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RICE v. SCUDDER KEMPER INVESTMENTS

August 14, 2003

LARRY RICE, PLAINTIFF, -AGAINST-, SCUDDER KEMPER INVESTMENTS, INC., ILLINOVA GENERATING CO., CONTINENTAL ENERGY SERVICES, INC., EYOB EASWARAN AND MICHAEL O'NEILL, DEFENDANTS


The opinion of the court was delivered by: Robert Carter, Senior District Judge [ Page 1]

OPINION

Plaintiff, Larry Rice, brings this amended complaint against defendants, Scudder Kemper Investments, Inc. ("Scudder"), Illinova Generating Company ("Illinova"), Continental Energy Services, Inc. ("Continental"), Eyob Easwaran and Michael O'Neill alleging unlawful discrimination in violation of New York Executive Law, Article 15, § 296(1) ("New York Human Rights Law" or "NYHRL"), willful and malicious breach of contract, and willful and malicious breach of New York Labor Law, article 6, §§ 191, 193, 195 and 198. Defendants now move to strike the new allegations from the amended complaint pursuant to Rule 12(f), F.R.Civ.P., as well as renew their previous motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), F.R.Civ.P. Jurisdiction is proper pursuant to 28 U.S.C. § 1332 as the parties are diverse and alleged damages exceed $75,000.*fn1

Background

The relevant facts construed in the light most favorable to plaintiff are as follows. Plaintiff is a [ Page 2]

white male citizen of Missouri. In 1995, he was working in Mexico City, Mexico, when defendants began negotiating with plaintiff to become General Manager and Chief Executive Officer of Jamaica Energy Partners ("JEP"), in Kingston, Jamaica. (See Pl.'s Am. Compl. ¶¶ 22, 24.) JEP is a Jamaican partnership owned by the corporate defendants and Dr. Bird Co. Ltd., a St. Lucia corporation. (Id. at ¶ 16.)

Plaintiff, then in his late forties, was advised during negotiations that defendants "needed someone with gray hair to get this thing setup and only needed him/her for three years as they could then find someone cheaper and younger to carry on." (Id. at ¶ 25.) Thus, plaintiff alleges he was offered a three-year contract with an automatic termination at its conclusion. Plaintiff executed this contract with the express reservation, however, that the automatic termination date be removed from the terms. Defendants agreed to plaintiff's demand, removing the automatic termination date and communicating to plaintiff that the "intent from our side is clearly a long term relationship." (Id. at ¶ 28.) On February 26, 1996, JEP's board approved the executed contract dated January 31, 1996 ("Agreement"), and plaintiff subsequently commenced work on or about March 1, 1996. (Id. at ¶¶ 31, 35.) [ Page 3]

After almost three years of employment with JEP, plaintiff was fired on January 12, 1999. (Id. at ¶ 37.) The alleged reason for plaintiff's termination was plaintiff's refusal to refrain from making public comments about JEP's sole customer, Jamaica Public Service Co. Ltd. ("JPSCo"). (Id. at ¶¶ 40,41.) Following his termination, plaintiff was replaced by Carlton Stephen, a black Jamaican at least 10 years younger than plaintiff. (Id. at ¶ 61.)

In accord with the provisions in plaintiff's Agreement with JEP (see LaRocca Aff. Ex. A), plaintiff filed a claim and demand for arbitration, protesting his termination and demanding nearly 15 million dollars in damages. (See LaRocca Aff. Ex. 6.) The arbitration took place in New York, NY, on October 24 and 26, 2001, and on January 7 and 8, 2002, during which plaintiff was represented by counsel. (See id.) In a long and detailed decision dated July 9, 2002, the arbitrator rejected plaintiff's claims of fraudulent inducement, defamation, intentional infliction of emotional distress, right to a discretionary bonus, right to retirement plan contributions, and right to reimbursement for plaintiff's vehicle. (See id.) The arbitrator did find that JEP breached the Agreement with plaintiff by violating the six-month written notice of termination provision when they made plaintiff's [ Page 4]

termination effective immediately. (See id.) The arbitrator found that this breach entitled plaintiff to several benefits that were withheld from him during the agreement's six-month notice period, namely reimbursement for medical, business, and relocation expenses along with unused vacation days. (See id.) The arbitrator awarded plaintiff $40,094.00 with interest, as compensation for these lost benefits. (See id.)

Following the conclusion of the arbitration, plaintiff filed his original complaint with this court alleging violations of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621, et seq., discrimination on the basis of race and national origin in violation of Title VII of the Civil Rights Act, 42 U.S.C. § 2000-e, et. seq., unlawful discrimination in violation of the NYHRL, and willful and malicious breach of the agreement between plaintiff and defendants. The court has dealt with this action previously in two opinions, Rice v. Scudder Kemper, No. 01 Civ. 7078, 2003 WL 174243 (S.D.N.Y. Jan. 27, 2003) (Carter, J.), and, Rice v. Scudder Kemper, No. 01 Civ. 7078, 2003 WL 17424 (S.D.N.Y. April 8, 2003) (Carter, J.), with which familiarity is assumed. [ Page 5]

Discussion

I. Motion to Strike

Motions to strike pursuant to Rule 12(f), F.R.Civ.P., may be made by a party to strike any immaterial matter from a party's pleadings. See Rule 12(f), F.R.Civ.P. Defendants are correct to point out that plaintiff's addition of new factual and legal allegations to his complaint went far beyond the leave to amend the court granted plaintiff. See Rice, 2003 WL 1846934, at *3. In granting plaintiff leave to amend, the court noted that the dismissal of his federal claims would require dismissal of his state claims as well because without valid federal claims or diversity jurisdiction, the court could no longer assert supplemental jurisdiction over plaintiff's state claims. See id. Mindful that the parties appeared diverse, the court instructed plaintiff how and under what statute plaintiff should amend his complaint in order to properly plead diversity jurisdiction and keep his claims in federal court. See id.

Plaintiff successfully complied with the court's instructions regarding diversity jurisdiction but also took the opportunity to add claims under New York's Labor Laws, as well as make several new factual allegations, including that ...


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