Morrison v. International Programs Consortium

• Citation: 253 F.3d 5
• Decision Date: 22 June 2001
• Docket Number: No. 00-7150,00-7150
• Parties: (D.C. Cir. 2001) Cynthia Miranda Morrison, Appellant v. International Programs Consortium, Inc. and Kathleen M. Hanlon, Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 5

253 F.3d 5 (D.C. Cir. 2001)

Cynthia Miranda Morrison, Appellant v. International Programs Consortium, Inc. and Kathleen M. Hanlon, Appellees

No. 00-7150

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 19, 2001

Decided June 22, 2001

[Copyrighted Material Omitted] Appeal from the United States District Court for the District of Columbia (No. 97cv01837)

Jerry R. Goldstein argued the cause for the appellant.

Ernest C. Baynard, III argued the cause for the appellees.

Before: Edwards, Chief Judge, Williams and Henderson, Circuit Judges.

Opinion for the court filed by Circuit Judge Henderson.

Karen LeCraft Henderson, Circuit Judge:

Appellant Cynthia Miranda Morrison appeals the district court's denial of her motion for partial summary judgment and its grant of the appellees' motion for judgment as a matter of law. She also challenges the court's evidentiary ruling excluding documentation of an IRS assessment and levy. For the reasons that follow, we affirm the district court's denial of summary judgment and its evidentiary ruling but reverse the court's grant of judgment as a matter of law.

I. Background

In June 1994 appellee Katie Hanlon, president of appellee International Programs Consortium, Inc. (IPC), hired Morrison as a consultant to perform recruiting and management tasks pursuant to a series of written contracts. After the contracts expired in late 1994 Morrison continued to perform consulting work for IPC and also began to perform various office tasks and was required to prepare daily activity sheets for Hanlon. Morrison, however, continued to consider herself an independent contractor and submitted invoices to IPC on "C. Miranda Morrison Consulting" letterhead.

On July 5, 1995 Morrison wrote Hanlon to notify her that as of August 1, 1995 she "will no longer be offering services as a consultant to IPC." Letter from C. Miranda Morrison to Kathleen M. Hanlon (July 5, 1995), reprinted at JA 319. She continued to work for IPC during July, concentrating primarily on a U.S. Agency for International Development (USAID) delivery order (the Moldova project). On July 28, 1995 Hanlon terminated Morrison for failing to take direction as well as for taking days off from work without permission. Morrison subsequently submitted her July 1995 time and expense statements which reflected $4061.64 for hours worked (22 days at $184.62 per day) and $228.26 for expenses she paid on behalf of IPC. Neither Hanlon nor IPC paid Morrison for her time or expenses.

On January 8, 1996 Morrison filed with the IRS District Director a request for "Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding" on IRS Form SS-8. IPC responded to the IRS's subsequent request for further information through its certified public accountant, explaining why it believed Morrison to be an independent contractor while she worked for IPC. The IRS District Director then determined that under 26 U.S.C. 3121(d)(2) Morrison was an employee rather than an independent contractor. The determination noted, however, that "[a]s we are not in a position to personally judge the validity of the facts provided, our determination is based on the information presented." Letter from Michael M. Greenspan, IRS District Director, to Kathleen M. Hanlon (July 1, 1996), reprinted at JA 356. It explained that "[w]e have submitted an Information Report to the IRS District Office having examination jurisdiction for your area. It may be necessary to initiate an examination of your Federal employment taxes in this matter." Id. The IRS ultimately assessed taxes and penalties totaling $3530.64 against IPC on the ground that Morrison had been an IPC employee during the entire time she worked for IPC in 1995. The IRS subsequently levied on IPC's bank account to satisfy the assessment. Neither Hanlon nor IPC appealed the IRS assessment or levy.

On August 14, 1997 Morrison brought suit in the district court against the appellees,¹ alleging that she had been an IPC employee in 1995 and that the appellees had violated (a) the Fair Labor Standards Act (FLSA), 29 U.S.C. 216, by failing to pay her minimum wages and overtime for weeks in which she worked more than 40 hours in July 1995 (Count I), (b) the D.C. Payment and Collection of Wages Law, D.C. Code §§ 36-101 et seq., by failing to pay her for July wages and expenses advanced on behalf of IPC (Count II), (c) the D.C. Minimum Wage Act, D.C. Code §§ 36-220 et seq., by failing to pay her minimum wages and overtime (Count III) and (d) its contractual obligation to reimburse her for $228.26 in expenses that she incurred on behalf of IPC (Count IV). Before trial Morrison sought partial summary judgment on counts I, II and III, maintaining that the IRS determination had preclusive effect on the question of her status as an employee under the FLSA and D.C. labor laws. At the time she moved for summary judgment, she relied solely on the IRS determination letter; she did not submit documents relating to the assessment and levy because the appellees had failed to produce them. The trial court denied the motion for partial summary judgment because (1) Morrison failed to produce evidence that the IRS ever investigated the matter beyond its initial determination or that IPC paid any assessed taxes and penalties; (2) the IRS did not act in a judicial capacity when it issued the determination letter; and (3) according to the definition of "employee" under IRS regulations Morrison was not entitled to any "employee" rights under the FLSA, the D.C. Wages Law or the D.C. Minimum Wage Act. See Morrison v. International Programs Consortium, Inc., No. 97-1837, slip op. at 5-8 (D.D.C. filed Feb. 4, 2000). Morrison appeals this ruling.

