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Hickey v. General Electric Co.

United States District Court, W.D. Kentucky, Louisville Division

March 8, 2017

LOGAN HICKEY PLAINTIFF
v.
GENERAL ELECTRIC COMPANY DEFENDANT

          MEMORANDUM OPINION AND ORDER

          THOMAS B. RUSSELL, SENIOR JUDGE UNITED STATES DISTRICT COURT

         Plaintiff Logan Hickey alleges that after General Electric failed to accommodate his disability and terminated his employment, it falsely told Kentucky authorities that he had voluntarily quit. Because of this misrepresentation, Hickey claims, he was deprived of unemployment benefits for some period of time. Ultimately, the Commission reversed its initial determination, and awarded Hickey full benefits. He brought suit against GE, seeking redress for the harm he suffered due to being temporarily deprived of his unemployment benefits, as well as punitive damages.

         Under Kentucky law, an employer commits a crime when it “knowingly makes a false statement or representation . . . to prevent or reduce the payment of [unemployment] benefits to any worker entitled thereto.” KRS 341.990(6)(a). GE now moves to dismiss Count III of Hickey's complaint, arguing that he may not bring a civil claim based upon GE's alleged violation of that statute, KRS 341.990(6)(a). [DN 9; DN 9-1 at 1-8.] Further, GE contends that even if Hickey's third claim is cognizable, he has nothing to recover, because he eventually received the unemployment benefits to which he was entitled. [DN 9-1 at 8-12.] Hickey responded, [DN 10-1], and GE replied, [DN 11.] This matter is ripe for adjudication. Because GE's motion necessarily turns upon a novel issue of state law, the Court will certify a question to the Kentucky Supreme Court pursuant to Kentucky Rule of Civil Procedure (CR) 76.37.

         I. Facts and Procedural History[1]

For a time, Plaintiff Logan Hickey was employed as a first-shift production line worker at General Electric's Appliance Park in Louisville, Kentucky. [DN 1-2 at 4.] Several months after he was hired, GE sought to move Hickey to second shift. [Id.] Hickey suffers from attention-deficit/hyperactivity disorder (ADHD), a disability that “interferes with his ability to regulate his sleep, focus his attention on tasks, and keep track of basic tasks with full mental cognition.” [Id.] Although Hickey uses medicine to manage his ADHD, he found it difficult “to maintain full consciousness and alertness on the production line” during GE's second shift. [Id.] After consulting with his doctor, Hickey requested through GE's human resources department that he be placed back on first shift. [Id. at 4-5.] GE refused and placed him on unpaid leave. [Id. at 5-6.] Following negotiations between Hickey, his legal counsel, and GE's medical department, Hickey alleges that GE gave him a choice: he could either change his medication regimen and resume working second shift or resign. [Id. at 6.] Eventually, Hickey received a letter from GE on October 6, 2015, informing him that his employment was being terminated, effective on that date. [Id. at 6-7.] Hickey's union later informed him that GE told the union Hickey's termination date was October 13. [Id. at 7.] By this time, Hickey had been off work for a month. [Id.]

         After he was let go, Hickey sought unemployment benefits. [Id.] GE opposed Hickey's application for benefits, telling the Kentucky's Division of Unemployment Insurance that Hickey had voluntarily quit. [Id.] Based upon that representation, Hickey's claim for unemployment was initially denied. [Id.] Only after successive appeals to the Division referee and the Kentucky Unemployment Insurance Commission (KUIC), respectively, did Hickey receive the benefits to which he was entitled. [Id. at 7, 12.]

         Hickey then brought the instant suit in Jefferson County, Kentucky Circuit Court. In the first two claims of his tripartite complaint, Hickey alleges that GE violated both the Kentucky Civil Rights Act (KCRA) and the Americans with Disabilities Act (ADA) by failing to accommodate his disability and by retaliating against him when he sought an accommodation. See [id. at 4-10.] In his third claim, styled “Wrongful Opposition to Unemployment Insurance Benefits, ” Hickey asserts that GE violated KRS 341.990(6)(a) by informing Kentucky authorities that he voluntarily resigned, when he was in fact terminated. [Id. at 11 (emphasis removed).] That statute makes it a crime to “knowingly make[] a false statement or representation . . . to prevent or reduce the payment of benefits to any worker entitled thereto.” KRS 341.990(6)(a). Hickey further claims that as a member of the class of persons KRS 341.990(6)(a) was designed to protect, he is entitled to recover from GE “such damages as he sustained by reason of [GE's] violation” under KRS 446.070, Kentucky's negligence per se statute. [DN 1-2 at 12.]

