ATC Healthcare Servs., Inc. v. RCM Techs., Inc.

282 F. Supp. 3d 1043
CourtDistrict Court, E.D. Illinois
DecidedSeptember 30, 2017
DocketNo. 15 C 08020
StatusPublished
Cited by14 cases

This text of 282 F. Supp. 3d 1043 (ATC Healthcare Servs., Inc. v. RCM Techs., Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ATC Healthcare Servs., Inc. v. RCM Techs., Inc., 282 F. Supp. 3d 1043 (illinoised 2017).

Opinion

Honorable Edmond E. Chang, United States District Judge

ATC Healthcare Services brought this suit against a competitor, RCM Technologies, and the Board of Education of the City of Chicago (which runs the Chicago Public Schools, so call them "CPS"). In the initial complaint, ATC alleged violations of the Illinois Uniform Deceptive Trade Practices Act (UDTPA), 815 ILCS 510/2(a) ; the Illinois Consumer Fraud and Deceptive Business Practices Act (the Consumer Fraud Act), 815 ILCS 505/2 ; intentional interference with prospective economic advantage; breach of contract; and intentional interference with contract.1 R. 1, Compl.2 The claims arise from an alleged scheme by CPS and RCM to award the nurse-staffing contract for Chicago Public Schools to RCM and then have RCM take over all of ATC's nurses who were currently being used to staff the contract. Id. In June 2016, this Court dismissed the claims against RCM and CPS without prejudice. R. 47, 6/28/16 Opinion at 1. ATC has since filed an amended complaint asserting just the UDTPA, Consumer Fraud Act, and economic advantage claims. R. 51, Am. Compl. CPS and RCM again filed a joint motion to dismiss all the claims. R. 71, Mot. to Dismiss Am. Compl. For the reasons discussed below, the motion is granted in part and denied in part.

I. Background

For the purposes of this motion, the Court accepts as true the allegations in ATC's amended complaint. Erickson v. Pardus , 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007). ATC Healthcare Services, Inc. is a healthcare staffing company who Chicago Public Schools (CPS) had contracted with to provide in-school nurses for its students with disabilities and special needs. R. 51, Am. Compl. ¶¶ 1, 8. ATC and CPS initially entered the contract in 2006, and through a series of renewals, the contract was set to continue through the 2015-16 school year. Id. ¶¶ 8-10. But CPS had the right to terminate the contract at any time so long as it gave ATC notice. R. 51-1 Exh. 1, 2010 Contract at 17 (Section 10.3). The contract also provided CPS with significant discretion in regulating the nursing services, Am. Compl. ¶ 11, assigning nurses to students, and modifying those assignments, while *1047ATC had to comply with all of CPS' requirements unless it had a legitimate business reason to not do so, 2010 Contract at 5 (Section 2.2).

The nurses who ultimately provided the services were employees of ATC- contracted with and paid by ATC-not CPS. Am. Compl. ¶¶ 22-24. They provided a range of critical services to CPS students with disabilities and special needs, including "gastronomy tube feeding, tracheostomy care, ventilator care, medication through a nebulizer or other routes, assistance with range of motion and movement, the administration of medication, as well as urinary and bowel care." Id. ¶ 19. These nurses had unique skills and training, such as language fluencies, that allowed them to work with ESL (English as a Second Language) and special needs children in Chicago schools. Id. ¶¶ 20-21. The nurses were at-will employees of ATC. Id. ¶ 24. But many of them had been with ATC for over two years, although their contracts had to be renewed for each school year. Id. ¶ 28.

In November 2014, CPS decided to exercise its option to potentially terminate the contract and solicited bids from about 10 staffing firms, including ATC and Defendant RCM Technologies, for its outsourced nurse staffing needs. Am. Compl. ¶¶ 32-34. RCM claimed in its bid that it had "100 nurses ready" to staff the schools and that it would use a "rigorous interview, screening and evaluation process" to select nurses for assignments. Id. ¶ 39. But because continuity of care is so important for the children, RCM represented that it usually attempts to "inherit" or "take over" the nurses from the current provider, which it has historically done "on an annual basis" "with considerable ease." Id. ¶¶ 37-38.

ATC alleges that these representations were a lie intended to deceive the public into believing that the bidding process was not a sham. Am. Compl. ¶ 105. Out of one side of its figurative mouth, ATC alleges, CPS had privately assured RCM that it was going to win the bid. Id. ¶ 48. At the same time, CPS acted as though it intended to continue working with ATC. Id. ¶ 52. When ATC sent CPS copies of its proposed 2015-2016 employment agreement, for example, a CPS official replied, "Thanks ....This looks great." Id. ¶ 53. CPS also asked ATC for a list of all currently assigned nurses and which schools they were assigned to, and ATC complied. Id. ¶ 54. During this time, CPS delayed its vote on the bid, causing ATC to incur training and recruitment costs to staff nurses in accordance with its existing contract, which it was still obligated to fulfill. Id. ¶¶ 46-52.

The first ATC heard that its contract was not going to be renewed was from a phone call on June 16, 2015, eight days before the Board publicly voted to approve RCM's competing bid. Am. Compl. ¶ 56. CPS sent a letter stating the same the next day. Id. CPS would not give ATC any reason why it had opted not to award ATC the new contract despite ATC's record of success, and according to ATC, never gave any indication that it was going to help RCM take over ATC's nurses to fulfill the 2015-2016 staffing needs. Id. ¶ 51. In fact, CPS still requested new nursing assignments from ATC two days after it sent them the letter. Id. ¶ 58.

After CPS formally voted to accept RCM's proposal on June 24, 2015, Am. Compl. ¶ 63, CPS informed ATC that it would not need any of its nurses for the remainder of the summer but did not terminate ATC's contract. Id. ¶¶ 64, 78. CPS also sent RCM the complete list of all of ATC's nurses who were currently assigned to the schools, including the nurses' contact information. Id. ¶ 65. RCM did not have a formal contract in place with CPS but nevertheless began "aggressively soliciting"

*1048ATC's nurses-in particular the ones who had worked at CPS for several years- offering them exclusive positions at CPS. Id. ¶ 66-67. RCM told them it was taking over their contracts, and CPS joined in, calling the nurses and the parents of the students, telling them that the nurses would need to work for RCM in order to keep their assignments. Id. ¶ 68.

The solicitations grew more urgent as the school year approached. Am. Compl. ¶ 70. RCM implied that the nurses were already working for RCM by stating that they only needed to "confirm" their previous assignments. Id. ¶ 71. RCM also emailed the nurses-the email was marked "URGENT"-to tell them that they needed to be fingerprinted (though ATC had already done that), id.

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Bluebook (online)
282 F. Supp. 3d 1043, Counsel Stack Legal Research, https://law.counselstack.com/opinion/atc-healthcare-servs-inc-v-rcm-techs-inc-illinoised-2017.