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Equal Employment Opportunity Commission v. M.G. Oil Co.

United States District Court, D. South Dakota, Southern Division

August 10, 2017

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,
v.
M.G. OIL COMPANY, d/b/a HAPPY JACK'S, Defendant and Third-Party Plaintiff,
v.
TESTPOINT PARAMEDICAL, LLC, Third-Party Defendant.

          ORDER GRANTING MOTION TO STRIKE AND GRANTING MOTION TO DISMISS

          KAREN E. SCHREIER, UNITED STATES DISTRICT JUDGE

         Plaintiff, the Equal Employment Opportunity Commission (EEOC), moves to strike the third-party complaint filed by M.G. Oil Company. Docket 11. Third-party defendant, TestPoint Paramedical, LLC, moves to dismiss the third-party complaint under Rules 12(b)(1) and (6). Docket 14. TestPoint joins the EEOC's motion to strike the third-party complaint. Docket 16. Defendant, M.G. Oil Company, opposes the motion to strike and the motion to dismiss. Dockets 17 and 19. For the following reasons, the EEOC's and TestPoint's motions are granted.

         FACTUAL BACKGROUND

         During the time relevant to this case, M.G. Oil had a contract with TestPoint to have TestPoint analyze M.G. Oil's drug tests of prospective new employees and inform M.G. Oil whether the test results were negative or non-negative for drugs. Docket 7 ¶ 4. M.G. Oil asserts that if the sample analysis yielded a non-negative result, then TestPoint was obligated to send the drug test to a medical review officer to determine whether the non-negative result was a consequence of the test subject taking a legal prescription drug. Id. ¶ 5. Then, if the non-negative result was due to a legal prescription drug, TestPoint would report the test results as negative to M.G. Oil. Id. ¶ 6.

         On April 8, 2013, Kim Mullaney applied for a job with Happy Jack's in Sioux Falls, South Dakota, which is owned by M.G. Oil. Docket 2 at 4. Contingent on a negative drug test result, Mullaney was offered a position with M.G. Oil. Id. On April 9, 2013, Mullaney took the drug test and it was sent to TestPoint for analysis. Docket 7 ¶ 8. TestPoint reported to M.G. Oil that Mullaney's drug test result was non-negative. Id. ¶ 9. M.G. Oil asserts there was no indication that TestPoint had not sent the drug test to a medical review officer to verify the result. Id. M.G. Oil alleges that it assumed the drug test previously had been sent to a medical review officer to determine if there was a valid legal reason for the non-negative result and based on this assumption, it rescinded its employment offer to Mullaney. Id. ¶ 10.

         Mullaney claims she is a disabled person under Sections 3 and 101(8) of the Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12102 and 12111(8). Docket 2 ¶ 14. Mullaney alleges that, after the revocation of her employment offer, she explained to M.G. Oil that the non-negative drug test results were due to her lawful use of a prescription pain killer she took for back pain. Id. ¶ 18. She also claims that, despite her explanation, M.G. Oil refused to reconsider her for the position. Id. ¶ 20. M.G. Oil asserts that before her drug test Mullaney “never indicated she had an impairment and never appeared to have an impairment.” Docket 17 at 2. M.G. Oil admits that Mullaney notified M.G. Oil of her prescription painkiller use, but asserts that it “had no way of knowing whether these claims were true.” Docket 5 ¶ 18.

         Claiming to fit the ADA's disabled person description, Mullaney filed her charge against M.G. Oil with the EEOC. Docket 2 ¶ 7. On Mullaney's behalf, the EEOC sent a conciliation letter to M.G. Oil, alerting the company to the allegedly discriminatory actions that it had taken against Mullaney and seeking appropriate relief. Id. ¶ 8. M.G. Oil and the EEOC could not reach an agreement about how to resolve Mullaney's complaint with M.G. Oil. Id. ¶ 10. After the EEOC's letter concerning Mullaney's alleged discrimination failed to resolve the dispute, the EEOC filed suit against M.G. Oil on Mullaney's behalf. Docket 5 ¶ 9; Docket 2.

         PROCEDURAL BACKGROUND

         EEOC filed suit against M.G. Oil claiming that M.G. Oil discriminated against Mullaney in violation of Title I of the ADA. Docket 2. M.G. Oil filed a third-party complaint against TestPoint, claiming that if it were found liable to Mullaney for discrimination, then TestPoint was liable to it for all (indemnification) or part (contribution) of the judgment because TestPoint breached its contract with M.G. Oil and was negligent. Docket 7. The EEOC moved to strike M.G. Oil's third-party complaint. Docket 11. TestPoint moved to dismiss M.G. Oil's third-party complaint for failure to state a claim upon which relief can be granted. Docket 14. And TestPoint moved to join EEOC's motion to strike M.G. Oil's third-party complaint. Docket 16.

         LEGAL STANDARD

         A defendant can file a third-party complaint only against a nonparty “who is or may be liable to it for all or part of the claim against it.” Fed.R.Civ.P. 14(a)(1). According to Rule 14(a), “[a]ny party may move to strike the third-party claim, to sever it, or to try it separately.” Fed.R.Civ.P. 14(a)(4). If the third-party complaint fails to state a claim upon which relief can be granted, the third-party complaint is subject to dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Fed.R.Civ.P. 12(b)(6). Also, if the third-party complaint states a claim that lacks jurisdiction, the complaint is subject to dismissal under Rule 12(b)(1). Fed.R.Civ.P. 12(b)(1). The court should accept as true the facts alleged in the third-party complaint. Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697-98 (8th Cir. 2003).

         A court may dismiss a complaint “for failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Inferences are construed in favor of the nonmoving party. Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 595 (8th Cir. 2009). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.' ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Bell Atl. Corp., 550 U.S. at 556 (2007)).

         DISCUSSION

         M.G. Oil filed a third-party complaint against TestPoint that seeks indemnification and contribution based on allegations of breach of contract and negligence. Docket 7. M.G. Oil argues that TestPoint breached its contractual duty with M.G. Oil to send non-negative drug tests to a medical review officer to determine if there is a valid legal reason for the non-negative test result. Id. ¶ 14. Because of this alleged breach, M.G. Oil argues that TestPoint is liable to it for any damages Mullaney is awarded against M.G. Oil. Id. ΒΆΒΆ 21, 23. M.G. Oil characterizes its involvement in this matter ...


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