         GE removed Hickey's suit to federal court. See [DN 1.] Jurisdiction is proper because this Court has original subject-matter jurisdiction over Hickey's federal claims and supplemental jurisdiction over his state-law claims, and this district and division embraces the place where his state suit was filed. 28 U.S.C. §§ 1331, 1367(a), 1441. GE now asks this Court to dismiss Hickey's third claim, arguing that Kentucky law does not recognize a private right of action under KRS 341.990(6)(a), and even if it did, Hickey has nothing left to recover. See [DN 9; DN 9-1.] Hickey responded, [DN 10-1], and GE replied, [DN 11.]

         II. Discussion

         This case presents a matter of apparent first impression. No court interpreting Kentucky law has decided whether a plaintiff may use KRS 446.070 as a vehicle to maintain a standalone claim for his former employer's violation of KRS 341.990(6)(a), nor is the answer to that question readily apparent based upon the statutory scheme and Kentucky precedent. Because Hickey's claim involves a novel issue of state law, this Court could in its discretion decline to exercise supplemental jurisdiction over Count III of Hickey's complaint. See 28 U.S.C. § 1367(c). However, to avoid piecemeal litigation and to obtain a definitive answer that will provide guidance in similar cases, the Court will instead certify a question of law to the Kentucky Supreme Court.

         Nearly eight decades ago, the Kentucky General Assembly enacted the state's first Unemployment Compensation Act “to provide benefits for . . . those employees who have been forced to leave their employment because of forces beyond their control.” Ky. Unemployment Ins. Comm'n v. Kroehler Mfg. Co., 352 S.W.2d 212, 214 (Ky. 1961). “In order to receive [unemployment] benefits, the worker must prove (or the employer, conversely, disprove) that he or she was involuntarily separated from employment without good cause on the employer's part. Bd. of Ed.of Covington v. Gray, 806 S.W.2d 400, 402 (Ky. Ct. App. 1991). To that end, Kentucky's unemployment scheme criminalizes the making of certain false statements. Pertinent to this case,

[a]ny person who knowingly makes a false statement or representation, or who knowingly fails to disclose a material fact to prevent or reduce the payment of benefits to any worker entitled thereto, or to avoid becoming or remaining subject to this chapter, or to avoid or reduce any payment required of an employing unit under this chapter shall be guilty of a Class A misdemeanor unless the liability avoided or attempted to be avoided is one hundred dollars ($100) or more, in which case he shall be guilty of a Class D felony.

KRS 341.990(6)(a). The statutory scheme does not provide for a private right of action based upon the violation of the false statement provision.

         To support his third claim against GE, Hickey relies upon KRS 446.070.Commonly known as Kentucky's negligence per se statute, KRS 446.070 provides that “[a] person injured by the violation of any statute may recover from the offender such damages as he sustained by reason of the violation, although a penalty or forfeiture is imposed for such violation.” The Kentucky Supreme Court has held that “the statute applies when the alleged offender violates a statute and the plaintiff comes within the class of persons indented to be protected by the statute.” St. Luke Hosp., Inc. v. Straub, 354 S.W.3d 529, 534 (Ky. 2011) (citing Davidson v. Am. Freightways, Inc., 25 S.W.3d 94, 99-100 (Ky. 2000)). Further, “[t]he statute must have been specifically intended to prevent the type of occurrence that took place, and the violation must have been a substantial factor in causing the result.” Hargis v. Baize, 168 S.W.3d 36, 46 (Ky. 2005) (citing Isaacs v. Smith, 5 S.W.3d 500, 502 (Ky. 1999)). KRS 446.070 will only apply, however, where “the statute is penal in nature, or where by its terms the statute does not prescribe the remedy for its violation.” Grzyb v. Evans, 700 S.W.2d 399, 401 (Ky. ...


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