he was recommending to FedEx that their contracts not be renewed. On July 14, 2014, Alfred requested a written explanation, which Pagano refused. Pagano’s oral comments referred to Alfred complaining to Perry. On August 5, 2014, Alfred received notice of non-renewal effective October 9, 2014. No explanation for non-renewal was given.

         III. ANALYSIS

         A. Count V: Intentional Infliction of Emotional Distress

         Although the proposed Third Amended Complaint alleges that “Plaintiffs”- plural-suffered severe and debilitating emotional distress, Plaintiffs’ response to the motion to dismiss states that “Ms. Levett has sufficiently pled all of the required IIED elements.” (Doc. 31 at 6.) The response repeatedly refers to Ms. Levett’s claim, but does not refer to any other Plaintiff having a claim for intentional infliction of emotional distress. Therefore, Count V is deemed to be pled only by Sheree Levett.

         Under Arizona law, a claim for intentional infliction of emotional distress requires factual allegations showing that (1) Defendants engaged in “extreme” and “outrageous” conduct, (2) Defendants either intended to cause emotional distress or recklessly disregarded the near certainty that such distress would result from Defendants’ conduct, and (3) Plaintiffs suffered “severe emotional distress” as a result of Defendants’ conduct. Craig v. M & O Agencies, Inc., 496 F.3d 1047, 1058 (9th Cir. 2007); Ford v. Revlon, Inc., 153 Ariz. 38, 43, 734 P.2d 580, 585 (1987); Mintz v. Bell Atl. Sys. Leasing Int’l, Inc., 183 Ariz. 550, 553-54, 905 P.2d 559, 562-63 (Ct. App. 1995). “[C]onduct necessary to sustain an intentional infliction claim falls at the very extreme edge of the spectrum of possible conduct.” Watts v. Golden Age Nursing Home, 127 Ariz. 255, 257, 619 P.2d 1032, 1035 (1980). It “must completely violate human dignity. The conduct must strike to the very core of one’s being, threatening to shatter the frame upon which one’s emotional fabric is hung.” Pankratz v. Willis, 155 Ariz. 8, 15, 744 P.2d 1182, 1189 (Ct. App. 1987).

         As explained in Restatement (Second) of Torts § 46 cmt. d:

Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, “Outrageous!”
The liability clearly does not extend to mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities. The rough edges of our society are still in need of a good deal of filing down, and in the meantime plaintiffs must necessarily be expected and required to be hardened to a certain amount of rough language, and to occasional acts that are definitely inconsiderate and unkind. There is no occasion for the law to intervene in every case where someone’s feelings are hurt.

         The trial court must make a preliminary determination whether the conduct may be considered sufficiently “extreme” and “outrageous” to permit recovery. Nelson v. Phoenix Resort Corp., 181 Ariz. 188, 199, 888 P.2d 1375, 1386 (Ct. App. 1994). That issue may only go to the jury where “reasonable minds may differ.” Id. Even unjustifiable conduct by a defendant does not necessarily rise to the level of “atrocious” and “beyond all possible bounds of decency” to be considered “outrageous” by an average member of the community. Id. Case-by-case analysis is required to determine whether a defendant’s conduct is “outrageous.” Lucchesi v. Frederic N. Stimmell, M.D., Ltd., 149 Ariz. 76, 79, 716 P.2d 1013, 1016 (1986).

         Plaintiffs allege that the “walk of shame” is “atrocious” and “utterly intolerable” because four people made comments indicating that they were offended by it, Defendants intended to embarrass and humiliate Sheree, and the “walk of shame” violates company policies and Arizona laws prohibiting hazing and harassment. But the standard is not whether any individuals have actually exclaimed, “Outrageous!” The standard is an objective one: would an average person in this community consider the conduct to be so outrageous and so extreme ...

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