Dabrowski v. Tubular Metal Systems, LLC
722 F.Supp.3d 766
E.D. Mich.2024Background
- Michael Dabrowski, age 65, worked at a manufacturing plant in Pinconning, MI, allegedly operated by four related corporate entities, all owned by Patriarch Partners and its founder, Lynn Tilton.
- Dabrowski claimed he was hired as a supervisor, later acting as maintenance manager, but faced age discrimination when denied promotion and pay by the plant’s management, who sought a younger replacement.
- After temporary layoffs due to COVID-19, Dabrowski was not restored to his prior position or pay and ultimately resigned, asserting he was induced to quit.
- Dabrowski filed suit under the Age Discrimination in Employment Act and Michigan’s Elliott-Larsen Civil Rights Act against all four entities, asserting they are liable as mere continuations of one another under Michigan law’s successor liability doctrine.
- Only Advanced Vehicle Assemblies, LLC (AVA) moved to dismiss, arguing insufficient pleading regarding its successor liability under the "mere-continuation" exception.
- A magistrate judge recommended denial of the motion, and AVA objected; the district judge partially sustained and partially overruled AVA’s objections.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of Allegations under Mere-Continuation Exception | Dabrowski alleged all entities (incl. AVA) were mere continuations with common ownership, same operations, and management | AVA claimed facts were too vague to establish mere-continuation or AVA’s liability as successor | Complaint plausibly alleged AVA’s successor liability; motion to dismiss denied |
| Consideration of Exhibits on 12(b)(6) Motion | Plaintiff relied on allegations in complaint and referenced some exhibits | AVA argued court should consider bankruptcy sale documents showing DNA Buyer was not a mere continuation | Court may consider public records; but AVA’s evidence did not refute relevant allegations about plant ownership |
| Standard for Successor Liability—Proper Exception | Plaintiff relied on general Michigan successor liability law for employment claims | AVA and magistrate judge cited Foster, a product liability case, for continuity-of-the-enterprise exception | Foster standard is inapplicable; the correct standard is mere-continuation requiring common ownership & asset transfer |
| Effect of DNA Buyer Entity’s Non-Affiliation | Plaintiff admitted DNA Buyer was unrelated to Tilton | AVA argued admission foreclosed claim against AVA | Admission did not defeat sufficiency of allegations against AVA as a successor |
Key Cases Cited
- Foster v. Cone–Blanchard Mach. Co., 597 N.W.2d 506 (Mich. 1999) (sets out exceptions to traditional successor liability in Michigan—court clarified Foster's continuity-of-the-enterprise standard is not for mere-continuation exception)
- Turner v. Bituminous Cas. Co., 244 N.W.2d 873 (Mich. 1976) (distinguishes between continuity-of-enterprise and mere-continuation exceptions under Michigan law)
- Shue & Voeks, Inc. v. Amenity Design & Mfg., Inc., 511 N.W.2d 700 (Mich. Ct. App. 1993) (mere-continuation exception analysis focuses on common ownership and continuity of business)