United States District Court, D. Montana, Butte Division
DONALD W. MOLLOY, District Judge.
Defendants International Student Exchange, Inc. and Student Management Group, Inc. move to dismiss Plaintiff Robin Simon Fischer's claims against them, arguing failure to state a claim. (Doc. 51.) Fischer filed suit against International Student Exchange and Student Management Group, alleging negligence, alter ego liability, and breach of contract. (Doc. 45.) Fischer also sued his Montana host parent, Defendant Theodore Preiss, for assault, battery, and negligence. (Id. ) The alter ego and negligence claims against Student Management Group are dismissed without prejudice. The breach of contract claim against International Student Exchange is dismissed with prejudice.
International Student Exchange is a California nonprofit corporation with its principal place of business in New York. (Stip. Facts, Doc. 70 at 4.) It is in the business of bringing foreign exchange students to the United States to live with American host families, and to that end, it was designated by the United States Department of State as a Department of State Exchange Visitor Program in 1984. (Id. at 5.) Student Management Group is a New York corporation with its principal place of business in New York. (Id. ) Wayne E. Brewer is the CEO of International Student Exchange and the President of Student Management Group, and the two corporations share a business address in New York. (Id. at 4-5.)
In 2010, International Student Exchange entered into a contract with a German company, Educational Consulting and Student Exchange. (Doc. 53-1.) Pursuant to this contract, International Student Exchange agreed to locate and screen families in the United States that would serve as hosts for German students who had contracted with Educational Consulting and Student Exchange to facilitate a study abroad experience. (Id.; Doc. 45 at 4.) In return, Educational Consulting and Student Exchange would promote International Student Exchange's program in Germany and recruit students to be hosted by families in the United States. (Doc. 52 at 3.) In 2011, Fischer contracted with Educational Consulting and Student Exchange for placement as a foreign exchange student in the United States. (Doc. 45 at 4.) He is a citizen of Grosskrotzenburg, Hessen, Germany. (Stip. Facts, Doc. 70 at 4.) Around August of 2011, International Student Exchange approved the Preiss family of Belgrade, Montana as a host family for Fischer, and Fischer was then placed with that family. (Doc. 45 at 5.)
On or around September 2, 2011, Fischer moved into the Preiss family home in Belgrade. (Stip. Facts, Doc. 70 at 5.) As a host parent, Preiss had certain duties toward Fischer, including providing food, transportation, and a safe and comfortable living situation. (Id. at 5.) Fischer claims in his Amended Complaint that around December 23, 2011, Preiss subjected him to unwanted sexual contact by "touching his intimate body parts under the guise of tickling'; touching his intimate body parts, including his chest, nipples and penis, with his hands and mouth; and, performing oral sex on him." (Doc. 45 at 8.) That same evening Fischer contacted Ashley Pulsipher, International Student Exchange's Area Representative who was responsible for monitoring Fischer's placement with his host family, and told her that he had a private, urgent matter to discuss with her. (Id. at 9.) Fischer reported the alleged abuse to Ms. Pulsipher during a meeting with her on December 26. (Id. ) Ms. Pulsipher immediately informed her supervisor, Carol Toews, of the situation and Ms. Toews contacted International Student Exchange's corporate headquarters in New York. (Id. ) Headquarters directed Ms. Toews to contact the Child and Family Services Division of the Montana Department of Public Health and Human Services. She then notified them of Fischer's report of sexual abuse. (Id. at 9-10.) International Student Exchange also reported the allegation of abuse to the U.S. Department of State. (Id. at 10.) A day later Fischer returned to Germany, December 27, 2011. (Id. ) The Gallatin County Attorney's Office investigated Fischer's allegations of sexual abuse against Preiss but declined to press charges. (Stip. Facts, Doc. 70 at 6.)
Nearly two years later, on November 22, 2013, Fischer filed a Complaint in the Eastern District of New York against International Student Exchange, Student Management Group, and Preiss. (Doc. 1.) Preiss filed a motion pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure to dismiss the claims against him for lack of personal jurisdiction. (Doc. 32 at 1.) In the alternative, he moved for a transfer of venue to Montana on the grounds of convenience of the witnesses. (Id. at 1-2.) Judge Leonard D. Wexler of the Eastern District of New York found that New York did not have personal jurisdiction over Preiss and in so doing determined venue was not proper in New York. (Doc. 39.) Judge Wexler granted without prejudice Defendants' motion to dismiss Fischer's Complaint and ordered the clerk of court to transfer the case to the District of Montana. (Id. ) The current motion to dismiss for failure to state a claim is a motion by Defendants International Student Exchange and Student Management Group; Defendant Preiss did not join the motion.
To survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted). A dismissal for failure to state a claim under Rule 12(b)(6) is proper if there is a "lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). The court accepts all factual allegations in the complaint as true and construes the pleadings in the light most favorable to the plaintiff. Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). Conclusory allegations and unwarranted inferences, however, are insufficient to defeat a motion to dismiss. Johnson v. Lucent Techs. Inc., 653 F.3d 1000, 1010 (9th Cir. 2011).
Fischer makes two claims against Student Management Group, theories based on alter ego liability and negligence. (Doc. 45 at 10, 16.) Both of these claims are also raised against International Student Exchange. (Id. )
I. Alter ego claim against Student Management Group.
According to Fischer, he "was wronged by [Student Management Group]'s and [International Student Exchange]'s abuse of the corporate form" and the two Defendants should be treated as a single company for purposes of the imposition of liability. (Id. at 16-17.) Fischer supports this conclusion by alleging that Student Management Group "is the alter ego of [International Student Exchange], " that Student Management Group, "at all times relevant, acted as representative and agent of [International Student Exchange], " and that "the corporate affairs of [Student Management Group] and [International Student Exchange] are intertwined to the ...