The case was then tried before a jury. At trial the magistrate judge refused to admit documents detailing the IRS assessment and levy because "the court finds that they are not relevant to any issue which would be before the jury." JA 267. This is the second ruling Morrison appeals. At the conclusion of Morrison's case the judge provided Hanlon, who was representing herself, a copy of Fed. R. Civ. P. 50 and granted Hanlon's subsequent motion for judgment as a matter of law on all four counts, concluding that Morrison presented no evidence to support her contention that she was an employee of IPC. JA 299-303. This is the final ruling Morrison appeals.

II. Analysis

We review de novo the trial court's ruling on Morrison's motion for summary judgment, see Crawford v. Signet Bank, 179 F.3d 926, 928 (D.C. Cir. 1999), as well as its grant of judgment as a matter of law to the appellees. Richardson v. Richardson-Merrell, Inc., 857 F.2d 823, 827-28 (D.C. Cir. 1988); McNeal v. Hi-Lo Powered Scaffolding, Inc., 836 F.2d 637, 640-41 (D.C. Cir.1988). We review findings of fact for clear error, Fed. R. Civ. P. 52(a); Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042, 1045 (5th Cir. 1987), but review de novo questions of law, including the question of employee status. See Mr. W Fireworks, 814 F.2d at 1045; see also United States v. Bridges, 175 F.3d 1062, 1065 (D.C. Cir. 1999). Finally, our review of the trial court's evidentiary ruling is for abuse of discretion. See FRE 103(a); see also United States v. Clarke, 24 F.3d 257, 265-67 (D.C. Cir. 1994).

A. Summary Judgment

Morrison moved for summary judgment on counts I, II and III of her complaint on the ground that the IRS had preclusively decided whether Morrison was an IPC employee under federal and D.C. labor law. The district court denied the motion. We affirm.

The United States Supreme Court has "long favored application of the common-law doctrines of collateral estoppel (as to issues) and res judicata (as to claims) to those determinations of administrative bodies that have attained finality." Astoria Fed. Savings & Loan Ass'n v. Solimino, 501 U.S. 104, 107 (1991). "When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose." United States v. Utah Constr. & Mining Co., 384 U.S. 394, 422 (1966). Acting in a judicial capacity includes utilizing "procedure that seems an adequate substitute for judicial procedure." 18 Wright, Miller & Cooper, Federal Practice and Procedure 4475, at 764-65 (1981). There is no evidence that the issue of Morrison's employment status was "actually and necessarily litigated and decided in a prior final judgment." See Nasem v. Brown, 595 F.2d 801, 805 (D.C. Cir. 1979). The IRS was careful not to decide the accuracy of the information Hanlon presented to it. See Letter from Michael M. Greenspan, IRS District to Kathleen M. Hanlon (July 1, 1996), reprinted in JA 356. We do not accept Morrison's assertion that Hanlon's right of appeal from the ruling converted the IRS determination into an adjudication of Morrison's employment status under the FLSA or D.C. labor laws.² Accordingly the IRS determination is not entitled to preclusive effect on the issue of Morrison's employment status and the district court properly denied Morrison's motion for summary judgment on counts I, II and III.

B. Evidentiary Ruling

The district court excluded as irrelevant IPC's submissions to the IRS as well as documents relating to the IRS assessment and levy on IPC's bank account. JA 268. Morrison argues that the evidence was relevant to the issue of the preclusive effect of the IRS action. She does not argue that the evidence was relevant to any other issue, including whether she was an employee under the economic reality test. Because the IRS action had no preclusive effect on whether Morrison was an employee under the FLSA and D.C. labor laws, its exclusion was proper; the evidence was not relevant to any issue before the court. Fed. R. Evid. 402.

C. Judgment as a Matter of Law

Rule 50(a...