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Chaffin v. BHP Billiton

United States District Court, D. New Mexico

September 25, 2019

KENNETH S. CHAFFIN and TIFFANY CHAFFIN, Plaintiffs,
v.
BHP BILLITON f.k.a. BROKEN HILLS PROPRIETARY COMPANY LIMITED and a.k.a. BHP BILLITON LIMITED or BHP BILLITON GROUP, BILLITON, PLC a.k.a. BHP BILLITON, PLC, BHP BILLITON MINE MANAGEMENT COMPANY, BHP BILLITON NEW MEXICO COAL, INC., RUDI HALGRYN, and RYAN WAGGONER, Defendants.

          MEMORANDUM OPINION AND ORDER

         On October 12, 2018, Defendants BHP Billiton Mine Management Company (“BHPB MMCo”), BHP Billiton New Mexico Coal, Inc. (“NMC”), Rudi Halgryn, and Ryan Waggoner (collectively, “Defendants”) filed a Motion to Dismiss for Failure to State a Claim (ECF No. 14). Defendants seek dismissal of Plaintiffs Kenneth and Tiffany Chaffin’s claims for common-law wrongful discharge, intentional infliction of emotional distress, and interference with contract and prospective economic advantage. The Court, having considered the motion, pleadings, briefs, applicable law, and otherwise being fully advised, concludes that Defendants’ motion to dismiss should be granted in part and denied in part as described herein.

         I. FACTUAL BACKGROUND

         Since 1994, Plaintiff Kenneth Chaffin worked as an independent contractor and then employee at the Navajo Mine in Fruitland, New Mexico. First Am. Compl. ¶ 13, ECF No. 1-1. From May 2013 through July 29, 2016, Mr. Chaffin worked as a Field Supervisor for Defendants BHPB MMCo. and NMC. See Id . ¶¶ 7-8, 14. Mr. Chaffin entered into a written contract with the “BHP Group, ” Plaintiffs’ collective reference to BHP Billiton (“BHP”), BHP Billiton, PLC (“BHP PLC”), BHPB MMCo, and NMC. See Id . ¶¶ 3-5.

         In March 2016, Mr. Chaffin gave Defendants written notice of his need to take leaves of absences regarding the mental/emotional health of his wife, Plaintiff Tiffany Chaffin. Id. ¶ 16(b). He asserts he was entitled to make these requests under the Family and Medical Leave Act (“FMLA”), 29 U.S.C. § 2601 et seq., the New Mexico Human Rights Act (“NMHRA”), N.M. Stat. Ann. § 28-1-1 et seq., and the Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C. § 12101 et seq., and as amended. Id. ¶ 16(c).

         From March through July 2016, Mr. Chaffin’s direct supervisor, Maintenance Superintendent Ryan Waggoner, began treating Mr. Chaffin as if Defendants now found him unfavorable because of his association with a person having mental/emotional difficulties. Id. ¶ 16(d). Mr. Waggoner also acted as if Mr. Chaffin was impaired or disabled, including asking co-workers whether they felt like Mr. Chaffin was still fit for duty. Id. ¶ 16(e). Mr. Chaffin “was harassed, belittled, and discriminated and retaliated against by Defendants for incurring, having a record of, or being regarded as having serious injuries and serious medical conditions, and/or for having requested accommodations for the same.” Id. ¶ 17. Mr. Chaffin made complaints of this treatment within Defendants’ corporate structure to no avail. Id. ¶ 18.

         On June 3, 2016, Mr. Waggoner instructed Field Supervisor John Marts by radio to have Mr. Chaffin remove the Out of Service tag from the left-hand overhead crane on the 7920 drag line. Id. ¶ 16(f). Mr. Chaffin was present and within hearing distance of this conversation. Id. Mr. Waggoner said he had verified it was ok to operate. Id. As Mr. Waggoner and Mr. Marts were aware, Mr. Chaffin had no independent knowledge of what repairs or inspections had occurred because he had taken periodic leaves of absences. Id. Mr. Waggoner removed the tag as instructed. Id.

