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Corporate Auto Resource Specialist, Ltd. v. Masson

United States District Court, E.D. Michigan, Southern Division

August 29, 2019

CORPORATE AUTO RESOURCE SPECIALISTS, LTD, Plaintiff,
v.
MICHAEL MASSON; SUBURBAN MOTORS COMPANY, LLC D/B/A COMPETITIVE VEHICLE SERVICES; BRIAN BLANKENSHIP; JAMES MELTON, SR.; JAMES MELTON, JR.; and LAURA ANN BLANKENSHIP Defendants.

          DAVID R. GRAND MAGISTRATE JUDGE

          ORDER GRANTING THE MELTON DEFENDANTS' MOTION TO DISMISS

          VICTORIA A. ROBERTS DISTRICT COURT JUDGE

         I. INTRODUCTION

         Corporate Auto Resource Specialists, Ltd., (“Corporate Auto”) alleges six Defendants implemented and engaged in a horizontal bid-rigging scheme to manipulate bid awards from Fiat Chrysler. James Melton, Sr. and James Melton, Jr. move to dismiss the claims against them for failure to state a claim upon which relief may be granted.

         They say Corporate Auto: (1) engages in impermissible group pleading; and (2) fails to plead its fraud claims with particularity as required by Fed.R.Civ.P. 9(b).

         The Court GRANTS the Melton Defendants' Motion to Dismiss. However, the Court grants Corporate Auto leave to amend its Complaint under Fed.R.Civ.P. 15(a)(2).

         II. FACTUAL BACKGROUND

         Defendants in this case are: Suburban Motors Company and two of its employees, Michael Masson and Laura Ann Blankenship; Brian Blankenship, an employee of FCA US, LLC (“Fiat Chrysler”) and Laura's father; and the Meltons, former employees of LaFontaine Import Motors.

         The facts stated here are taken from Corporate Auto's First Amended Complaint.

         Corporate Auto provides commercial vehicle rentals and sales to various automotive manufacturers, OEMs (original equipment manufacturers), and other businesses including Fiat Chrysler. These customers seek such rentals or sales for reasons including vehicle testing, competitive research, benchmarking, events, promotions, etc.

         Corporate Auto, an approved vendor with Fiat Chrysler, alleges the Defendants, primarily through orchestration by Brian Blankenship, Suburban Motors, and Michael Masson, implemented a horizontal bid-rigging scheme to manipulate bidding for business from Fiat Chrysler.

         As a general overview, Fiat Chrysler solicits bids and/or proposals for its automotive leasing and purchasing business from its approved vendors. Fiat Chrysler issues a request for quote (RFQ), which identifies requirements and specifications, to its vendors through electronic and/or facsimile notices. Any approved vendor may submit a response. This is intended to be a competitive process by which Fiat Chrysler obtains the best price for the specific RFQ. Brian Blankenship had authority to award Fiat Chrysler business to vendors such as Corporate Auto, Suburban Motors, and the Meltons.

         Corporate Auto alleges Brian Blankenship funneled insider and confidential information of Fiat Chrysler to Suburban Motors, Masson, and the Meltons, primarily by using Laura Ann Blankenship as the conduit. This information included terms related to bids, business, and other information not available to Corporate Auto or other competitors.

         The Meltons were employees of LaFontaine, also an approved vendor with Fiat Chrysler. They handled Fiat Chrysler automotive leasing and purchasing business. This working relationship ended after the Meltons were sued by LaFontaine in Oakland County Circuit Court for various claims, including stealing LaFontaine's trade secrets and proprietary information and using that information to wrongfully compete with LaFontaine and to acquire its business.

         Corporate Auto alleges Masson made payments to the Meltons in the beginning of 2014 in furtherance of the scheme. Corporate Auto says it is more probable that these payments and wrongful activity continued after 2014 and into the present.

         In addition to receiving payments, Corporate Auto says the Meltons coordinated with Suburban Motors and Masson to manipulate the Fiat Chrysler bid process. Corporate Auto says defendants also extensively communicated about their scheme through personal meetings, emails, and text messages sent or received. This scheme was furthered through the use of the mail system to send pertinent documents related to the bid.

         The following claims are brought against the Meltons: Count III: Civil RICO Liability under 18 U.S.C. § 1962(d); Count IV: Tortious Interference with a Contract and ...


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