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Sweringen v. New York State Dispute Resolution Association

September 28, 2006


The opinion of the court was delivered by: Norman A. Mordue, Chief U.S. District Judge:



Defendants New York State Dispute Resolution Association (NYSDRA) and New York State Attorney General Eliot Spitzer move pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss the complaint. Plaintiffs Randall Sweringen, David Wilson and John Doe(s) oppose defendants' motions.


The Court accepts as true the following facts from the complaint: Plaintiffs were sexually abused by priests as children. NYSDRA is "legally and/or contractually" involved in a dispute resolution program on behalf of the Roman Catholic Diocese of Albany, "its agencies, employees, surrogates or their lawyers with respect to childhood sexual abuse by priests." NYSDRA, inter alia, mediates disputes between individuals and the Albany Diocese involving childhood sexual abuse claims.

Sweringen, who was abused by a priest when he was 18, has signed up for and participated in NYSDRA's program. The John Doe plaintiffs, who were victims of childhood sexual abuse by a priest "ha[ve] an interest in" NYSDRA's program.

NYSDRA utilized print, television, and radio to advertise its efforts to mediate disputes between victims of childhood sexual abuse by priests and the Albany Diocese. NYSDRA's "own website . . ., or bylaws, regulations or policies", however, "state . . . that mediation by . . . NYSDRA is not an option in cases or claims involving child abuse". The advertisements also represent that NYSDRA, or its partners, surrogates, agents, and/or lawyers are "independent".

NYSDRA, however, has a conflict of interest because the Albany Diocese pays the law firm of Whiteman Osterman and Hanna, which has represented the Albany Diocese in "litigation adverse to clergy sexual abuse victims", $350 per hour to administer NYSDRA, and has set aside at least $500,000 to pay NYSDRA's costs. The NYSDRA has refused to reveal any contracts or other agreements with "any of the parties, lawyers, agents or principals to the program."

Pursuant to agreements with the district attorneys in the fourteen counties that comprise the Albany Diocese, the Albany Diocese is obligated to tell victims of abuse to retain an attorney. NYSDRA "stand[s] in the shoes of the Albany Diocese or is united in interest with the Albany Diocese in dealing with, or acting with regard to matters involving clergy sexual abuse claims or victims," but does not tell victims of abuse to retain an attorney. Consequently, victims have participated in NYSDRA's program without counsel, and have been exploited or taken advantage of by NYSDRA.

One example of the "unfair and unjust" nature of NYDSRA's program is that NYSDRA, its employees, agents, attorneys, spokesmen, partners, and/or principals "have charged themselves with being and having discretionary authority in determining what matters go to or are allowed to proceed to mediation and what matters are delayed or do not go to mediation."

Further, NYSDRA's executive director, Lisa Hicks, falsely advised Sweringen that NYSDRA "was permitted to be involved in the program and that the program was appropriately vetted by the defendant NYSDRA and did not involve fraud, deception or a conflict of interest." NYSDRA, which is "making a substantial amount of money from its client or principal", advertised the program as "independent" so victims would participate in a program "that benefited . . . NYSDRA and its principals."

As a result of the above, plaintiffs seek injunctive relief directing NYSDRA to cease mediating claims involving childhood sexual abuse by Albany Diocese priests or compelling Attorney General Spitzer to act to remedy matters (first cause of action). Plaintiffs also allege: fraud (second cause of action); violations of the New York State General Business Law § 349 and 22-A, and of the Executive Law 62(12) (third cause of action); breach of oral contract (fourth cause of action); negligence (fifth cause of action); and breach of fiduciary duty (sixth cause of action).


Plaintiffs allege that the Court has diversity jurisdiction over this action because Sweringen and Wilson are residents and citizens of California and Florida, respectively, defendants are citizens of New York, and the John Doe plaintiffs reside or have citizenship in "different states", and the amount in controversy exceeds $75,000.


Standard Rule 12(b)(6)

When considering a motion to dismiss a complaint under Rule 12(b)(6), a court "'must accept as true all of the factual allegations set out in plaintiff's complaint, draw inferences from those allegations in the light most favorable to plaintiff, and construe the complaint liberally.'" Gregory v. Daly, 243 F.3d 687, 691 (2d Cir. 2001) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). A court may not dismiss an action "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of [its] claim which would entitle [it] to relief." Conley, 355 U.S. at 45-46. "'[T]he issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims."' Todd v. Exxon Corp., 275 F.3d 191, 198 (2d Cir. 2001) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). Plaintiffs have submitted several affidavits in opposition to the motions to dismiss. The Court has not considered these affidavits in addressing defendants' motion. It is well settled that the Court may not look to evidence outside the pleadings in deciding a Rule 12(b)(6) motion to dismiss for failure to state a claim. Kramer v. Time Warner, Inc., 937 F.2d 767 (2d Cir. 1991) ("In considering a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), a district court must limit itself to facts stated in the complaint or in documents attached to the complaint as exhibits or incorporated in the complaint by reference.").

Attorney General Spitzer

Plaintiffs seek to compel Attorney General Spitzer to initiate action against or investigate NYSDRA pursuant to N. Y. Exec. Law § 63(12) and N.Y. Gen. Bus. Law § 349. The injunctive relief plaintiffs seek is in the nature of mandamus. Defendant Spitzer moves to dismiss the complaint on the basis that the decision whether to investigate or initiate action against NYSDRA is discretionary, and thus cannot be compelled by mandamus. A mandamus to compel is appropriate "where the right to relief is 'clear' and the duty sought to be enjoined is performance of an act commanded to be performed by law and involving no exercise of discretion." Hamptons Hospital & Medical Center, Inc. v. Moore, 52 N.Y.2d 88, 96 (1981) (citation omitted).

Section 63(12) of the Executive Law states:

Whenever any person shall engage in repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in the carrying on, conducting or transaction of business, the attorney general may apply, in the name of the people of the state of New York, to the supreme court of the state of New York, on notice of five days, for an order enjoining the continuance of such business activity or of any fraudulent or illegal acts, directing restitution and damages and, in an appropriate case, canceling any certificate filed under and by virtue of the provisions of section four hundred forty of the former penal law or section one hundred thirty of the general business law, and the court may award the relief applied for or so much thereof as it may deem proper. The word "fraud" or "fraudulent" as used herein shall include any device, scheme or artifice to defraud and any deception, misrepresentation, concealment, suppression, false pretense, false promise or unconscionable contractual provisions. The term "persistent fraud" or "illegality" as used herein shall include continuance or carrying on of any fraudulent or illegal act or conduct. The term "repeated" as used herein shall include repetition of any separate and distinct fraudulent or illegal act, or conduct which affects more than one person.

N.Y. Exec. Law § 63(12) (emphasis added). Section 349 of the General Business Law states, in pertinent part:

Whenever the attorney general shall believe from evidence satisfactory to him that any person, firm, corporation or association or agent or employee thereof has engaged in or is about to engage in any of the acts or practices stated to be unlawful he may bring an action in the name and on behalf of the people of the state of New York to enjoin such unlawful acts or practices and to obtain restitution of any moneys or property obtained directly or indirectly by any such unlawful acts ...

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