         The week of July 5, 2016, Mr. Waggoner began changing and limiting Mr. Chaffin’s supervisory responsibilities without explanation. Id. ¶ 16(g). On July 18, 2016, Defendants requested more information on Mr. Chaffin’s FMLA request. Id. ¶ 16(h). On July 25, 2016, Tiffany Chaffin’s brother died, and the funeral service was to occur on August 1, 2016. Id. ¶ 16(i). Defendants were aware of Mr. Chaffin’s brother-in-law’s death. Id. Mr. Chaffin’s need for a leave of absence and Mrs. Chaffin’s reliance on the health insurance provided by his employer was immediate and critical. Id.

         Defendants terminated Mr. Chaffin by letter dated July 29, 2016, for purportedly removing the Out of Service tag from the left-hand overhead crane on the 7920 in violation of BHP’s Log out – Tag out standards, work management processes, Charter Values, and safety concerns. See Id . ¶¶ 15, 16(j). The basis for the termination was false and Mr. Chaffin was subject to disparate treatment as compared to Mr. Waggoner and Mr. Marts from the June 3, 2016 incident. See Id . ¶ 16(j). The Mine Safety and Health Administration investigated the June 3, 2016 incident and determined that the left-hand overhead crane on the 7920 drag line was, in fact, safe to operate when Mr. Chaffin removed the Out of Service tag at Mr. Waggoner’s and Mr. Marts’ direction. Id. ¶ 16(k).

         Around this time, Defendants were negotiating and completing the purchase of the Navajo Mine by a third-party. See Id . ¶ 16(a). Mr. Chaffin’s termination of employment before the closing date of the sale of the mining operations interfered with and prevented him from securing employment with the successor company that continues to operate the mine. Id. ¶ 55. As a result, Plaintiffs lost the benefit of their health insurance coverage. Id.

         Plaintiffs filed suit in the First Judicial District Court in the State of New Mexico against the BHP Group, Rudi Halgryn, an alleged managerial agent of BHP, and Ryan Waggoner. See Id . ¶¶ 3-4, 9.[1] Mr. Chaffin asserts claims for violation of the FMLA (Count I), negligent or fraudulent misrepresentation (Count II); and common-law wrongful discharge (Count III). Id. ¶¶ 20-47. Both Mr. Chaffin and Mrs. Chaffin set forth claims for intentional infliction of emotional distress (Count IV), interference with contract and prospective economic advantage (Count V), and punitive damages. Id. ¶¶ 48-60.

         II. LEGAL STANDARD

         On a motion to dismiss, the court assesses the legal sufficiency of the allegations contained within the four corners of the complaint. Archuleta v. Wagner, 523 F.3d 1278, 1281 (10th Cir. 2008). Rule 8 requires the complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). The court accepts as true all well-pleaded facts, viewing them in the light most favorable to the nonmoving party and allowing all reasonable inferences in favor of the nonmoving party. Archuleta, 523 F.3d at 1283. The court "should disregard all conclusory statements of law and consider whether the remaining specific factual allegations, if assumed to be true, plausibly suggest the defendant is liable." Kansas Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011). The complaint "does not need detailed factual allegations, " but “a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

         III. ANALYSIS

         Defendants move to dismiss for failure to state a claim Plaintiffs’ claims for intentional infliction of emotional distress (Count IV), interference with contract and prospective economic advantage, (Count V), and common law wrongful discharge (Count III).[2]

         A. Interference with contract and prospective economic advantage

         New Mexico adopted the Restatement (Second) of Torts’ description of the tort of interference with prospective contractual relations:

         One who intentionally and improperly interferes with another’s prospective contractual relation … is subject to liability to the other for the pecuniary harm resulting from loss of the benefits of the relation, whether the interference consists of

(a) inducing or otherwise causing a third person not to enter into or continue the prospective relation or
(b) preventing the other from acquiring or continuing the prospective relation.

M & M Rental Tools, Inc. v. Milchem, Inc., 1980-NMCA-072, ¶ 20, 612 P.2d 241 (quoting Restatement (Second) of Torts § 766B). To establish tortious interference with a contract, the plaintiff must prove that (1) the defendant had knowledge of the contract between the plaintiff and a third party, (2) performance of the contract was refused, (3) the defendant played an active and substantial part in causing the plaintiff to lose the benefits of his contract, (4) damages flowed from the breached contract, and (5) the defendant induced the breach without justification or privilege to do so. Ettenson v. Burke, 2001-NMCA-003, ¶ ...


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