Plaintiffs, Pierre Arboireau ("Pierre") and his spouse, Sandrine Arboireau ("Sandrine"), originally filed this action on January 22, 2001, against defendants, adidas-Salomon AG and adidas America, Inc., for claims relating to the relocation of Pierre Arboireau from France to Oregon for a job that ended after only six months. On August 23, 2001, plaintiffs filed an Amended Complaint, alleging the following claims: (1) misrepresentation against both defendants; (2) intentional infliction of emotional distress against both defendants; (3) negligent misrepresentation against both defendants; (4) interference with economic advantage against only adidas-Salomon AG; (5) violation of ORS 166.720(3) ("ORICO") against both defendants; (6) violation of 18 USC § 1962(c) ("RICO") against both defendants; (7) breach of contract against both defendants; and (8) promissory estoppel against both defendants.
This court has federal jurisdiction under 28 USC §§ 1331, 1332, and 18 USC § 1964. All parties have consented to allow a Magistrate Judge to enter final orders and judgment in this case in accordance with FRCP 73 and 28 USC § 636(c).
On January 29, 2002, this court granted defendants' Motion for Summary Judgment (docket #110). This opinion explains the basis for that ruling.
FRCP 56(c) authorizes summary judgment if no genuine issue exists regarding any material fact and the moving party is entitled to judgment as a matter of law. The moving party must show an absence of an issue of material fact. Celotex Corp. v. Catrett, 477 US 317, 323 (1986). Once the moving party does so, the non-moving party must go beyond the pleadings and designate specific facts showing a genuine issue for trial. Id at 324. The court must "not weigh the evidence or determine the truth of the matter, but only determines whether there is a genuine issue for trial." Balint v. Carson City, 180 F3d 1047, 1054 (9th Cir 1999). A "'scintilla of evidence,' or evidence that is 'merely colorable' or 'not significantly probative,'" does not present a genuine issue of material fact. United Steelworkers of Am. v. Phelps Dodge Corp., 865 F2d 1539, 1542 (9th Cir), cert denied, 493 US 809 (1989).
The substantive law governing a claim or defense determines whether a fact is material. T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F2d 626, 631 (9th Cir 1987). The court must view the inferences drawn from the facts in the light most favorable to the non-moving party. Thus, reasonable doubts about the existence of a factual issue should be resolved against the moving party. Id at 630-31. However, when the non-moving party's claims are factually implausible, that party must come forward with more persuasive evidence than would otherwise be required. California Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F2d 1466, 1468 (9th Cir 1987), cert denied, 484 US 1006 (1988). The Ninth Circuit has found, "No longer can it be argued that any disagreement about a material issue of fact precludes the use of summary judgment." Id.
Because all material facts must be viewed in the light most favorable to the non-movant, this court will view the evidence in the light most favorable to plaintiffs. A review of the parties' facts, as well as the other materials submitted by the parties, including affidavits, declarations, and deposition excerpts, 1 reveal the following facts.
Adidas-Salomon AG ("AG") is headquartered in Herzogenaurach, Germany ("Herzo"), and is the parent corporation of adidas America ("adidas"), which is headquartered in Beaverton, Oregon, and of Salomon SA ("Salomon"), which was acquired by AG in December 1997 and is headquartered in Annecy, France. Declaration of Jochen Eckhold ("Eckhold Dec"), ¶ 3. adidas International ("International") is not a separate corporate entity, but is a division of adidas that handles footwear and apparel marketing, product development, and logistics for customers throughout the world. Id; Pltfs' Ex 9.
Pierre and Sandrine, both French citizens, began working for Salomon in 1989 and 1993, respectively. Declaration of Philipe Gambey ("Gambey Dec"), ¶ 3; Deposition of Sandrine Arboireau ("Sandrine Depo"), Defs' Ex 2, p. 2; Declaration of Sandrine Arboireau ("Sandrine Dec"), ¶ 2. Pierre "had a dream of living and working in the United States" and had expressed to Salomon his desire for an international position for at least seven years. Declaration of Pierre Arboireau ("Pierre Dec"), ¶ 21; Gambey Dec, ¶ 3.
Yannick Morat ("Morat"), also a French citizen, began working for Salomon in 1994. October 30, 2001, Declaration of Yannick Morat ("Morat 1st Dec"), ¶¶ 1-2. Around February 1999, Morat moved to Oregon and began working at International as Head of Worldwide Costing for Footwear (the "Position"). Id at ¶ 2; Pltfs' Ex 14, p. 1. No one explained to him what "at will employment" meant, but he signed an employment agreement that defined and included at-will employment terms. November 19, 2001 Declaration of Morat ("Morat 2nd Dec"), ¶ 3; Pltfs' Ex 14. Morat's supervisor was Brian Mignano ("Mignano"), then Head of Footwear Logistics. Morat 1st Dec, ¶ 2. Around July 1999, Morat decided to return to France and asked Pierre if he was interested in the Position. Morat 2nd Dec, ¶ 5.
Job security was important for the plaintiffs, particularly since they would be moving their two children and Sandrine would be taking a three year leave of absence from her legal career at Salomon and foregoing her pension benefits. Pierre Dec, ¶ 5; Sandrine Dec, ¶¶ 12, 15. Morat believed that the Position was secure and "too important" to be eliminated unless Pierre "did a really bad job" and had prior warning. Morat 2nd Dec, ¶ 8; Sandrine Dec, ¶ 9. Plaintiffs were "emotionally stable and happy" in France when "adidas encouraged [them] to believe that living in the United States would enrich [their] lives." Sandrine Dec, ¶ 15.
In late August 1999, Pierre flew to Oregon and interviewed for the Position. Deposition of Pierre Arboireau ("Pierre Depo"), Defs' Ex 1 and Pltfs' Ex 27, p. 9. During one of several interviews, Mignano expressed dissatisfaction to Pierre over Morat's decision to leave International after only a few months and stated that he wanted at least a two or possibly three year commitment from Pierre. Id at 30. While Mignano did not use the words "guarantee" or "promise," Pierre believed that adidas wanted to hire him for a minimum of two years, but expected him to stay for three years. Id at 32, 44; Pierre Dec, ¶ 3. Mignano wanted to fill the Position quickly and never mentioned the possibility of it moving to Germany during the interview. Pierre Depo, pp. 59, 285-86. Pierre requested a severance provision, but Mignano refused. Id at 77, 93. Klaus Flock of AG interviewed Pierre separately. Id at 27-28, 35-36.
Mignano knew that Pierre "did not have extensive costing experience," but believed that Pierre would bring a "different perspective" and that his Salomon background "would assist in the continuing efforts to integrate Salomon into the adidas family." Declaration of Brian Mignano ("Mignano Dec"), ¶ 4; Deposition of Brian Mignano ("Mignano Depo"), Defs' Ex 3, p. 95. Mignano notified his supervisor, Glenn Bennett ("Bennett"), Executive Vice President of adidas, that he intended to offer the Position to Pierre. Mignano Dec, ¶ 5. Bennett agreed. Id; Deposition of Glenn Bennett ("Bennett Depo"), Defs' Ex 4, p. 148.
