conclusion that the Act does not create individual liability. Indeed, it is incongruous that in one breath Congress would protect small business owners and in another leave individuals vulnerable to the expense of such litigation. See Birkbeck, 30 F.3d at 510; Grant, 21 F.3d at 652; Ryan v. Grae & Rybicki, P.C., 1995 U.S. Dist. LEXIS 11544, 1995 WL 170095, *2 (citing Maxwell's Intern. Inc., 991 F.2d at 587).
Several courts have, however, found it "conceivable" that Congress intended individual liability of large employers but protected small businesses to allow them to hire their friends or relatives. See, e.g., Lamirande v. Resolution Trust Corp., 834 F. Supp. 526 (D. N.H. 1993). This possibility however must be weighed against Congress's failure to specifically provide for individual liability as well as the message sent by Congress in the 1991 Amendment's to the Civil Rights Act. In those amendments Congress did not specifically provide for individual liability. Moreover, while Congress expanded the types of available damages to include compensatory and punitive damages, the amended damage scheme is specifically premised upon the liability of an employing entity. See AIC Security Investigation, Ltd, 55 F.3d 1276, 1995 WL 309832, *3-4; Lowry v. Clark, 843 F. Supp. 228 (E.D. Ky. 1994). Specifically, the 1991 Amendment cap on the amount of allowable recovery is a sliding scale based upon the increasing number of employees the entity employs. No such cap was imposed for individuals. Furthermore, the cap is based upon a 14 person minimum number of supervised employees, thus not envisioning individual liability for a supervisor of fewer than 14 employees. See 42 U.S.C. § 1981a(b) (3) (A); Id. Therefore, this Court is persuaded that the Act does not allow for individual liability such that the "agent" language in the statute was intended to secure only respondeat superior liability.
Finally, while this Court rejects the notion of individual liability under the ADEA, individuals may be named as defendants in their representative or official capacities for the purposes of respondeat superior liability. See Harvey v. Blake, 913 F.2d 226 (5th Cir. 1990); Romand, 881 F. Supp. 806, 1995 WL 153398, *6. Such liability gains advantages in discovery, in the ultimate liability of the employing entity, and of, course, in the personal satisfaction of calling upon the alleged wrongdoer to publicly answer the accusations levied against him. In this case, however, plaintiffs failed to clearly allege representative liability against Murdoch. Thus, plaintiffs should be granted 30 days in which to amend their complaint to allege representative liability.
In must be noted that plaintiffs have also argued in their Memorandum of Law that Murdoch may be liable as the "alter ego" of defendant corporation. While this assertion may be valid, plaintiffs may not now rely on such an alter ego theory due to their failure to properly plead this claim. To assert a claim for individual liability under an alter ego theory one must plead two elements: (1) that the person exercises such complete dominion and control "in respect to the transaction attacked" that the corporation had "at the time" no separate will of its own, and (2) that this domination was used to "commit fraud or wrong" against the plaintiff, which proximately caused the plaintiff's injury. American Protein Corp. v. AB Volvo, 844 F.2d 56, 60 (2d Cir.), cert. denied, 488 U.S. 852, 102 L. Ed. 2d 109, 109 S. Ct. 136 (1988) (quoting Lowendahl v. Baltimore & Ohio R.R., 247 A.D. 144, 287 N.Y.S. 62, (N.Y. App. Div. 1st Dep't), aff'd, 272 N.Y. 360, 6 N.E.2d 56 (1936)); Zinaman v. USTS New York Inc., 798 F. Supp. 128, 131 (S.D.N.Y. 1992).
Finding alter ego liability is an exception to the general principal that individual owners, officers and shareholders of a corporation are not personally liable for corporate acts. See William Wrigley Jr. Co. v. Waters, 890 F.2d 594, 600 (2d Cir. 1989). Courts weigh several factors to determine whether a person or entity is an alter ego, including:
(1) the absence of the formalities and paraphernalia that are part and parcel of the corporate existence, i.e., issuance of stock, election of directors, keeping of corporate records and the like, (2) inadequate capitalization, (3) whether funds are put in and taken out of the corporation for personal rather than corporate purposes, (4) overlap in ownership, officers, directors, and personnel, (5) common office space, address and telephone numbers of corporate entities, (6) the amount of business discretion displayed by the allegedly dominated corporation, (7) whether the related corporations deal with the dominated corporation at arms length, (8) whether the corporations are treated as independent profit centers, (9) the payment or guarantee of debts of the dominated corporation by other corporations in the group, and (10) whether the corporation in question had property that was used by other of the corporations as if it were its own.
Wm. Passalacqua Builders v. Resnick Developers S., 933 F.2d 131, 139 (2d Cir. 1991). This list is not exhaustive, rather alter ego liability should be imposed "when doing so would achieve an equitable result." William Wrigley, Jr. Co., 890 F.2d at 601.
