Midwest Aluminum Manufacturing Co. v. General Electric Co.

No. 4:90-CV-143 (W.D. Mich. August 4, 1992)

The court holds, applying Michigan law, that a former employee of a company that was forced to shut down due to the cleanup and remediation costs of environmental contamination at its business site, which was alleged to have come from an adjoining manufacturing plant, has failed to allege all the required elements of the intentional tort of interference with prospective economic advantage. The employee alleged that the adjoining plant tortiously interfered with his prospective business expectancies, such as income, salary, and insurance benefits, by polluting the business site and by failing to remediate the contaminated area promptly. The court holds that there is nothing in the complaint that directly or inferentially alleges that the adjoining plant, in releasing hazardous substances which polluted the neighboring property, acted in an intentional and improper manner to advance its purpose of invading the employee's prospective business expectancies.

Counsel for Plaintiffs
Michael D. Schlack
Howard & Howard
The Kalamazoo Bldg.
107 W. Michigan Ave., Ste. 400, Kalamazoo MI 49007
(616) 382-1483

Counsel for Defendants
Christopher R. Genther
Smith & Haughey
200 Calder Plaza Bldg.
250 Monroe Ave., Grand Rapids MI 49503
(616) 774-8000

[23 ELR 20299]

Bell, J.:

Opinion

In this complex environmental case, the plaintiffs have asserted an interference with prospective economic advantage claim against [23 ELR 20300] one of the defendants. That defendant, however, argues that such a claim does not — and indeed cannot — belong in the context of this case, and has accordingly moved for dismissal of that claim under Fed. R. Civ. P. 12(b)(6). Plaintiffs insist otherwise. For reasons that follow, the court agrees with the defendant and therefore GRANTS the motion.¹

I. Background

For more than 35 years, plaintiff Midwest Aluminum Manufacturing Company ("Midwest") produced a variety of aluminum products in Oshtemo Township (near Kalamazoo), Michigan. On December 14, 1990, however, Midwest halted its operation and laid off its employees. Midwest decided to shut its operation because, in part, it could not afford to shoulder the enormous costs to clean up or remediate the environmental contamination at its business site.

Midwest does not believe that it was responsible for the contamination. Rather, Midwest claims that defendant General Electric Company ("GE"), which owned and operated an adjoining carbide-product manufacturing plant in Oshtemo Township, was responsible. According to Midwest, GE allowed various toxic substances to be released from its plant to pollute the soil and groundwater underneath Midwest's business site. Further, Midwest believes that GE and co-defendant Sirrene Environmental Consultants ("Sirrene"), a firm hired by GE to investigate the contamination problem at the Midwest site, exacerbated the problem — and contributed to Midwest's demise — by engaging in a collaborative effort to conceal the nature and extent of the problem, which prevented the start of the cleanup or remediation work needed at the contaminated area.

Accordingly, Midwest and the individual Morrow plaintiffs — former employees, officers, and director of Midwest — filed this lawsuit against GE and Sirrene. Their Complaint, which has been amended, contains twelve (12) counts. The first five counts include statutory environmental claims under the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act, and the Michigan Environmental Protection Act. And the next six counts are the garden variety common law claims under strict liability tort, negligence, nuisance, trespass, and fraudulent misrepresentation and concealment theories.

The final state law count, however, is an unusual claim in an environmental action. Entitled "interference with prospective economic advantage," Count XII of the Amended Complaint is a tortious interference claim. See Amended Complaint PP176-182. It alleges that GE tortiously interfered with the individual Morrow plaintiffs' prospective business expectancies, such as income, salary, insurance benefits, and/or loan repayment from Midwest, by polluting the Midwest's business site and by failing to remediate the contaminated area promptly. According to Count XII, "but for" the tortious interference of GE, there would have been no disruption of the individual Morrow plaintiffs' expectancies.

Finding this intentional tort claim out of place in the instant action, GE now moves to dismiss Count XII under Fed. R. Civ. P. 12(b)(6).

II. Discussion

In reviewing this motion, the plaintiff's factual allegations contained in the complaint must be accepted as true. Meador v. Cabinet for Human Resources, 902 F.2d 474, 475 (6th Cir.), cert. denied, 111 S. Ct. 182 (1990). And the complaint must be construed in light most favorable to the plaintiff. Dana Corp. v. Blue Cross & Blue Shield Mutual, 900 F.2d 882, 885 (6th Cir. 1990). Indeed, a claim should be dismissed only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Warren v. Society Nat'l Bank, 905 F.2d 975, 983 (6th Cir. 1990) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)), cert. denied, 111 S. Ct. 2256 (1991).

On the other hand, such liberal federal pleading requirements do not ordinarily sanction "bare assertions of legal conclusions." Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir. 1988). Plaintiff must, instead, submit a complaint that contains "either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory." Id. (emphasis in original).

GE argues that its dismissal motion should be granted because the plaintiffs have failed to allege all the required elements of the tort of interference with prospective economic advantage under Michigan law. The court agrees.