On September 3, 1999, Mignano called Pierre in France and offered him the Position. Pierre Depo, pp. 42-43. Although Mignano asked Pierre to commit to remaining in the Position for at least 24 months, he did not guarantee or promise Pierre that he would have the Position for at least 24 months. Id at 44. During this conversation, Mignano advised Pierre that adidas would pay an annual salary of $110,000, relocation expenses, and plane tickets for the Arboireau family to return to France annually. Id at 43-44; Pltfs' Ex 5. Mignano emailed Pierre that day, stating that Yvonne Valentino ("Valentino"), International's Human Resource Manager, would send "a letter outlining the proposal in more detail" and asking Pierre to call "to discuss any concerns you may have." Defs' Ex 9, p. 1.
On September 7, 1999, Pierre emailed Mignano accepting his offer and summarizing his understanding of the terms, including "Minimum duration: 24 months." Defs' Ex 7. In his response the very next day, Mignano emailed Pierre a "preliminary proposal" which still needed verification from "HR and legal." Defs' Ex 6. Also on that same day, Valentino emailed Pierre an attached immigration questionnaire necessary for obtaining visas for himself and his family. Defs' Ex 8. On September 14, 1999, Pierre returned to Valentino by email the completed questionnaire. Pierre Depo, pp. 79-80; Defs' Ex 9.
On September 17, 1999, Valentino emailed Pierre an offer letter that she had "finalized . . . based upon the agreement that you have made with [Mignano]." Defs' Ex 10 ("Offer Letter"). This Offer Letter contained the following terms concerning at-will employment:
Since your employment with adidas AMERICA is considered "at-will" employment, you may terminate your employment at any time or the Company may terminate your employment at anytime. Should your termination by the Company result for reasons other than "For Cause" or if you were to be transferred to another adidas location or Company affiliate, then the Company will agree to pay you a severance amount equal to six (6) months salary continuation at your current rate of pay.
adidas wishes to make it explicitly clear that adidas' support or sponsorship in obtaining any U.S. visa for you does not create any obligation on the part of adidas with regards to your future employment. While it is our intent at this time to keep you in our employ for some time, we cannot guarantee any specific length of employment, just as with any "at will" U.S. employee. If, for whatever reason, your employment terminates, adidas will have no further obligation, responsibility or liability in connection with your immigration status.
Should you voluntarily leave the Company within twenty-four (24) months of your employment date, you will be responsible for, and agree to, reimburse the Company for all charges associated with your relocation. Should you voluntarily leave the Company between twenty-four (24) and thirty-six (36) months after your employment date, you will be responsible, and agree, to reimburse the Company on a pro-rated basis for costs associated with your relocation. The Company will pay for returning your househould goods (at 110% of the weight of the original shipment) and return travel to your country of origin if your employment terminates through no fault of your own or because you are unable to remain in the U.S. due to U.S. Immigration laws.
This letter is provided as confirmation of information previously given to you verbally. It is not to be construed as a contract of employment beyond the terms outlined herein. Please feel free to contact me should you have any questions concerning this letter, the offer to which it refers, or any other aspect of adidas AMERICA. . . . With your signature in the space provided below, please indicate your agreement with, and acceptance of, the terms and conditions set forth in this letter. . . . Defs' Ex 13, p. 1.
No one explained to Pierre what at-will "employment" meant and in France, an employee can only be terminated immediately if they make a serious mistake, such as stealing. Sandrine Dec, ¶ 9.
Upon reviewing the Offer Letter, Pierre emailed Valentino three days later asking sophisticated questions relating to the Offer Letter, including: (1) whether he would be eligible for a stock option program, "as I was told by [Mignano];" (2) the duration of paid vacation; (2) whether he was required to participate in a 401(k); (3) what his social security contribution would be; (4) what his net salary would be; (5) the details of his medical, dental, and vision coverage; and (6) a request for the employee handbook "talked about in the offer . . . ." Defs' Ex 11. With respect to the stock option request, Mignano informed Pierre on September 24, 1999, by email that he could not include the stock options in the Offer Letter because the program, including who would be eligible to participate, had not been finalized. Id at 1. Pierre responded by email the same day, stating "Ok, I've well noted that! I understand you can't promize [sic] but I really expect it's possible." Id.
On October 12, 1999, Pierre advised Mignano and Valentino by email that he still had not received the Offer Letter and stated that: "Yvonne provides me with many [sic] information regarding paid vacation, the 401K program, gross net calculation of my revenue and I thank her very much for that. The only thing which is missing is the content of the health benefits package we are eligible to [sic] and the employee handbook." Defs' Ex 12. Later that day, Valentino notified Pierre by email that she put together a packet containing the Offer Letter, a non-competition agreement, an employee handbook, and 401(k) and medical information, and would send it that day. Id. The non-competition agreement Valentino sent to Pierre includes the following at-will language: "Employee's employment with Company is at-will meaning Employee may voluntarily quit at any time for any reason and Company may terminate Employee at any time with or without cause. This Agreement does not alter the at-will nature of Employee's Employment." Defs' Ex 14.
On October 22, 1999, after Sandrine's review, Pierre executed and returned to Valentino the Offer Letter and non-competition agreement. Defs' Exs 13, 14; Pierre Depo, pp. 69-70, 135.
IV. Transfer Policy
In September and October 1999, there was no international transfer policy among adidas, AG, and Salomon. Gambey Dec, ¶ 5. Salomon was still using transfer policies that predated its merger with AG; AG had developed transfer "guidelines;" and adidas had an entirely different set of policies. Id. Thus, at the time of Pierre's departure, there was a miscommunication between the companies over the resulting obligations to pay Pierre, and Salomon had agreed to provide Pierre with French social security, unemployment, retirement and medical insurance benefits. Gambey Dec, ¶ 7.
On October 20, 1999, Valentino notified Salomon's Human Resources Department by email that adidas had already made Pierre "a fair offer [that] is in compliance with our transfer policy. We did go out of the policy and offer[ed] Pierre a severance agreement as an 'at will' employee which is more than we would normally consider." Defs' Ex 15, pp. 1-2. Later that day, Mignano added, "I've made it very clear to Pierre that his compensation package outlined in the offer letter is complete, and there will be no other compensation other than bonus and/or stock options for which he may or may not be eligible." Id at 1. Mignano's position "caused a great deal of consternation between adidas and Salomon." Gambey Dec, ¶ 8. In fact, Mignano went so far as to involve AG's Global Head of Human Resources, Matthias Malessa, in the general transfer policy dispute, informing him that Pierre's situation had illustrated numerous problems and inconsistencies in these various global transfer policies. Defs' Ex 16.
