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Kelsey v. Goldstar Estate Buyers Corporation

United States District Court, D. Oregon, Portland Division

March 21, 2014

GOLDSTAR ESTATE BUYERS CORPORATION, a Minnesota corporation, and WILLIAM ULRICH, an individual, Defendants.

William A. Barton, Brent Barton, THE BARTON LAW FIRM, P.C., Newport, Oregon, Of Attorneys for Plaintiffs.

Christopher E. Hawk, Daniel J. Nichols, Kjersten H. Turpen, GORDON REES LLP, Portland, Oregon, Of Attorneys for Defendants.


DENNIS J. HUBEL, Magistrate Judge.

This matter comes before the Court on Defendants Goldstar Estate Buyers Corporation ("Goldstar") and William Ulrich's ("Ulrich") (collectively "Defendants") motion to dismiss Plaintiffs Kelly Kelsey ("Kelsey"), Christine Kotrous ("Kotrous"), Linda Noonan ("Noonan"), Christine Ottens ("Ottens"), Rita Robertson ("Robertson"), Karyn Suggs ("Suggs"), and Sherry Wickler's ("Wickler") (collectively "Plaintiffs") amended complaint, pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6), for failure to state a claim upon which relief can be granted. For the reasons that follow, Defendants' motion (Docket No. 25) to dismiss is GRANTED.


The facts are drawn from the amended complaint. Plaintiffs are all former employees of Goldstar who worked under the direction of Ulrich, an owner, agent and employee of Goldstar.[1] Acting on behalf of Goldstar, Ulrich would travel to various cities throughout the United States to buy and sell jewelry and other valuable items. Ulrich operated Goldstar's business out of hotel rooms, and employees working alongside Ulrich at a given location were provided with overnight lodging, food and transportation. Plaintiffs are residents of different states and were employed by Goldstar for varying durations, ranging from six days to nearly eight years, between September 2004 and November 2012. Wickler is a Pennsylvania resident who worked for Goldstar from September 2004 to June 2012. Ottens is an Oklahoma resident who worked for Goldstar from January 2008 to March 2008, and April 2011 to June 2012. Robertson is an Arizona resident who worked for Goldstar from September 2009 to June 2012. Kelsey is a California resident who worked for Goldstar from January 2011 to November 2011. Suggs is a California resident who worked for Goldstar from February 2011 to June 2012. Kotrous is an Oregon resident who worked for Goldstar from March 2011 to November 2012. Noonan is an Oregon resident who worked for Goldstar from May 16, 2011, through May 22, 2011.

On a continuing basis throughout their periods of employment, it is alleged that Ulrich forced or attempted to force each of the seven female plaintiffs to engage in sexual intercourse, sometimes in exchange for an additional monetary incentive; group sex; anal sex; oral sex, sometimes in exchange for an additional monetary incentive; sexual acts while others observed; the procurement of sexual devices; the procurement of prostitution services; travel-related arrangements involving out-of-state prostitutes; and/or the procurement of sex partners. The amended complaint does not allege any specific incidents with reference to dates, times, the exact parties involved or locations where the incidents occurred. Plaintiffs allege Ulrich compelled compliance by instilling a fear that he would withhold from Plaintiffs the necessities of life, such as food, shelter, money, and/or continued employment.

The amended complaint alleges causes of action for (1) involuntary servitude in violation of ORS 30.867; (2) trafficking in persons in violation of ORS 30.867; (3) sex trafficking in violation of the Trafficking Victims Protection Reauthorization Act ("TVPRA"), 18 U.S.C. § 1595 (hereinafter "§ 1595 or "civil remedy provision"); (4) forced labor in violation of § 1595; (5) sex discrimination in violation of ORS 659A.030; (6) sex discrimination in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e to 2000e-17 (Kotrous, Ottens and Robertson only); (7) wrongful discharge under Oregon law (Kotrous and Noonan only); (8) negligence under Oregon law; and (9) breach of the implied covenant of good faith and fair dealing under Minnesota law.[2]

On January 21, 2014, Defendants filed a motion to dismiss Plaintiffs' amended complaint in its entirety, pursuant to 12(b)(6). The parties have consented to have their case heard by a United States Magistrate Judge. See 28 U.S.C. § 636(c)(1). Defendants' motion to dismiss was fully briefed as of February 24, 2014, and the Court heard argument on the pending motion on March 17, 2014.


A court may dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). In considering a Rule 12(b)(6) motion to dismiss, the court must accept all of the claimant's material factual allegations as true and view all facts in the light most favorable to the claimant. Reynolds v. Giusto, No. 08-CV-6261, 2009 WL 2523727, at *1 (D. Or. Aug. 18, 2009). The Supreme Court addressed the proper pleading standard under Rule 12(b)(6) in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Twombly established the need to include facts sufficient in the pleadings to give proper notice of the claim and its basis: "While a complaint attacked [under] Rule 12(b)(6)... does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555 (brackets omitted).

Since Twombly, the Supreme Court has clarified that the pleading standard announced therein is generally applicable to all cases governed by the Rules, not only to antitrust cases. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009). The Iqbal court explained that Twombly was guided by two specific principles. First, although the court must accept as true all facts asserted in a pleading, it need not accept as true any legal conclusion set forth in a pleading. Id. Second, the complaint must set forth facts supporting a plausible claim for relief and not merely a possible claim for relief. Id. The court instructed that "[d]etermining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 129 S.Ct. at 1949-50 (citing Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007)). The court concluded: "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at 1950.

The Ninth Circuit further explained the Twombly-Iqbal standard in Moss v. U.S. Secret Service, 572 F.3d 962 (9th Cir. 2009). The Moss court reaffirmed the Iqbal holding that 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." Moss, 572 F.3d at 969 (quoting Iqbal, 129 S.Ct. at 1949). The court in Moss concluded by stating: "In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, and reasonable inference from that content must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss, 572 F.3d at 969.


A. Claims Under ORS 30.867

Plaintiffs' first two causes of action, which are predicated on allegations of involuntary servitude and trafficking in persons, are brought pursuant to ORS 30.867. That statute provides, in relevant part:

Irrespective of any criminal prosecution or the result of a criminal prosecution, a person injured by a violation of ORS 163.263 (Subjecting another person to involuntary servitude in the second degree)... or [ORS] 163.266 (Trafficking in persons) may bring a civil action for damages against a person whose actions are unlawful under [those statutes].

OR. REV. STAT. § 30.867(1). Under ORS 163.263, "[a] person commits the crime of subjecting another person to involuntary servitude... if the person knowingly and without lawful authority forces or attempts to force the other person to engage in services by, " among other things, "[i]nstilling in the other person a fear that the actor will withhold from the other person the necessities of life, including but not limited to lodging, food and clothing." OR. REV. STAT. § 163.263(1). ORS 163.266 similarly provides that:

A person commits the crime of trafficking in persons if the person knowingly:
(a) Recruits, entices, harbors, transports, provides or obtains by any means, or attempts to recruit, entice, harbor, transport, provide or obtain by any means, another person knowing that the other person will be subjected to involuntary servitude as described in ORS 163.263... or
(b) Benefits financially or receives something of value from participation in a venture that involves an act prohibited ...

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