Olsen v Pratt & Whitney Aircraft
136 F3d 273 [1998]
Author:- Sam Biers

PLEADINGS - Fraud

Relevant Facts: Pl, Olsen, was employed w/ Df P & W.  Df notified Pl, then 54 that if he participated in an early retirement program they would increase his pension and provide a $10,000 lump sum payout in exchange for a waiver of claims against the company and the right to sue under Age Discr in Emply Act. Pl enrolled, signed the waiver forms, and agreed to retire. Soon after Df representatives stated his job was secure and recommended he revoke his participation, which Pl did.  8 mos later Pl was terminated as part of a reduction in force. Pl brought a common law complaint for fraud stating that he relied “to his detriment, on the Df’s inducements of job security when he agreed to continue to work for the Df,” and give up his benefits.

Legal Issue(s): Whether the D. Ct erred in dismissing the Pl’s fraud claim for failing to satisfy the pleading requirements?

Court’s Holding: No

Procedure: D Ct dismissed Pl’s complaint; Ct of Apps Agree, but vacate judgment and remand w/ opportunity to amend.

Law or Rule(s): When a complaint charges fraud, it must 1) detail the statements . . .that the Pl contends are fraudulent, 2) identify the speaker, 3) state where and when the statements . . were made, and 4) explain why the statements are fraudulent.

Court Rationale: Pl’s allegations of fraud are conclusory and lacking in particulars.  He alleges the “the Df, through its agents, servants, and employees, advised, counseled, and recommended” that he revoke his participation in the program.  He does not specify what was said, the terms of the advise, counsel, and recommendations; who said it, and what positions were held by these ‘agents, servants, and employees,’ whose words are alleged to bind or be imputed to the company; where and when these words of advice, counsel, and recommendation were imparted; and why these predictions of future events were fraudulent. Pls whose complaints are dismissed pursuant to Rule 9 (b) are typically given an opportunity to amend their complaint.

Plaintiff’s Argument: The D Ct erred in dismissing the common law fraud claim (w/ prejudice [can’t bring back]), b/c it is preempted by the Employee Retirement Income Security Act.

Defendant’s Argument: Pl’s complaint alleging fraud fails to comply with the pleading requirements of Rule 9 (b).