On December 7, 1999, adidas sent Pierre a copy of the petition and supporting documents submitted to the Immigration and Naturalization Service to obtain Blanket L-1 visas for Pierre and his family. Pierre Depo, p. 300; Defs' Ex 17.
V. The Position
Pierre's first day at work in Oregon was January 5, 2000. Pierre Depo, p. 149. In late February 2000, Pierre traveled to Asia on business for approximately three weeks. Id at 150. While there, Jay Pollard ("Pollard") and Patrick Nielsen, employees of AG, met with Pierre and told him that there was pressure to move the Position to Germany. Id at 156. Germany lacked the costing support and services "needed to achieve the margin objectives of the company." Deposition of Bob Shorrock ("Shorrock Depo"), Defs' Ex 5, p. 27.
In November 1999, Herbert Hainer ("Hainer") became AG's Deputy CEO. Bennett Depo, p. 58. At the end of January 2000, Hainer presented his "Growth and Efficiency Plan" (the "Plan") to AG's Executive Board (the "Board"). Id at 63. The Plan was a series of seven to nine initiatives designed to "effectively streamline the company and gain control over costs." Id. Bennett, an AG Board member since March 1997, was assigned responsibility for two of Hainer's initiatives (the Global Supply Network and International Sourcing), neither of which targeted footwear operations. Id at 43, 76-77, 89; Declaration of Glenn Bennett ("Bennett Dec"), ¶ 3.
In mid-February 2000, informal discussions began regarding the possibility that Bennett assume the additional responsibility of United States apparel from Gary Peck ("Peck"). Bennett Depo, pp. 63, 78-79. On March 23, 2000, Bennett assumed this new role which, in turn, necessitated restructuring of the operations group. Id at 76, 78-79. At the time, Bennett had five direct reports, including Mignano as Head of Footwear Logistics, Shorrock as Head of Footwear Sourcing, and Steve Burris ("Burris") in Herzo as Head of Footwear Development. Id at 92, 105. Bennett planned to create a new single Head of Footwear Operations position that would report to him and that would supervise the heads of logistics, sourcing, and development. Defs' Ex 18. Throughout most of the early stages of his planning, Bennett had Burris in mind for Head of Footwear Operations. Bennett Depo, p. 105. Ultimately, Bennett changed his mind and offered the position to Shorrock, who accepted in early May, 2000. Id at 130; Bennett Dec, ¶ 4. In April and May, 2000, Bennett's reorganization plan still did not affect Pierre's Position, either in terms of where the Position would be located or who held it. Id; Defs' Exs 19, 20.
The new organizational structure took effect on June 1, 2000, when Shorrock became Head of Footwear Operations and Pierre's supervisor. Shorrock Depo, pp. 12-13.
Once Shorrock became Head of Footwear Operations, he revised Bennett's proposed organizational structure by combining two positions in the project management division into one. Shorrock Depo, pp. 5-6. Steve Horton held the project management position in Oregon and Pollard held the project management position in Germany. Id. Shorrock offered the new merged position to Horton in Oregon. Id at 6. This decision left Pollard without a job. Due to complaints received from employees in Herzo regarding the costing department, Shorrock believed that Pierre was ill-suited for the Position due to his limited experience in costing, footwear, and Asian manufacturing, and therefore offered Pollard the Position in Germany. Id at 5, 21, 27-28; Pollard Dec, ¶¶ 2-4.
On June 9, 2000, Shorrock met with Pierre and a HR representative in his office. Shorrock Depo, pp. 60-61. Shorrock told Pierre that he was terminating him, effective June 22, 2000. Pierre Depo, pp. 183-84.
Early the following week, Shorrock traveled to Herzo to meet with Pollard and told him that he was offering Horton the merged project management job and then offered Pierre's Position to Pollard. Declaration of Jay Pollard ("Pollard Dec"), ¶ 4. Although disappointed by Shorrock's decision, which he considered a demotion, Pollard accepted. Id.
Pierre's employment was extended until July 28, 2000. Defs' Exs 21, 22. adidas paid him all accrued but unpaid flexible time off and vacation time, which effectively paid him through August 21, 2000. Eckhold Dec, ¶ 5. On August 12, 2000, Janice McCaffrey, Valentino's successor, emailed Pierre a draft severance agreement. Defs' Ex 23. In addition to the six months' severance pay provided by the Offer Letter, the draft severance agreement also provided six months' paid COBRA premiums. Id. By letter dated September 18, 2000, Pierre's attorney responded to McCaffrey's email, contending that adidas could not condition Pierre's severance payment on execution of a release. Defs' Ex 24. adidas acknowledged that Pierre was entitled to the severance payment without executing a release, and on September 11, 2000, made a lump sum payment to him in the amount of $55,000. Pierre Depo, p. 243. adidas also paid Pierre's return moving expenses, totaling approximately $43,300, and $10,000 for outplacement services. Eckhold Dec, ¶ 5; Gambey Dec, ¶ 10.
Defendants seek summary judgment against all of plaintiffs' claims. For the reasons that follow, defendants' motion is granted.
I. Breach of Contract (Motion 1)
Plaintiffs' Seventh Claim alleges that Pierre and Mignano orally agreed to a contract for a definite term of three years, which defendants breached by firing Pierre without cause after only six months. Defendants argue that this breach of contract claim fails against AG because AG was not a party to the contract and fails as to both defendants because Pierre assented to and signed the Offer Letter which clearly defines the terms of his at-will employment relationship with adidas. As discussed below, this court concludes that the undisputed facts entitle defendants to summary judgment against this claim.
A. At-Will Employment
Absent a contractual, statutory or constitutional requirement to the contrary, an employment contract in Oregon is presumed to be at-will, which means that an employee can quit or be fired for any reason. Banaitis v. Mitsubishi Bank, Ltd., 129 Or App 371, 376, 879 P2d 1288, 1293 (1994). Therefore, unless defendants agreed otherwise, Pierre's employment is at-will. Here the documents signed by Pierre clearly evidence an at-will employment relationship.
The Offer Letter dated September 13, 1999, which Pierre "agreed and accepted" by signing on October 22, 1999, unequivocally states that Pierre's employment is "at-will:"
Since your employment with adidas AMERICA is considered "at-will" employment, you may terminate your employment at any time or the Company may terminate your employment at anytime.
While it is our intent at this time to keep you in our employ for some time, we cannot guarantee any specific length of employment, just as with any "at will" U.S. employee.
This letter is provided as confirmation of information previously given to you verbally. It is not to be construed as a contract of employment beyond the terms outlined herein. Defs' Ex 13.
Pierre also signed adidas' non-competition agreement on October 22, 1999, which clearly states that his employment is "at-will meaning Employee may voluntarily quit at any time for any reason and Company may terminate Employee at any time with or without cause. This Agreement does not alter the at-will nature of Employee's Employment." Defs' Ex 14.
