654 F. App'x 792
6th Cir.2016Background
- Marathon Petroleum operated a Detroit refinery adjacent to Oakwood Heights and pursued a long-term expansion (DHOUP) beginning with an application in 2002 and expanded operations launched in 2012.
- In 2011–2012 Marathon implemented a Residential Buyout Program and purchased roughly 277 of 294 homes in Oakwood Heights; plaintiffs allege buyout agreements required waivers of claims and were non‑negotiable.
- Appellants are small-business owners who claim their customer base was eliminated by the buyouts and that Marathon intended to preempt future litigation and depress commercial property values to later buy businesses at a discount.
- Appellants sued for tortious interference with business relationships/expectancies and private nuisance, alleging increased emissions after the 2012 expansion harmed their use/enjoyment and business operations.
- The district court granted Marathon’s motion to dismiss the second amended complaint with prejudice for failure to plead plausible facts showing (1) malice/intent to interfere (required for non‑per‑se interference claims) and (2) factual allegations of unreasonable interference and significant harm for nuisance.
- The Sixth Circuit affirmed, holding plaintiffs’ allegations supported Marathon’s legitimate business motive (expansion and litigation risk mitigation) and that plaintiffs failed to plead sufficient factual detail to render intent/malice and nuisance harms plausible.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs plausibly pleaded tortious interference with business relationships/expectancies | Marathon enacted buyouts to maliciously cut off plaintiffs’ customers and later acquire commercial property at depressed prices | Buyouts were legitimate business conduct to expand the refinery and limit future litigation; plaintiffs failed to plead specific facts showing malice or intent to interfere | Dismissed — pleadings only support legitimate business motive; plaintiffs failed to plausibly allege unlawful motive/malice needed for non‑per‑se interference |
| Whether plaintiffs pleaded a per se wrongful act | Marathon’s conduct was inherently wrongful because it was designed to preempt claims and force businesses out | Expansion and buyouts are not per se wrongful when motivated by legitimate business reasons | Dismissed — conduct not per se wrongful; legitimate business motive undermines per se theory |
| Whether plaintiffs pleaded nuisance (unreasonable interference and significant harm) | Expanded refinery emissions increased pollutants that unreasonably interfered with use/enjoyment and business operations | Plaintiffs stated only conclusory allegations about interference and harm without factual enhancement; some buyouts occurred before emissions increased | Dismissed — allegations of emissions present but plaintiffs failed to plead how emissions caused substantial, unreasonable interference or significant harm |
| Whether leave to further amend should have been granted | Plaintiffs asked the court to keep Rule 15(a)(2) in mind and implied they could amend to add necessary facts | District court had already granted two amendments and plaintiffs gave no concrete reasons or proposed facts to cure defects | Affirmed — denial of further leave not an abuse of discretion given repeated failures and no offered amendment details |
Key Cases Cited
- Wausau Underwriters Ins. Co. v. Vulcan Dev., Inc., 323 F.3d 396 (6th Cir. 2003) (elements of tortious interference claim under Michigan law)
- Republic Bank & Trust Co. v. Bear Stearns & Co., 683 F.3d 239 (6th Cir. 2012) (Rule 8 plausibility standard and pleading of mental state)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions vs. factual allegations; plausibility applies to intent allegations)
- Warrior Sports, Inc. v. NCAA, 623 F.3d 281 (6th Cir. 2010) (requirement to allege specific affirmative acts to corroborate improper motive)
- Saab Automobile AB v. Gen. Motors Co., 770 F.3d 436 (6th Cir. 2014) (application of pleading standards to claims of improper motive)
- Badiee v. Brighton Area Sch., 695 N.W.2d 521 (Mich. Ct. App. 2005) (need for specific affirmative acts when defendant’s conduct is not wrongful per se)
- Prysak v. R.L. Polk Co., 483 N.W.2d 629 (Mich. Ct. App. 1992) (definition of wrongful act per se)
- Mich. Podiatric Med. Ass’n v. Nat’l Foot Care Program, Inc., 438 N.W.2d 349 (Mich. Ct. App. 1989) (legitimate business motives shield defendants from per se wrongful act theory)
- Formall, Inc. v. Cmty. Nat’l Bank of Pontiac, 421 N.W.2d 289 (Mich. Ct. App. 1988) (discussion of pleading options for tortious interference)
- Biro v. Conde Nast, 807 F.3d 541 (2d Cir. 2015) (intent must be pleaded with sufficient facts to be plausible)
- Pippen v. NBCUniversal Media, LLC, 734 F.3d 610 (7th Cir. 2013) (states of mind may be pleaded generally but require factual detail to be plausible)
- Mayfield v. Nat’l Ass’n for Stock Car Auto Racing, Inc., 674 F.3d 369 (4th Cir. 2012) (Rule 9(b) does not excuse plausibility requirement for malice)
- Cloverleaf Car Co. v. Phillips Petroleum Co., 540 N.W.2d 297 (Mich. Ct. App. 1995) (elements of private nuisance under Michigan law)
- Adkins v. Thomas Solvent Co., 487 N.W.2d 715 (Mich. 1992) (nuisance requires significant interference with use and enjoyment of land)
- Morse v. McWhorter, 290 F.3d 795 (6th Cir. 2002) (denial of leave to amend where plaintiff failed to cure deficiencies)
- Foman v. Davis, 371 U.S. 178 (1962) (standards for granting leave to amend)