Plaintiff Nadalette Nelson is suing defendant Publishers Circulation Fulfillment, Inc. for a violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq., as well as asserting state law claims of negligence, fraud, negligent misrepresentation, constructive fraud, breach of fiduciary duty, civil conspiracy to commit fraud, aiding and abetting fraud, and a claim under New York General Business Law ("GBL") section 349. Nelson claims that Publishers wrongfully reported that she had earned income at Publishers and sent fake paychecks to a third party, after Nelson no longer worked for Publishers, and that her signature was forged on the fake paychecks. Nelson alleges that she has received letters from the Internal Revenue Service ("IRS") asserting that she owes income taxes based on her receipt of such paychecks and that Publishers also disclosed confidential information about her to third parties. Publishers moves to dismiss the entire complaint for failure to state a claim.
The motion to dismiss is granted.
The following facts are drawn from the complaint and are assumed to be true for purposes of this motion.
Nelson is a former employee of Publishers. She lives in New York. Publishers is a corporation organized under the laws of Maryland, with its principal place of business in Maryland. It is the largest newspaper home delivery distributor in the United States. It delivers approximately 11 million newspapers each week.
Nelson successfully applied for a job with Publishers around 2006. She filled out an employment application, which she alleges included certain "personal and confidential biographical information," including her Social Security Number, date of birth, address, and home phone number. She claims that Publishers "assumed a duty not to disseminate in any way and to protect closely such private and confidential biographical information" through "express and implied promises." Nelson claims she was lured to work for Publishers by promises on its website, such as "[y]ou'll be rewarded" and that she could rely on the "safety and protection," and the flexible benefits, afforded to Publishers' "team." However, she claims that in actuality, Publishers' goal was not to provide "safety and protection" for her, but to steal her private and confidential information so that Publishers could disclose that information by drafting checks in her name after she left.
While Nelson was employed by Publishers, Publishers mailed Nelson's payroll check to her apartment in Brooklyn, New York. Although the details of Nelson's employment are not clear from the complaint, it appears that she is alleging that she was an at-will employee of Publishers. Later in 2006, Nelson resigned from Publishers and took a job with Future Care Health Services, Inc. Nelson alleges that after her resignation from Publishers, Publishers either intentionally or negligently continued to create payroll checks payable to her and mailed them to an address that did not belong to her and where she had never lived. Nelson claims that Publishers mailed the checks to another address so that an unknown third party could receive the checks, forge her signature, and cash the checks. She has explained that the forged signatures on the checks are noticeably different from her natural signature, and that she did not receive or cash such checks.
According to Nelson, Publishers' promises that it would keep her confidential information secret and the representations on Publishers' website were made with the goal of making Nelson responsible for taxes in the future based on the fake payroll checks. She claims that fifty such false checks have been cashed in her name between her resignation in 2006 and 2009. Nelson has provided the values of three of those checks, which were for $633.29, $594.91, and $653.53.
In June 2010, Nelson received two notices from the IRS accusing her of failing to declare on her tax return income allegedly generated from her employment with Publishers. Nelson claims that these IRS notices are the result of income falsely attributed to her by Publishers. Nelson requested that Publishers notify the IRS that Nelson did not work for Publishers during the time in question, but Nelson alleges that Publishers did not do so. Nelson claims that she has been exposed to "massive civil and criminal liability and penalties," but notes that the "full impact and total ramifications of these acts cannot be fully known or completely understood for many years to come." She does not allege that she has been made to pay on any tax liability to the IRS.
Claim 1 is for a violation of RICO. Nelson claims that Publishers' conduct included the violation of many different federal statutes, including statutes prohibiting identity theft and identity fraud, tax fraud, mail fraud, wire fraud, bank fraud, forgery, obstruction of justice related to state gambling laws, extortion, and grand larceny. Nelson also claims that Publishers' violated New York Penal Law sections 175.35 and 175.40. As a result of Publishers' conduct, Nelson seeks damages to remedy "terrible mental anguish" she suffered, which has caused her physical pain, inability to sleep, and inability to participate in her daily activities. She seeks $1.5 million in lost income to compensate her for her inability to "provide services in interstate commerce for the next 30 years," $5 million to compensate for physical and psychological rehabilitation and treatment, and $10 million in damages for the RICO claim, which she alleges should be trebled pursuant to the RICO statute, along with punitive damages.
Nelson also asserts seven tort claims under New York law over which this court has diversity jurisdiction based on Nelson's New York citizenship and Publishers' Maryland citizenship.
Claim 2 is a claim for negligence. Nelson alleges that Publishers breached a duty owed to Nelson by sending checks to Nelson when she was not employed by Nelson and failing to inquire whether she received mail at a different address, as well as failing to supervise its employees and agents that mailed such checks.
Claim 3 is a claim for breach of fiduciary duty. Nelson contends that Publishers had a fiduciary duty to protect the confidentiality of private information she gave them and that it breached this duty by the alleged scheme described above.
Claim 4 is a fraud claim, which is based on allegedly false representations that Publishers made that it would protect her private and confidential biographical information. Claim 5 is a claim for negligent misrepresentation and constructive fraud based on the same facts.
Claim 6 is a claim for "civil conspiracy to commit fraud." Claim 7 is a claim for aiding and abetting fraud. Although it is not clear from Nelson's complaint, both of these claims apparently refer to the fact that Nelson claims Publishers conspired or worked with a third party to issue and cash false checks in her name.
Claim 8 is a claim for deceptive acts and trade practices in violation of New York GBL section 349, which prohibits false and misleading advertising directed towards consumers.
Publishers moves to dismiss all of Nelson's claims for failure to state a claim. Nelson opposes such motion, but only actually argues that the RICO claim, negligence claim, and breach of fiduciary duty claims should survive dismissal.
Publishers claims that Nelson's RICO claim fails to adequately allege a pattern of racketeering activity and that Nelson has ...