However, Pierre argues that his employment agreement is not evidenced by these documents. Instead, he argues that his employment agreement is for a minimum of two years as evidenced by Mignano's oral offer and email on September 3, 1999, which Pierre accepted by email on September 7, 1999, and by the later documents which did not alter this duration of employment. That argument has no legal or factual support.
It is well-settled that in Oregon:
The acceptance of an offer for a promise must . . . correspond to the offer at every point, leaving nothing open for future negotiations. . . . [W]here the offeree imposes an additional condition to those contained in the offer, or makes a counter offer or conditional acceptance which amounts to a counter offer, or makes an attempted acceptance which seeks to modify one or more of the terms of the offer, this operates as a rejection of the original offer. C.R. Shaw Wholesale Co. v. Hackbarth, 102 Or 80, 95-96, 201 P 1066, 1067 (1921).
Pierre's September 7, 1999, email was not an acceptance that formed a binding and enforceable contract, but was the beginning of negotiations concerning the terms of his employment. The email states that Pierre "accept[s] your proposal for the position of the WW Costing Head," and then summarizes the terms as he understood them, including the term "Minimum duration: 24 months." Pltfs' Ex 19. This email explicitly acknowledges that Pierre's summary is "not an exhaustive list" and that he awaits "the confirmation letter from Portland Human Resources you told me about." Id.
Although Pierre purports to accept Mignano's offer, including a minimum duration of two years, Pierre concedes that Mignano never promised Pierre the Position for at least two years. Pierre Depo, p. 44. Instead, Mignano sought a commitment from Pierre to stay in the Position for at least two years. Therefore, Pierre's referral to "Minimum duration: 24 months" is either an attempted modification of Mignano's offer or merely a confirmation of Pierre's commitment to stay in the Position for two years. Furthermore, the same day Mignano extended the oral offer, he sent an email stating that Valentino "will send . . . a letter outlining the proposal in more detail." Defs' Ex 9, p. 1. Therefore, Mignano's oral offer clearly was not intended to include all of the material employment terms. Even more telling, a banter of email communications followed Pierre's purported acceptance, including:
(1) Mignano's "preliminary proposal" attachment that still needed to be cleared "with HR and legal;" (2) Valentino's update that she was "putting together the formal offer" and request for Pierre to complete an attached questionnaire necessary for his "visa paperwork;" (3) Pierre's completed questionnaire; (4) Valentino's "finalized offer letter based on the agreement . . . made with [Mignano];" (5) Pierre's questions regarding the stock option program, paid vacation, 401(k), social security, net salary, and medical coverage; (6) Mignano's response to Pierre's request for stock options; (7) Pierre's reply that "I understand you can't promize [sic], but I really expect it's possible;" (8) Pierre's request for the status on his "offer letter;" and (9) Valentino's response that she was sending the Offer Letter, non-competition agreement, all other documents that he needed to sign, and the employee handbook, medical, and 401(k) information. Defs' Exs 6, 8-12, 15.
It is clear that Pierre closely scrutinized the Offer Letter that Valentino emailed to him on September 17, 1999, since he subsequently emailed Valentino sophisticated questions relating to the Offer Letter, including a September 20, 1999, email asking for a confirmation that he would be eligible for a stock option program, "as I was told by [Mignano]." Defs' Ex 11. Curiously, despite his close attention to other terms, Pierre never inquired into a two year minimum duration term which was absent from the Offer Letter. While Pierre alleges that he does not have a strong command of the English language and was unaware of at-will employment contracts prevalent in the United States, he was advised to call, and did email, adidas with other questions and concerns. See Defs' Exs 13, pp. 3, 11. This evidence leads to only one reasonable conclusion, namely that prior to signing the Offer Letter on October 22, 1999, Pierre was negotiating, but had not yet agreed to the terms of his employment agreement.
The Offer Letter plainly defines at-will employment and includes a merger clause which indicates that the terms of Pierre's employment contract do not extend beyond those defined within the instrument. Defs' Ex 13. Pierre "agreed and accepted" these terms when he signed the Offer Letter. Id.
In fact, Pierre relied on the terms of the Offer Letter, rather than on his oral discussions with Mignano, when he later enforced its severance provision in order to obtain approximately $55,000 in severance benefits. Pierre Depo, p. 243.
Nevertheless, Pierre asserts that, based on his communications with Valentino, he "understood" that he had to sign the Offer Letter in order to obtain a visa and that he would have a new employment contract once he arrived in Portland. Pierre Dec, ¶¶ 11-13. No evidence supports that assertion. Rather, the evidence is clearly to the contrary.
Valentino's first email to Pierre on September 8, 1999, attached only the visa questionnaire which Pierre completed and emailed to Valentino three days before Valentino emailed him the Offer Letter. Defs' Exs 9, 10. Additionally, eight days before signing the Offer Letter, Pierre's October 12, 1999, email to Valentino requests the status of his visa application. Defs' Ex 12. Valentino responded by email that "for the immigration process," she still needed: (1) a copy of every page of each applicant's passport; (2) a copy of Pierre's university diploma and transcripts, translated into English; (3) an organizational chart detailing Pierre's Position in Salomon, including those he supervised and where his Position fell within the Salomon organization; and (4) each passport applicant's height, weight, color of eyes and color of hair. Defs' Ex 12. Noticeably absent from Valentino's list and the voluminous record is any suggestion that Pierre had to sign the Offer Letter in order to obtain these visas.
Moreover, Pierre's alleged subjective misunderstanding of the contract terms due to a language barrier cannot supersede the clear terms of the contractual documents. Under Oregon's objective theory of contract interpretation,
whether the parties entered into an agreement does not depend on whether the parties had the same subjective understanding of their agreement, that is, on whether their "minds met" on the same understanding. Rather, it depends on whether the parties agreed to the same, express terms of the agreement and on whether those terms constitute an enforceable agreement. City of Canby v. Rinkes, 136 Or App 602, 611, 902 P2d 605, 610 (1995).
Given that Pierre had no communications with Valentino outside of the above email correspondence, nothing in the record supports his subjective belief that it was necessary to sign the Offer Letter in order to obtain a visa.
Despite its clear terms concerning at-will employment, Pierre also argues that the Offer Letter cannot bind him to a definite term without also binding defendants to the same definite term. Pierre's interpretation is overly ambitious. Given the substantial investment in moving an employee overseas, adidas reasonably expected assurances that Pierre would stay longer than Morat's six months. However, such assurances do not rise to a mutual binding promise when the parties sign an unambiguous contract that reflects the complete terms of the employment agreement.
The Offer Letter contains clear language concerning at-will employment that is not obfuscated or befuddled by any later discussions or provisions. If Pierre was confused about the duration of employment in Mignano's oral offer, he had no reason to be confused after he received the Offer Letter. The Offer Letter does not obligate Pierre to work for any minimum period of time, although Pierre agreed to reimburse certain expenses if he departed within 24 months or 36 months. It also unambiguously allows adidas to terminate Pierre at any time without cause as long as adidas pays a severance amount equal to six months' salary. A severance payment is unnecessary if Pierre could be terminated only with cause.
