Abdallah v. Bain Capital, LLC
2014 U.S. App. LEXIS 10248
| 1st Cir. | 2014Background
- Bain-led investor group acquired ~85% of Samsonite in 2003; Samsonite owned a luggage factory in Hénin-Beaumont, France that employed >200 workers.
- To avoid large severance obligations under French law, Samsonite transferred the factory to a wholly owned subsidiary (NewCo) and sold NewCo to HB Group for €1; Samsonite also paid HB Group ≈€9,000,000.
- NewCo/ HB Group soon failed; a French court ordered judicial liquidation on February 15, 2007, terminating employees and leaving them unpaid for statutory post-termination benefits.
- Abdallah and coworkers sued Samsonite (and its shareholders, including Bain) in French courts, obtaining rulings canceling the sale and a labor determination that Samsonite remained employer; French courts concluded Bain was not a party to the annulment proceeding.
- In 2011 Aurel (HB Group principal) executed an affidavit implicating Bain representatives in meetings about the transaction; Abdallah filed suit in U.S. federal court in 2011/2012 against Bain alleging fraud, tortious interference, negligent misrepresentation, and unjust enrichment.
- District court dismissed as time-barred under Massachusetts’ three-year limitations period; on appeal the First Circuit affirmed, holding tolling doctrines (fraudulent concealment, equitable tolling, and estoppel) did not apply because Abdallah had knowledge of facts essential to her claims well before 2011.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether statute of limitations tolled by fraudulent concealment | Abdallah: learned essential Bain involvement only in 2011 via Aurel affidavit | Bain: claims accrued Feb 15, 2007; plaintiff had sufficient facts earlier | Not tolled — plaintiff had actual knowledge of facts giving rise to claims by 2007 |
| Whether equitable tolling applies | Abdallah: could not have discovered essential information before 2011 despite diligence | Bain: plaintiff had facts essential to suit and could have sued earlier | Not tolled — plaintiff exercised or could have exercised due diligence; had essential facts in 2007 |
| Whether Bain’s denial in French court estops it from asserting limitations defense | Abdallah: Bain’s statement that it was a “stranger” induced reliance, so estoppel applies | Bain: general denial did not cause plaintiff to delay suit; no inducement or reliance | No estoppel — plaintiff did not rely on denial and continued to litigate in France |
| Whether additional facts in 2011 were essential to plead parent liability | Abdallah: Aurel’s affidavit added necessary evidence of Bain directing Samsonite | Bain: controlling/parental involvement was inferable and alleged in 2007; further detail not essential | Court: 2011 details were not essential; any plausible parent-control theory could have been pursued in 2007 |
Key Cases Cited
- Rodríguez-Vives v. P.R. Firefighters Corps. of P.R., 743 F.3d 278 (1st Cir. 2014) (standard for considering complaint allegations and public records on 12(b)(6))
- Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315 (1st Cir. 2008) (complaint must sketch factual predicate for tolling to survive 12(b)(6))
- Massachusetts Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 412 F.3d 215 (1st Cir. 2005) (fraudulent concealment tolling requires concealment of existence of cause of action and no actual knowledge)
- Protective Life Ins. Co. v. Sullivan, 425 Mass. 615 (Mass. 1997) (equitable tolling applies only when plaintiff exercising due diligence could not discover essential information)
- Scott v. NG U.S. 1, Inc., 450 Mass. 760 (Mass. 2008) (parent-subsidiary liability requires pervasive control or intermingling to disregard corporate form)
- Esmark, Inc. v. NLRB, 887 F.2d 739 (7th Cir. 1989) (parent control alone does not usually impose liability)