In Michigan, the tort of interference with prospective economic advantage has been widely recognized.² But this intentional tort is typically found in cases involving some sort of competition between the parties for commercial business advantage or right. See, e.g., Bonelli v. Volkswagen of America, Inc., 166 Mich. App. 483, lv. denied, 430 Mich. 896 (1988); Trepel v. Pontiac Osteopathic Hosp., 135 Mich. App. 361 (1984); Northern Plumbing & Heating, Inc. v. Henderson Bros., Inc., 83 Mich. App. 84 (1978), lv. denied, 405 Mich. 845 (1979); Monette v. AM-7-7 Baking Co., 929 F.2d 276 (6th Cir. 1991) (applying Michigan law). And the tort has not appeared in the context of an environmental action involving two ostensibly non-competing landowners embroiled in a dispute over contamination response costs and property damage, as here.³

Nonetheless, the Michigan courts, regardless of the context of a particular case, require a plaintiff to allege the following four elements to establish a prima facie case of interference with prospective economic advantage:

(1) the existence of a valid business relation (not necessarily evidenced by an enforceable contract) or expectancy;

(2) knowledge of the relationship or expectancy on the part of the interferer;

(3) an intentional interference inducing or causing a breach of termination of the relationship or expectancy; and

(4) resultant damage to the party whose relationship or expectancy has been disrupted.

Northern Plumbing, 83 Mich. App. 93; accord Trepel, 135 Mich. App. at 374; Wilkerson v. Carlo, 101 Mich. App. 629, 632 (1980); Monette, 929 F.2d at 281.

In this case, the critical question is whether the plaintiffs have alleged the third element of the tort in their Amended Complaint. In Formall, Inc. v. Community Nat'l Bank, 166 Mich. App. 772 (1988), the Michigan Court of Appeals explained the third element as follows:

[O]ne who alleges tortious interference with a contractual or business relationship must allege the intentional doing of a per se wrongful act or the doing of a lawful act with malice and unjustified in law for the purpose of invading the contractual rights or business relationship of another.

Id. at 779 (quoting Feldman v. Green, 138 Mich. App. 360, 378 (1984)). See also Michigan Podiatric Medical Ass'n v. National Foot Care Program, Inc., 175 Mich. App. 723, 735-36, lv. denied, 433 Mich. 918 (1989). Moreover, "a plaintiff must demonstrate, with specificity, affirmative acts by the interferer which corroborate the unlawful purpose of the interference." Formall, 166 Mich. App. at 779.

Reviewing the pleading, the court does not believe that the plaintiffs have satisfied the requirement under Formall. Save for conclusory allegations, see, e.g., Amended Complaint P181, there is nothing in Count XII — or elsewhere in the Amended Complaint — directly or inferentially alleging that GE, in releasing hazardous substances which polluted the neighboring property of Midwest, acted in an intentional and improper manner to advance its purpose of invading the individual Morrow plaintiffs' prospective business [23 ELR 20301] expectancies with Midwest. Rather, the plaintiffs' best efforts in alleging the third element amount to this: the individual Morrow plaintiffs lost their expectancies "[a]s a result" of GE's contamination and delay in remediation of the contaminated area. See id. at PP178, 182. Such vague and indirect allegations, even construed in light most favorable to the plaintiffs, are not the components of an intentional tort claim under Michigan law; they hardly implicate GE's "intentional doing of a per se wrongful act or the doing of a lawful act with malice and unjustified in law for the purpose of invading the contractual rights or business relationship of another." Formall, 166 Mich. App. at 779.⁴ Plaintiffs have failed to allege the third element.

III. Conclusion

In light of the foregoing fatal flaw, there is no need to reach the parties' other arguments. GE's motion for dismissal of Count XII of the Amended Complaint (interference with prospective economic advantage claim) under Fed. R. Civ. P. 12(b)(6) is GRANTED. Count XII is hereby DISMISSED with prejudice. An order consistent with this opinion will be issued forthwith.

1. After examining the briefs and court file, the court has determined that oral argument would not materially assist the determination of this motion. See W. D. Mich L. R. 29(d) (in its discretion, the court may dispose of a motion without argument at the end of the briefing schedule). The motion is therefore submitted without oral argument.

2. The tort, however, has been referred to by various names, including: (1) "tortious interference with advantageous business relationship," see, e.g., Northern Plumbing & Heating, Inc. v. Henderson Bros., Inc., 83 Mich. App. 84, 93 (1978), lv. denied, 405 Mich. 845 (1979); (2) "tortious interference with economic relations," see, e.g., Wilkerson v. Carlo, 101 Mich. App. 629, 632 (1980); and (3) "interference with prospective advantage," see, e.g., Trepel v. Pontiac Osteopathic Hosp., 135 Mich. App. 361, 373 (1984). Further, the United States Court of Appeals for theSixth Circuit, interpreting Michigan law, has recently coined another name by calling the tort "intentional interference with prospective economic advantage." See Monette v. AM-7-7 Baking Co., 929 F.2d 276, 281 (6th Cir. 1991).

3. Nor have the plaintiffs directed the court to a single case from any jurisdiction involving this claim with analogous facts as the instant case.

4. Plaintiffs suggest that in considering the third element, the "entire sequence of events must be viewed as a whole, in other words, as a single block of conduct." Plaintiffs' Brief in Opposition at 9 (quoting Monette, 929 F.2d at 282-83). The court has done so, but find nothing that indicates that GE intentionally polluted the neighboring land of Midwest for the improper purpose of disrupting the business expectancies of the individual plaintiffs.