In the present case, plaintiffs have failed to allege either control and dominion, or that this alleged dominion caused a wrong or fraud on plaintiffs. The complaint merely states that Murdoch is "the owner, principal shareholder and/or general partner of Defendants, NYPH and the Post, and is also himself an "employer" within the meaning of the Act and the HRL." (Complaint, p. 4). Plaintiffs do not allege that Murdoch controlled the Post such that it was a mere instrumentality of his, nor do plaintiffs allege any facts that might support such a conclusion. Plaintiffs do not allege that Murdoch was solely responsible for the employment decisions at the Post, nor do plaintiffs allege any of the factors which weigh in favor of individual liability, i.e. that no corporate formalities where honored, that there was inadequate capitalization. While specificity may not required to plead an alter ego theory, one must allege more than ownership, shareholder or partnership status. See Strojmaterialintorg v. Russian American Commercial Corp., 815 F. Supp. 103 (E.D.N.Y. 1993) (conclusory allegations insufficient but leave to plead facts allowed); Zinaman, 798 F. Supp. at 132 (dismissing alter ego theory for failure to plead "control and dominion").
In sum, plaintiffs fail to sufficiently allege an alter ego theory, or any supporting facts for such liability and cannot now seek to hold Murdoch individually liable for the acts of the Post. If, however, plaintiffs are able to allege facts sufficient to support an alter ego theory, they may seek leave to amend their complaint. It is premature for this Court to recommend an amendment without any indication of the basis upon which alter ego liability rests against Murdoch.
Thus, it is respectfully recommended that the complaint against Murdoch, individually, be dismissed, that plaintiffs be given 30 days to amend their complaint to allege representative liability, and that nothing in this Report and Recommendation foreclose plaintiffs from later seeking leave to amend their complaint to allege alter ego liability.
B. Defendant's Motion to Dismiss the HRL Claims
Defendant Murdoch next argues that plaintiffs' claim against him under New York State HRL should be dismissed pursuant to FED. R. CIV. P. 12(b)(6) for failure to state a claim upon which relief may be granted, and because he is not an "employer" within the meaning of the HRL. (Def.'s Mem. of Law, p. 5-7, Def.'s Reply Mem. of Law, p. 6, 8). Although individual liability under the HRL is seemingly broader than individual liability under the ADEA, plaintiffs' HRL claim is insufficient to withstand defendant's 12(b) (6) motion.
As previously stated, the court should not dismiss a complaint for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). The court's function on a motion to dismiss "is not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient." Festa v. Local 3 Int'l Bd. of Elec. Workers, 905 F.2d 35, 37 (2d Cir. 1990). Thus, the court must limit its analysis to the four corners of the complaint, see Kopec v. Coughlin, 922 F.2d 152, 154-155 (2d Cir. 1991), and must accept all of plaintiff's well-pleaded factual allegations to be true. Papasan v. Allain, 478 U.S. 265, 283, 92 L. Ed. 2d 209, 106 S. Ct. 2932 (1986); Brass v. American Film Technologies, Inc., 987 F.2d 142, 150 (2d Cir. 1993). Where an action is dismissed for failure to state a claim, "such a dismissal ordinarily should be accompanied by leave to file an amended complaint." Branum v. Clark, 927 F.2d 698, 705 (2d Cir. 1991); Alie v. NYNEX Corp., 158 F.R.D. 239, 245 (E.D.N.Y. 1994) (dismissing Title VII claim with leave to replead); Abbasi v. Herzfeld & Rubin, P.C., 863 F. Supp. 144, 146 (S.D.N.Y. 1994).
FED. R. CIV. P. 8(a) requires only that a party plead the facts upon which its claim is based. Averments, however, may not be mere conclusory allegations that "fail to give notice of the basic events and circumstances of which the plaintiff complains. Such allegations are meaningless as a practical matter and, as a matter of law, insufficient to state a claim." Duncan v. A.T. & T. Communications, Inc., 668 F. Supp. 232, 234 (S.D.N.Y. 1987); Ruderman v. Police Dep't, 857 F. Supp. 326, 329-330 (S.D.N.Y. 1994) (dismissing continuing ADEA violation claim due to vagueness).
Viewing the facts in the light most favorable to plaintiffs and drawing all reasonable inferences in their favor, this Court finds that the complaint fails to plead that Murdoch is individually liable under the HRL. Plaintiffs allege that they were terminated and not rehired by the "defendants" in or about October 1993, that
"Defendants intentionally designed and implemented a reorganization program (the "Program") which provided for the termination of all persons working for the "New York Post" . . . " that "upon information and belief, Defendants' Program has reflected, in both purpose and effect, a blatant and willful pattern of age discrimination. Defendants' discriminatory activities have included, but have not been limited to, the following: