        12-0654; 12-0918
        Gordon v. Kaleida Health; Hinterberger v. Catholic Health




                         UNITED STATES COURT OF APPEALS
                             FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION
     TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED
     AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS
     COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT
     FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX
     OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A
     PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY
     NOT REPRESENTED BY COUNSEL.

 1           At a stated term of the United States Court of Appeals
 2      for the Second Circuit, held at the Thurgood Marshall United
 3      States Courthouse, 40 Foley Square, in the City of New York,
 4      on the 21st day of August, two thousand thirteen.
 5
 6      PRESENT:
 7                   DENNIS JACOBS,
 8                        Chief Judge,
 9                   GUIDO CALABRESI,
10                   RALPH K. WINTER,
11                        Circuit Judges.
12
13      - - - - - - - - - - - - - - - - - - - -X
14      GAIL HINTERBERGER, BEVERLY WEISBECKER,
15      CYNTHIA WILLIAMS, MARCIA CARROLL, on
16      behalf of themselves and all other
17      employees similarly situated,
18
19                          Plaintiffs -Appellants,
20
21      v.                                                          12-0918
22
23      CATHOLIC HEALTH SYSTEMS, INC., JOSEPH
24      MCDONALD, MICHAEL MOLEY, CHESTNUT RIDGE
25      MEDICAL SUPPLIES, INC., CATHOLIC HEALTH
26      SYSTEM PROGRAM OF ALL INCLUSIVE CARE FOR THE
 1   ELDERLY, INC., CATHOLIC HEALTH SYSTEM
 2   CONTINUING CARE FOUNDATION, KENMORE MERCY
 3   HOSPITAL, MCAULEY SETON HOME CARE
 4   CORPORATION, MERCY HOSPITAL OF BUFFALO,
 5   NAZARETH HOME OF THE FRANCISCAN SISTERS OF
 6   THE IMMACULATE CONCEPTION, NIAGARA HOMEMAKER
 7   SERVICES, INC., SISTERS OF CHARITY HOSPITAL
 8   OF BUFFALO, NEW YORK, ST. ELIZABETH'S HOME
 9   OF LANCASTER, NEW YORK, ST. FRANCIS
10   GERIATRIC AND HEALTHCARE SERVICES, INC., ST.
11   FRANCIS HOME OF WILLIAMSVILLE, NEW YORK, ST.
12   JOSEPH HOSPITAL OF CHEEKTOWAGA, NEW YORK,
13   ST. JOSEPH'S MANOR OF OLEAN, N.Y., ST.
14   VINCENT'S HOME FOR THE AGED, ST. CLARE MANOR
15   OF LOCKPORT, N.Y., ST. LUKE MANOR OF
16   BATAVIA, N.Y., OUR LADY OF VICTORY
17   RENAISSANCE CORPORATION, CHESTNUT RIDGE
18   FAMILY PRACTICE, PLLC, ST. MARY'S MANOR,
19
20                   Defendants-Appellees.
21
22
23   - - - - - - - - - - - - - - - - - - - -X
24   CATHERINE GORDON, JAMES SCHAFFER, TERESA
25   THOMPSON, PAMELA MIKA, JENNIFER PFENTNER,
26   DIANA GALDON, on behalf of themselves
27   and all other employees similarly
28   situated,
29
30                   Plaintiffs- Appellants,
31
32   v.                                              12-0654
33
34   KALEIDA HEALTH, JAMES R. KASKIE, DAVID R.
35   WHIPPLE, MFHS MANAGED CARE, INCORPORATED,
36   FAMILY PHARMACEUTICALS, WESTLINK CORPORATION,
37   COMMUNITY MEDICAL PC, GENERAL PHYSICIANS PC,
38   MILLARD FILLMORE AMBULATORY SURGERY CENTER,
39   VISITING NURSING ASSOCIATION OF WESTERN NEW
40   YORK, INCORPORATED, VNA HOME CARE SERVICES,
41   INCORPORATED, VNA OF WNY, INCORPORATED,
42   GENERAL HOMECARE, INCORPORATED, WATERFRONT

                                        2
 1   HEALTH CARE CENTER, INCORPORATED, KALEIDA
 2   HEALTH FOUNDATION, WOMEN AND CHILDREN'S
 3   HOSPITAL OF BUFFALO FOUNDATION, KALEIDA IPA,
 4   LLC, KALEIDA MCO, LLC, GRACE MANOR HEALTH
 5   CARE FACILITY, INCORPORATED, SCHENK PHYSICAL
 6   THERAPY, PC,
 7
 8                   Defendants-Appellees.
 9
10   - - - - - - - - - - - - - - - - - - - -X
11
12   FOR APPELLANTS:                 GUY A. TALIA (J. Nelson Thomas,
13                                   Michael J. Lingle, on the
14                                   brief), Thomas & Solomon LLP,
15                                   Rochester, NY.
16
17   FOR APPELLEES:                  MARK A. MOLLOY & SUSAN C. RONEY
18                                   (Todd R. Shinaman, Joseph A.
19                                   Carello, Lynette Nogueras-
20                                   Trummer, on the brief), Nixon
21                                   Peabody LLP, Buffalo, NY.
22
23        Appeals from judgments of the United States District
24   Court for the Western District of New York (Skretny, C.J.).
25
26        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
27   AND DECREED that the judgments are AFFIRMED.
28
29        Gail Hinterberger, Beverly Weisbecker, Cynthia

30   Williams, Marcia Carroll, Catherine Gordon, James Schaffer,

31   Teresa Thompson, Pamela Mika, Jennifer Pfentner, and Diana

32   Galdon (collectively, the “employees”) appeal from the

33   judgments of the United States District Court for the

34   Western District of New York (Skretny, C.J.), denying their

35   motions to remand to state court, and dismissing their

36   complaints.    The denial of remand to state court is reviewed


                                        3
 1   de novo.     Shafii v. British Airways, PLC, 83 F.3d 566, 570

 2   (2d Cir. 1996).     The grant of a motion to dismiss is

 3   likewise reviewed de novo.     City of Omaha v. CBS Corp., 679

 4   F.3d 64, 67 (2d Cir. 2012).     Dismissal for failure to state

 5   a claim is affirmed only when “it is clear that no relief

 6   could be granted under any set of facts that could be proved

 7   consistent with [plaintiffs’] allegations.”     Commercial

 8   Cleaning Servs., L.L.C. v. Colin Serv. Sys., Inc., 271 F.3d

 9   374, 380 (2d Cir. 2001) (internal quotation marks omitted).

10   The exercise of supplemental jurisdiction is reviewed for

11   abuse of discretion.     Carlsbad Tech., Inc. v. HIF Bio, Inc.,

12   556 U.S. 635, 639 (2009).     We assume the parties’

13   familiarity with the underlying facts, the procedural

14   history, and the issues presented for review.

15       I.      RICO

16       The employees allege that their employers used a scheme

17   to cheat them out of their lawful earnings, in violation of

18   the Racketeer Influenced and Corrupt Organizations Act

19   (“RICO”).     The district court dismissed the civil RICO claim

20   with prejudice.     Hinter[b]erger v. Catholic Health Sys., No.

21   08-CV-952S, 2012 WL 125270, at *7-10 (W.D.N.Y. Jan. 17,

22   2012).     In order to state a claim under civil RICO, a


                                     4
 1   plaintiff “must allege the existence of seven constituent

 2   elements: (1) that the defendant (2) through the commission

 3   of two or more acts (3) constituting a ‘pattern’ (4) of

 4   ‘racketeering activity’ (5) directly or indirectly invests

 5   in, or maintains an interest in, or participates in (6) an

 6   ‘enterprise’ (7) the activities of which affect interstate

 7   or foreign commerce.”    Moss v. Morgan Stanley, Inc., 719

 8   F.2d 5, 16-17 (2d Cir. 1983); see 18 U.S.C. § 1962(a)-(c).

 9   This Court has recently rejected identical RICO claims

10   brought by the same class action law firm against other

11   health systems.    As in those cases, “the mailing of pay

12   stubs cannot further the fraudulent scheme because the pay

13   stubs would have revealed (not concealed) that Plaintiffs

14   were not being paid for all of their alleged compensable

15   overtime.”    See Lundy v. Catholic Health Sys. of Long Island

16   Inc., 711 F.3d 106, 119 (2d Cir. 2013); see also Nakahata v.

17   N.Y.-Presbyterian Healthcare Sys., Inc., 2013 WL 3743152, at

18   *8 (2d Cir. July 11, 2013).    The RICO cause of action was

19   properly dismissed for failure to state a claim.

20          II. State Law Claims

21          The remaining causes of action are grounded in state

22   law.    As our concurrent summary order in cases 12-0630 and


                                    5
 1   12-0670 indicates, it may be that all of the state law

 2   claims are preempted under the Labor Management Relations

 3   Act (“LMRA”).   However, we need not issue a Jacobson remand

 4   for further fact-finding here because we can affirm the

 5   dismissal of the state claims on other grounds.

 6       The employees argue that once the district court

 7   dismissed their RICO claim, it should have declined to

 8   exercise supplemental jurisdiction over their remaining

 9   claims.   We disagree.   The Supreme Court has made it

10   abundantly clear–-in a case that also involved a dismissed

11   RICO claim–-that “[a] district court’s decision whether to

12   exercise [supplemental jurisdiction over state-law claims]

13   after dismissing every claim over which it had original

14   jurisdiction is purely discretionary.”    Carlsbad Tech., 556

15   U.S. at 639 (citing 28 U.S.C. § 1367(c)).    The district

16   court’s decision to exercise supplemental jurisdiction here

17   was a wise exercise of judicial economy, not an abuse of

18   discretion.

19       The employees’ first state claim is for breach of

20   contract; however, the only clear allegation in the

21   complaint is that the health systems breached an express and

22   implied promise to “fulfill all of their obligations


                                    6
 1   pursuant to applicable state and federal law.”   See

 2   Hinter[b]erger, 2012 WL 125270, at *14 (quoting complaint).

 3   As the district court ruled, “[a] promise to perform a pre-

 4   existing legal obligation does not amount to consideration.”

 5   Murray v. Northrop Grumman Info. Tech., Inc., 444 F.3d 169,

 6   178 (2d Cir. 2006).

 7       The claims for breach of an implied covenant of good

 8   faith and fair dealing, unjust enrichment, and quantum

 9   meruit were dismissed because they are insufficiently

10   distinct from the breach of contract claim.   See Mid-Hudson

11   Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp.,

12   418 F.3d 168, 175 (2d Cir. 2005) (in quantum meruit cases, a

13   plaintiff’s ability to recover “may depend on a showing that

14   the additional [recovery sought is] so distinct from the

15   contractual duties that it would be unreasonable for the

16   defendant[s] to assume that [the provided services] were

17   rendered without expectation of further pay” (internal

18   quotation marks and revisions omitted)); Harris v. Provident

19   Life & Accident Ins. Co., 310 F.3d 73, 81 (2d Cir. 2002)

20   (“New York law . . . does not recognize a separate cause of

21   action for breach of the implied covenant of good faith and

22   fair dealing when a breach of contract claim, based upon the



                                  7
 1   same facts, is also pled.”); De La Cruz v. Caddell Dry Dock

 2   & Repair Co., Inc., 22 A.D.3d 404, 405 (N.Y. App. Div. 1st

 3   Dep’t 2005) (“The existence of an enforceable written

 4   contract covering the matter at issue precludes recovery for

 5   causes of action sounding in quasi contract.” (citations

 6   omitted)).   The employees have alleged no breach of a duty

 7   other than breach of state laws.

 8       The employees argue that their quasi-contract claims

 9   may not be duplicative because there is a credible dispute

10   over whether or not an underlying employment contract

11   actually exists.   We disagree.    The employees previously

12   alleged in their complaint that they were party to written

13   employment contracts, and the health systems have readily

14   admitted that these contracts exist.     Even now, the

15   employees point to no facts calling into question that

16   conceded allegation.   True, the employees withdrew their

17   claims construing allegations of written employment

18   contracts; whether they were withdrawn to avoid LMRA

19   preemption, see Hinter[b]erger, 2012 WL 125270, at *15, or

20   to create an illusory “dispute” about the existence of

21   employment contracts, is no matter.     Their remaining bald

22   allegations support no contractual duty extending beyond the

23   statutory requirements already binding the health systems.

                                   8
1       We have considered all of the employees’ remaining

2   arguments and find them to be without merit.   Accordingly,

3   the judgments of the district court are hereby AFFIRMED.

4
5                              FOR THE COURT:
6                              Catherine O’Hagan Wolfe, Clerk




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