Pierre's subjective belief that the contract was a one-way relationship, allowing him to voluntarily quit but not be terminated without cause, cannot override the objective and unambiguous terms of at-will employment found in both the Offer Letter and the non-competition agreement that he signed. The language in the Offer Letter and the non-competition agreement clearly define at-will employment and state that his employment is limited to their terms. Accordingly, Pierre agreed to at-will employment and defendants' Motion 1 is granted as to the breach of contract claim.
B. AG as a Proper Party
Defendants also argue that AG is entitled to summary judgment because it was not a party to the employment contract. Because this court concludes that the breach of contract claim fails on its merits, it need not address defendants' alternative argument.
II. Promissory Estoppel (Motion 2)
Defendants argue that plaintiffs' Eighth Claim for promissory estoppel claim fails based on a lack of evidence of an alleged promise and recoverable damages. Plaintiffs do not respond to these arguments.
It is well-settled that a promissory estoppel claim requires the court to determine that traditional contract remedies are unavailable. Neiss v. Ehlers, 135 Or App 218, 226-27, 899 P2d 700, 705-06 (1995). As discussed above, the Offer Letter is an enforceable contract. The fact that plaintiffs' breach of contract claim fails on the merits does not give rise to a promissory estoppel claim. Accordingly, defendants are entitled to summary judgment on Motion 2.
III. Misrepresentation (Motion 3)
Plaintiffs' First Claim alleges that defendants are liable for fraudulently inducing Pierre to enter into an at-will employment contract by failing to disclose the reorganization plan which eliminated the Position as well as the instability of the Position. Defendants contend that this claim fails because adidas did not actively conceal any material fact and the employment relationship created no special or fiduciary duty to disclose any material fact.
As discussed below, this court concludes that defendants did not fail to disclose the reorganization plan at the time that Pierre was hired. Additionally, there is no genuine issue of material fact as to whether defendants intentionally concealed the stability of the Position.
A. Legal Standards
To prevail on a misrepresentation claim, a plaintiff must prove with clear and convincing evidence each of the following elements: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of the representation's falsity or ignorance of its truth; (5) the speaker's intent that the representation be acted on in a manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) the hearer's reliance on its truth; (8) the hearer's right to rely on the alleged representations; and (9) damages. In re Conduct of Brown, 326 Or 582, 956 P2d 188 (1998); Riley Hill Gen. Contractor, Inc. v. Tandy Corp., 303 Or 390, 737 P2d 595 (1987).
"[N]ondisclosure of material facts can be a form of misrepresentation where the defendant . . . has made representations that would be misleading without full disclosure." Meade v. Cedarapids, Inc., 164 F3d 1218, 1122 (9th Cir 1999) (applying Oregon law). When a misrepresentation claim is based on failure to disclose a material fact, the plaintiff must show that: (1) the defendant made a misleading representation in the nature of a "half-truth;" or (2) the defendant remained silent when he had a duty to speak. Gregory v. Novak, 121 Or App 651, 654-55, 855 P2d 1142, 1143-44 (1993).
Nondisclosure is distinguishable from active concealment. "Restatement (Second) of Torts . . . states that nondisclosure is actionable where there is a duty to speak, but notes no such duty requirement where there has been an active concealment." Paul v. Kelley, 42 Or App 61, 65 599 P2d 1236, 1238 (1979).
B. Failure to Disclose the Reorganization Plan
Plaintiffs allege a misrepresentation based on defendants' failure to disclose a reorganization plan that "had the potential for moving the costing position to Germany." Amended Complaint, ¶ 21. To succeed on this claim, plaintiffs must prove by clear and convincing evidence that when offering Pierre the Position, defendants knew that it likely would be moved to Germany or be eliminated as a result of a future reorganization.
Plaintiffs fail to produce any evidence that either defendant intended to move the Position to Germany in October 1999, when Pierre signed the Offer Letter. Instead, the evidence clearly indicates that, similar to musical chairs, Pierre lost his job due to a series of management reshuffling. The chain of events leading up to Pierre's termination did not begin until January 2000, when Hainer introduced a series of initiatives to streamline AG. In early February 2000, informal discussions began regarding the possibility of Bennett taking over the responsibility of United States apparel from Peck. The discussions remained theoretical for weeks because it was unclear whether Peck would in fact be leaving his position. It was not until March 23, 2000, three months after Pierre had been working in Oregon, that Bennett was formally notified of his new responsibilities.
The added responsibilities required Bennett to reconsider his organizational structure, thus beginning his managerial restructuring. However, this restructuring had no direct implication on Pierre's Position until late April 2000, when Bennett decided to hire Shorrock for a new position, Head of Footwear Operations. Once Shorrock accepted this new position in early May 2000, he began to revise Bennett's proposed organizational restructure as it related to his group. He decided to merge two project management positions in Germany and Oregon and gave the position to one (Horton in Oregon), thereby leaving the other without a job (Pollard in Germany). However, rather than terminate Pollard, Shorrock chose to demote him by offering him Pierre's Position and moving it to Germany. The new organizational structure took effect on June 1, 2000. On June 9, 2000, six months after plaintiffs relocated to Portland, Shorrock told Pierre that he was terminated, effective June 22, 2000.
No evidence indicates or leads to the inference that the plan to terminate Pierre or relocate the Position to Germany was hatched before Pierre agreed to move to Oregon. Defendants cannot be liable for failing to disclose a plan that was not yet in existence. Thus, summary judgment is appropriate on plaintiffs' misrepresentation claim relating to the reorganization plan.
C. Stability and Duration of Employment
Plaintiffs' misrepresentation claim also is premised on defendants' failure to disclose the stability and duration of Pierre's employment in the United States when adidas knew that job security was a vital issue to them. Plaintiffs base this theory on four facts. First, during Pierre's August 1999 interview, Mignano knew that, unlike the United States, at-will employment was unknown to European employees, but failed to discuss the difference with Pierre. Second, Mignano was aware of the constant pressure to move the Position to Germany, but never told Pierre. Third, Mignano knew that there was a high turnover rate among management in Portland, but failed to tell Pierre. Finally, the visa application represents that Pierre's employment was supposed to be for a three year term.
1. Employment Differences Between Europe and United States
Mignano knew that employment relationships were different in Europe and the United States and did not discuss that fact with Pierre. Mignano Depo, p. 40. However, he never affirmatively misrepresented to Pierre that the two were the same. To the contrary, the clear language in the Offer Letter and the non-competition agreement define at-will employment in the United States. Pierre may have misunderstood what at-will employment means, but he never communicated his own understanding to Mignano or anyone else. Mignano could be liable if he intended to induce Pierre to sign the Offer Letter by failing to explain what he knew Pierre did not understand. However, given Pierre's failure to question the at-will terms, in contrast to his many questions regarding other terms, Mignano had no reason to know that Pierre was confused. Thus, according to the undisputed facts, Mignano made no false representation to Pierre, either by a misstatement, half-truth or intentional silence, that Pierre's employment could be terminated only for cause as in Europe.
