417 F.3d 418 (4th Cir. 2005), 03-1679, Venkatraman v. REI Systems, Inc.

Docket Nº:03-1679.
Citation:417 F.3d 418
Party Name:Kirthi VENKATRAMAN, Plaintiff-Appellant, v. REI SYSTEMS, INCORPORATED, Defendant-Appellee.
Case Date:July 29, 2005
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

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417 F.3d 418 (4th Cir. 2005)

Kirthi VENKATRAMAN, Plaintiff-Appellant,



No. 03-1679.

United States Court of Appeals, Fourth Circuit.

July 29, 2005

Argued Feb. 25, 2004.

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. T. S. Ellis, III, District Judge. CA-03-278-A

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Naren Chaganti, Town & Country, Missouri, for Appellant .

Merrell B. Renaud, SQUIRE, SANDERS & DEMPSEY, L.L.P., Tysons Corner, Virginia, for Appellee.

Before WIDENER and DUNCAN, Circuit Judges, and William D. QUARLES, Jr., United States District Judge for the District of Maryland, sitting by designation.


WIDENER, Circuit Judge:

Alleging racial and national origin discrimination, wrongful discharge, and violations of federal immigration law, Kirthi Venkatraman sued his former employer, REI Systems, Inc. (REI). The district court dismissed the complaint, and we affirm.


Venkatraman is an American citizen of East Indian origin. He worked for REI as a software engineer from July 2001 until March 2002, when he was fired. His complaint alleges that REI only paid "full overtime consideration" to white employees and that he was "not compensated on par with white employees." He alleges that REI allegedly fired him when he complained of this unequal treatment, and he suffered emotional distress as a result.

Venkatraman also claims that in order to hire foreign workers under the H-1B visa program, REI violated 8 U.S.C. § 1182(n) by falsely representing to the Immigration & Naturalization Service that a shortage of qualified U.S. workers existed. According to the complaint, REI also misrepresented that it would pay its H-1B workers the same as its U.S. workers, when it in fact intended to pay the foreign workers less.

The complaint asserts claims of "employment discrimination – unequal treatment" (First); "wrongful discharge in violation of public policy" (Second); "infliction of emotional distress" (Third); and "violation of U[.]S[.] immigration laws" (Fourth). REI moved to dismiss, and the district

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court granted the motion. Venkatraman now appeals the dismissal of the First, Second, and Fourth causes of action.


We review de novo a district court's dismissal under Federal Rule of Civil Procedure 12(b)(6). In general, a motion to dismiss will not be granted unless a plaintiff can prove no set of facts which would support his claim and entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). In considering a motion to dismiss, we accept as true all well-pleaded allegations and view the complaint in the light most favorable to the plaintiff. Mylan Labs, Inc. v. Maktari, 7 F.3d 1130, 1134 (4th Cir. 1993).


Venkatraman first contends that the district court erred in dismissing his employment discrimination claim. The district court construed this claim, which alleges that REI paid Venkatraman less than its white workers and fired him for complaining of this treatment, as arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.(2003). It then dismissed the claim for failure to exhaust administrative remedies.

Before filing a Title VII suit, a plaintiff in Virginia must file a charge with the Equal Employment Opportunity Commission (EEOC) within 300 days of the alleged violation. Edelman v. Lynchburg Coll., 300 F.3d 400, 404 (4th Cir. 2002). As the district court recognized, this statutory prerequisite is mandatory: a violation not made the subject of a timely charge is "the legal equivalent of a discriminatory act which occurred before the statute was passed" and is "merely an unfortunate event in history which has no present legal consequences." United Air Lines v. Evans, 431 U.S. 553, 558 (1977).

Venkatraman does not dispute that he failed to file a charge with the EEOC. Instead, he argues that Count I alleges facts sufficient to support a claim under Title VI, which prohibits discrimination "under any program or activity receiving Federal financial assistance." 42 U.S.C. § 2000d (2003). REI counters that Venkatraman waived the Title VI argument because he failed to raise that jurisdictional basis before the district court.

Initially, we note that the precise question at issue is whether Venkatraman has stated a cause of action under Title VI, not whether federal jurisdiction exists under Title VI. See Montana-Dakota Util. Co. v. N'western Pub. Svc. Co., 341 U.S. 246, 249 (1951) ("As frequently happens where jurisdiction depends on subject matter, the question whether jurisdiction exists has been confused with the question whether the complaint states a cause of action."). Jurisdiction exists over Venkatraman's discrimination claim under 28 U.S.C. § 1331. Whether construed under Title VI or Title VII, it arises under the laws of the United States.

Nevertheless, we agree that Venkatraman waived the Title VI argument by failing to raise it below. Federal Rule of Civil Procedure 8(a) requires only "'a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley, 355 U.S. at 47 (footnote omitted). But Venkatraman, of East Indian ancestry, gave REI no indication of the grounds upon which Count I rests other than plaintiff "was not compensated on par with white employees." He did not mention Title VI in either his complaint or his opposition to REI's motion to dismiss.

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Nor did he allege facts showing that REI received federal financial assistance, or that providing employment is a primary objective of the federal aid. See Trageser v. Libbie Rehab. Hosp., 590 F.2d 87, 88-89 (4th Cir. 1978) (discussing elements of a Title VI claim).

Plaintiff further contends that the complaint indicates the potential for Title VI liability by stating that "REI further violated federal laws regarding nondiscrimination as a Federal Government subcontractor." This statement does not signal a potential Title VI claim, because REI's status as a government contractor is irrelevant to Title VI liability. Title VI coverage turns on the receipt of "federal financial assistance", not the existence of a contractual relationship. To the contrary, the regulations implementing Title VI, the legislative history, and cases interpreting the term all indicate that market contracts between federal contractors and the government do not constitute such "assistance." Only if the government intends to provide a subsidy does Title VI apply. See, e.g., 45 C.F.R. § 80.13(f) (2004) (defining "federal financial assistance"); Letter from Robert Kennedy, Attorney General, to Hon. John Sherman Cooper (April 29, 1964), reprinted in 110 Cong. Rec. 10075, 10076 (1964) ("Title VI does not apply to procurement contracts, or to other contracts which do not involve financial assistance by the United States."); Jacobson v. Delta Airlines, Inc., 742 F.2d 1202, 1209-11 (9th Cir. 1984) (holding that an entity receives "assistance" when it receives a subsidy, as opposed to compensation). Because Title VI does not forbid discrimination by a government contractor, but instead forbids discrimination by entities receiving assistance, the complaint's statement fails as an indicator of Title VI liability.

In short, neither the district court nor REI had notice that Venkatraman intended to rely on Title VI, much less a factual recitation of the elements of a Title VI claim. See Muth v. United States, 1 F.3d 246, 250 (4th Cir. 1993) (noting that issues raised for the first time on appeal are waived unless plain...

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