United States District Court, E.D. Michigan, Southern Division
R. GRAND MAGISTRATE JUDGE
ORDER GRANTING THE MELTON DEFENDANTS' MOTION TO
VICTORIA A. ROBERTS DISTRICT COURT JUDGE
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.
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).
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).
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.
facts stated here are taken from Corporate Auto's First
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.
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.
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
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.
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.
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.
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.
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 ...