2. Constant Pressure to Move the Position to Germany
According to plaintiffs, Mignano knew but failed to disclose the material fact that "there was constant pressure to move [the Position] to one location or another" (Mignano Depo, p. 14) despite Pierre's concern for job security. Mignano knew of Pierre's need for job security since Sandrine was putting her career with Solomon on hold for Pierre's transfer and plaintiffs were moving with children. Furthermore, Mignano needed to fill the Position fast, providing an incentive for his failure to disclose.
Plaintiffs claim that they never would have agreed to move to Portland had they known of this potential lack of job security.
Although Mignano testified that he was aware of constant pressure to move the Position to Germany, plaintiffs provide no evidence that at the time that he offered the Position to Pierre, he had any reason to believe that it would move to Germany within two or three years. Plaintiffs' argument is premised on pure speculation contradicted by undisputed facts.
Pierre first learned of the pressure to move the Position to Germany from Pollard and others while on a business trip in China in late February 2000. Since Pollard knew of pressure to move the Position to Germany, plaintiffs argue that Mignano also had to have known because he was responsible for and supervised the Position. As further evidence of Mignano's knowledge, plaintiffs point to his vague response to Pierre's questions in late February 2000 about moving the Position to Germany. Pierre Depo, p. 162.
However, the critical time period for plaintiffs' claim is when adidas recruited and hired Pierre. As discussed above, in September or October 1999, defendants had made no decision concerning the future of the Position. Even Pierre's predecessor, Morat, reassured Pierre that the Position was secure, believing that "this particular position was too important." Morat 2nd Dec, ¶ 8. However, by late February 2000, when Pierre heard the comments from Pollard and others, the situation had changed dramatically because Hainer had presented his new plan to AG's Board in January 2000.
Moreover, Mignano had no reason to know that Pierre would not agree to move to Portland for less than two or three years. Although Mignano knew that Pierre's move would adversely impact Sandrine, Pierre never told Mignano that he would not accept the Position for less than two years. Mignano's duty to speak cannot be based upon Pierre's unexpressed thought.
Besides, Shorrock, not Mignano, terminated Pierre. To prevail, plaintiffs have to prove the existence of a conspiracy between Bennett, Shorrock, or Mignano. Mignano would have to have known in the fall of 1999 that Bennett would hire Shorrock as Head of Footwear Operations, that Shorrock would institute a restructuring that would eliminate Pollard's position, and that Pollard would accept a demotion to the Position. Based on this knowledge, Mignano hired Pierre as nothing more than a temporary expedient until Pollard became available. The undisputed facts do not support such a conspiracy theory by a preponderance of the evidence, let alone by clear and convincing evidence.
Plaintiffs' claim is based primarily on Meade v. Cedarapids, Inc., 164 F3d 1218 (9th Cir 1999). In Meade, plaintiffs sued their former employer for misrepresentation after losing their jobs a few months after moving to Eugene, Oregon, when the employer closed its facility. Plaintiffs claimed that their decision to move to Eugene was based on the assurances by personnel employees during the recruiting process that the Eugene facility was growing, sales were up, they were hiring more people, the company was stable, and the future looked good. Id at 1221. Plaintiffs presented evidence that at the time these representations were made, unbeknownst to the personnel employees, the employer had already made a decision to close the Eugene facility that directly caused their job loss. Plaintiffs would not have taken the jobs had they known of this decision. Id at 1220-22. The Ninth Circuit held that a factual dispute over when the employer decided to close the Eugene facility precluded summary judgment. Id at 1222.
This case is distinguishable from Meade. Here, unlike Meade, Mignano made no assurances to Pierre that he would have any job security. Moreover, Mignano had no reason to know in the fall of 1999 that the Position was be moved to Germany in less than two or three years since no reorganization plan was then in progress. Instead, plaintiffs' claim is premised on, at best, a nondisclosure by a person who had nothing material to disclose.
3. High Turnover in Management
Plaintiffs also complain that Mignano never disclosed that management positions in Oregon were volatile. However, according to defendants' management chart, adidas did not have a high turnover rate in management positions in Oregon. Out of approximately 54 managers with hire dates going back to 1987, excluding Pierre, only three were terminated or discharged and three were eliminated due to staff reduction/layoffs. Defs' Ex 26. There is no evidence that Oregon had a high turnover rate when Pierre was being hired in the fall of 1999, particularly since prior to February 2000, the last manager to be eliminated was in April 1998. Id. Thus, Mignano had no duty to disclose to Pierre the stability of managerial positions in Oregon because no evidence supports an unusually high turnover rate.
4. Visa Application
Lastly, plaintiffs allege that the visa documents did not disclose that Pierre's employment term was at-will, but instead represented that adidas intended Pierre's employment to last three years.
It is difficult to grasp how statements made in visa documents could have any affect on the nature of an unambiguous contract. See Van Heerden v. Total Petroleum, Inc., 942 F Supp 468, 472 (D Co 1996). Additionally, the standard among immigration attorneys is to complete Blanket L-1 visa applications seeking an initial three-year period to avoid refiling the application every year. Declaration of Robert W. Donaldson, ¶ 5. The INS does not inquire as to whether the anticipated employment is at-will or for a definite term, but rather asks "how long do you plan to stay in the U.S.A.?" Defs' Ex 2, p. 7. Furthermore, in a letter to the Chief of Nonimmigrant Visas in France, adidas indicated that "[a]t present, we anticipate that this will be for a period of three years." Defs' Ex 2, p. 25 (emphasis added). This is quite different from stating unequivocally that Pierre's employment term would be for three years.
Plaintiffs have provided no evidence that the visa materials submitted on Pierre's behalf varied from the standard practice, nor is there evidence of fraud. Accordingly, no misrepresentation claim can be based on the visa documents.
IV. Negligent Misrepresentation (Motion 4)
The Third Claim alleges negligent misrepresentation. Negligent misrepresentation is limited to those claims where one party in a relationship owes a duty "beyond the common law duty to exercise reasonable care to prevent foreseeable harm to the other party." Lewis-Williamson v. Grange Mut. Ins. Co., 179 Or App 491, ___, 39 P3d 947, 949 (Feb. 13, 2002), citing Onita Pac. Corp. v. Trustees of Bronson, 315 Or 149, 159, 843 P2d 890, 896 (1992). For this duty to arise, "the parties must be in a 'special relationship' in which the party sought to be held liable had some obligation to pursue the interests of the other party." Bird v. Lewis & Clark Coll., 104 F Supp2d 1271, 1278 (D Or 2000), quoting Conway v. Pacific Univ., 324 Or 231, 236-37, 924 P2d 818, 822 (1996).
Plaintiffs assert that a special relationship exists because defendants "embraced the entire Arboireau family and [reposed] a high degree of trust in the defendants to treat them in a way that ordinarily employers are not obligated to do." Pltfs' Response, p. 13. Defendants argue that the employment relationship is not a special relationship and that an employer does not create a special relationship with an employee merely by sponsoring his and his family's visa applications. Plaintiffs do not directly address defendants' motion against the negligent misrepresentation claim, but argue in response to the motion against the intentional infliction of emotional distress claim that Pierre and adidas had a special relationship.
An employment relationship is not a special relationship for purposes of a claim for negligent misrepresentation:
[T]he fact that [plaintiff] and [defendant] were in an employer-employee relationship has no effect upon our determination that the [defendant] did not have a special responsibility to exercise independent judgment in [plaintiff's] behalf and to look after [plaintiff's] interests. . . . [Plaintiff] and the [defendant] each were pursuing their own interests at the time . . . the misrepresentations [were made]. Conway, 324 Or at 243, 924 P2d at 826.
Similar to Conway, both Pierre and adidas were pursuing their own interests. Mignano needed to fill the Position and Pierre wanted to fulfill a long-standing dream to work in the United States. There was no special relationship at the time of the alleged misrepresentation.
The fact that adidas had its immigration lawyer prepare the Arboireaus' visa documents does not change this analysis. As discussed above, the visa application is a standard form commonly used with corporations having international ties and the visa questionnaire was another standard form necessary for Pierre's transfer. Clearly, when the form was being submitted, both Pierre and adidas were pursuing their own interests and there is nothing peculiar about this relationship to allow a fact-finder to conclude that a special relationship existed.
V. Intentional Infliction of Emotional Distress (Motion 5)
The Second Claim alleges intentional infliction of emotional distress ("IIED") based on defendants intentional refusal to pay severance and moving benefits as previously agreed unless Pierre agreed not to sue. Additionally, plaintiffs allege that defendants intentionally encouraged Salomon to not honor its representations with plaintiffs regarding future employment. Plaintiffs claim that this conduct goes beyond the bounds of socially tolerable conduct. Plaintiffs' IIED claim fails for the reasons that follow.
An IIED claim requires that plaintiffs prove: "(1) defendants intended to inflict severe emotional distress on plaintiffs; (2) defendant's acts were the cause of plaintiff's severe emotional distress; and (3) defendant's acts constituted an extraordinary transgression of the bounds of socially tolerable conduct." Robinson v. U.S. Bancorp, 2000 WL 435468, *5-6 (D Or April 20, 2000); citing McGanty v. Staudenraus, 321 Or 532, 543, 901 P2d 841, 849 (1995). Conduct that is merely "rude, boorish, tyrannical, churlish and mean" does not satisfy the high standard that the defendant's acts must constitute an extraordinary transgression of the bounds of socially tolerable conduct. Patton v. J.C. Penney Co., 301 Or 117, 124, 719 P2d 854, 858 (1986), abrogated on other grounds by McGanty, 321 Or at 544, 779 P2d at 1010.
While IIED claims are common in the context of employment disputes, Oregon appellate courts have been very hesitant to impose liability for IIED claims in employment settings, even in the face of serious employer misconduct. Madani v. Kendall Ford Co., 312 Or 198, 205-06, 818 P2d 930, 934 (1991), abrogated on other grounds by McGanty, 321 Or at 544, 779 P2d at 1010; Lewis v. Oregon Beauty Supply Co., 302 Or 616, 733 P2d 430 (1987), abrogated on other grounds by McGanty, 321 Or at 544, 779 P2d at 1010. The Oregon Supreme Court has stated that IIED "does not provide recovery for the kind of temporary annoyance or injured feelings that can result from friction and rudeness among people in day-to-day life even when the intentional conduct causing plaintiff's distress otherwise qualifies for liability." Hall v. The May Dep't Stores Co., 292 Or 131, 135, 637 P2d 126, 129 (1981), abrogated on other grounds by McGanty, 321 Or at 544, 779 P2d at 1010. Importantly,
The Oregon Supreme Court has held that "a discharge from employment, without more, d[oes] not amount to an extraordinary transgression of the bounds of socially tolerable conduct." Instead, "the purpose and the means used to achieve" the termination . . . are key." [T]he court's focus should be on the means used to effect the employment decision. Bailey v. Reynolds Metals Co., 2000 WL 33201900, *2 (D Or Sept. 11, 2000) (internal citations omitted).
Here, plaintiffs fail to satisfy the intent element, which requires that "the actor either desires to inflict severe emotional distress or knows that such distress is certain or substantially certain to result from his or her conduct." Meade, 164 F3d at 1223, citing McGanty, 321 Or at 550, 901 P2d at 853. There is no evidence that defendants intended to cause plaintiffs any emotional distress, let alone severe emotional distress, or that it was substantially certain to occur. "Plaintiffs were undoubtedly unhappy, but mere malcontent does not amount to severe emotional distress." Id at 1224.
Furthermore, it is a close call whether the alleged conduct is objectionable, let alone socially intolerable. Pierre was terminated at a standard meeting with a supervisor and a human resources representative. He was never humiliated or embarrassed in front of other employees either before or during his termination. Accordingly, the IIED claim is dismissed.
IV. Intentional Interference With Economic Advantage (Motion 6)
If summary judgment is granted on the breach of contract claim, plaintiffs argue that AG must then be liable for intentionally interfering with Pierre's employment agreement with adidas.
Intentional interference with economic advantage requires: "(1) the existence of a professional or business relationship . . . ; (2) intentional interference with that relationship . . . ; (3) by a third party; (4) accomplished through improper means or for an improper purpose; (5) a causal effect between the interference and the harm to the relationship . . . ; and (6) damages." Fox v. Country Mut. Ins. Co., 169 Or App 54, 69-70, 7 P3d 677, 687 (2000). The Ninth Circuit has adopted "the general principle that a party to a contract cannot be liable for interference with that contract." McGanty v. Staudenraus, 321 Or 532, 537, 901 P2d 841, 845 (1995). For the purposes of this particular motion, this court will assume that AG is a third party to the contract.
Defendants assert that there is no evidence showing that AG: (1) interfered with Pierre's relationship with adidas; (2) acted through improper means; or (3) caused adidas to terminate Pierre.
Nothing in the record demonstrates how AG interfered with Pierre's relationship with adidas to cause adidas to terminate Pierre. The only link to AG is Bennett, who wholly relied on Shorrock's judgment when he approved of Shorrock's decision to terminate Pierre. Bennett is one of six members on AG's Board of Directors and supervises employees in both Oregon and Germany. The record does not indicate whether the AG Board considered Pierre's termination or knew that, even if there was pressure to move the Position to Germany, such a move would entail eliminating Pierre. Yet, Bennett's supervision of employees in Germany raises a question of fact as to whether AG, through Bennett, interfered with Pierre's relationship with adidas.
This, however, does not save Pierre's intentional interference with an economic advantage claim because there is no evidence that AG formally moved the Position to Germany. As discussed above, Pierre was terminated simply because he was left standing when the music stopped in defendants' corporate game of musical chairs. The Position did not have to be located in Germany, but was moved because Shorrock offered it to Pollard, an employee in Germany. Pierre was terminated because Pollard accepted the demotion to Pierre's Position.
Nevertheless, plaintiffs contend that a jury could reasonably infer that Shorrock had no legitimate reason to offer the Position to Pollard. Although Shorrock purportedly relied on complaints by employees in Germany regarding Pierre's performance, plaintiffs argue that these complaints were false and merely a pretext to keep Pollard at Pierre's expense. As evidence, plaintiffs point to Mignano's post-termination letter of recommendation stating that performance was not an issue in Pierre's termination. Pltfs' Ex 9. However, this letter does not assist plaintiffs since Shorrock, not Mignano, made the decision to terminate Pierre. Moreover, it is undisputed that Pierre did lack specific costing experience, thus providing reasonable grounds to believe that the complaints from Germany to Shorrock and Bennett were not unfounded. As discussed above, Pierre was left standing when the management reshuffling stopped and there is no evidence that anyone, let alone someone at AG, intentionally terminated Pierre.
Importantly, even if there is evidence that AG intentionally interfered with the relationship between Pierre and adidas, plaintiffs have provided no proof that AG acted through improper means or had an improper purpose. The evidence is clear that in accepting the Position, Pollard was more qualified than Pierre and the Position was a demotion. The evidence also clearly reflects that AG employees in Germany had complained about Pierre to Shorrock and Bennett. So far as can be discerned from the record, the few complaints by AG's employees in Germany were unsolicited and do not evidence a conspiracy. Thus, there is no evidence to support the conclusion that the complaints constitute an "improper means" for terminating Pierre.
Accordingly, defendants are entitled to summary judgment on this claim.
VII. RICO and ORICO Claims (Motions 7 and 8)
The Fifth and Sixth Claims allege that defendants used mail, email, and wire communications for the fraudulent purposes of inducing Pierre to accept the Position by misrepresenting and/or concealing the true terms of his employment in violation of RICO and ORICO (Fifth and Sixth Claims). As discussed above, there was no fraudulent inducement, misrepresentation or concealment. It follows that the RICO and ORICO claims also fail.
A. RICO (Motion 7)
RICO provides a private cause of action in 18 USC § 1962(c):
It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
To state a claim under this subsection, plaintiffs must show: "(1) conduct; (2) of an enterprise; (3) through a pattern; (4) of racketeering activity." Sedima , S.P.R.L. v. Imrex Co., Inc., 473 US 479, 496 (1985) (footnote omitted). Plaintiffs base their racketeering claims on: (1) three instances of mail fraud (18 USC § 1341); (2) multiple instances of wire fraud, including one telephone call and multiple email communications (18 USC § 1343); and (3) one instance of visa fraud (18 USC § 1546). Amended Complaint, ¶ 45.
As already discussed, no claim of misrepresentation survives. Furthermore, without considering the other RICO elements, this court is persuaded that there is no pattern.
The telephone calls, emails, and mail deliveries from defendants to Pierre occurred over a period of five months from August through December 1999. The United States Supreme Court has held that "[p]redicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy this [continuity] requirement." H.J., Inc. v. Northwestern Bell Tel. Co., 492 US 229, 242 (1989). Moreover, the Ninth Circuit has "found no case in which a court has held the requirement to be satisfied by a pattern of activity lasting less than a year." Religious Tech. Ctr. v. Wollersheim, 971 F2d 364, 366-67 (9th Cir 1992). Five months is insufficient to establish "long term criminal conduct" necessary for a RICO claim to survive summary judgment. Id at 367.
Accordingly, defendants are granted summary judgment on the RICO claim.
B. ORICO (Motion 8)
Similar to the RICO statute, ORICO provides: "It is unlawful for any person employed by, or associated with, any enterprise to conduct or participate, directly or indirectly, in such enterprise through a pattern of racketeering activity . . . ." ORS 166.720(3) Additionally, pursuant to ORS 165.042(1): "A person commits the crime of fraudulently obtaining a signature if, with intent to defraud or injure another, the person obtains the signature of a person to a written instrument by knowingly misrepresenting any fact." See State v. Romig, 73 Or App 780, 788-89, 700 P2d 293, 298 (1985).
Furthermore, RICO and ORICO are closely related and federal RICO decisions can provide useful guidance in interpreting ORICO. State v. Blossom, 88 Or App 75, 78-79, 744 P2d 281, 283 (1987), rev denied, 305 Or 22, 749 P2d 136 (1988).
Plaintiffs allege that defendants violated ORS 165.042 by fraudulently obtaining plaintiffs' signatures on: (1) the Offer Letter; (2) the termination agreement; (3) Sandrine's leave agreement with Salomon; (4) plaintiffs' lease agreement on their home in France; (5) a letter from Davis Wright Tremaine to the United States; and (6) a letter from Bobbi Chin to the United States. Amended Complaint, ¶ 41(a)-(f). Plaintiffs also assert that defendants fraudulently obtained signatures of United States government officials on plaintiffs' visas. Id at (g).
There is no evidence that defendants participated in the leasing of plaintiffs' home in France and plaintiffs' signatures do not appear on the letters to the United States from either Davis Wright Tremaine or Bobbi Chin. Moreover, as discussed above, there is no evidence of fraud. "An essential element of Plaintiff's Oregon RICO claim is that Defendants defrauded them." In re Harris Pine Mills, 44 F3d 1431, 1439 (9th Cir 1995). Accordingly, defendants are entitled to summary judgment on the ORICO claim.
For the reasons stated above, defendants' Motion for Summary Judgment (docket #60) is GRANTED.
DATED this 19th day of March, 2002.
1. Both parties have submitted documents with various attachments, namely Amended Affidavit of Victoria Blachly in Support of Plaintiffs' Opposition to Motion for Summary Judgment ("Pltfs' Ex") (docket #83), Plaintiffs' Supplement to the Record (docket #107), Corrected Declaration of Caroline R. Guest ("Defs' Ex") (docket #91), Reply Declaration of Caroline R. Guest ("Defs' 2nd Ex") (docket #90), and Supplemental Declaration of Caroline R. Guest in Support of Defendants' Motion for Summary Judgment (docket #108). Citations to affidavits, declarations, and depositions are identified by the last name of the affiant, declarant, or deponent, and citations are to the paragraph(s) of the affidavit, declaration or page(s) of the deposition transcript. All other citations are to the exhibit number of the parties' submissions.