Azim v. Tortoise Capital Advisors, LLC
| Decision Date | 24 February 2014 |
| Docket Number | Case No. 13-2267-KHV |
| Parties | ARSHAD AZIM, Plaintiff, v. TORTOISE CAPITAL ADVISORS, LLC, et al., Defendants. |
| Court | U.S. District Court — District of Kansas |
Pro se plaintiff Arshad Azim has filed an amended complaint (ECF doc. 20) which asserts religious and national-origin discrimination claims against his former employer Tortoise Capital Advisors, LLC, pursuant to 42 U.S.C. § 2000e (Title VII), and claims against two individuals affiliated with Tortoise, pursuant to 42 U.S.C. § 1981. Plaintiff has filed a motion for leave to further amend his complaint, seeking to add four claims and twelve defendants (ECF doc. 35). The current defendants oppose the motion, arguing that plaintiff's proposed amendments are futile. Defendants have filed a motion for the imposition of sanctions pursuant to Fed. R. Civ. P. 11, based on plaintiff's refusal to withdraw his request to add claims that defendants deem frivolous (ECF doc. 39). Because the undersigned U.S. Magistrate Judge, James P. O'Hara, finds two of the four additional proposed claims futile, plaintiff's motion for leave to amend his complaint is granted in part and denied in part. But because the court does not deem plaintiff's conduct sanctionable,defendants' motion for sanctions is denied.
Plaintiff worked for Tortoise, an investment management firm, as a vice president for business development from September 2011 until April 30, 2012. He alleges that in this role, he learned that defendants (among other things) made misrepresentations to become certified as a minority business enterprise, made fraudulent representations to gain potential investments and investors, and made false filings with the Securities and Exchange Commission ("SEC"). He further alleges that he was subject to harassment and discrimination based on his national origin and religion (Islam) by his supervisor, defendant Michelle Kelly, throughout his employment. Plaintiff reported his concerns of harassment and securities-law violations to Tortoise's manager of human resources, Tabitha Boissonneau, on April 16, 2012. On April 30, 2012, plaintiff met with Boissonneau and Tortoise's chief executive officer, Kevin Birzer. During the meeting, Birzer terminated his employment. Then, Boissonneau and Birzer coerced and intimidated plaintiff into signing a "release agreement" waiving his right to bring future legal or administrative claims against defendants.
In addition to his discrimination claims brought under Title VII and § 1981, plaintiffseeks leave to add the following four claims to his complaint: (1) a claim under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank"), 15 U.S.C. § 78u-6(h)(1)(A)(i) (Count III); a conspiracy claim under 42 U.S.C. § 1985(3) (Count IV); a claim under the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1962(c) (Count V); and a RICO conspiracy claim, 18 U.S.C. § 1962(d) (Count VI). Defendants argue that permitting any of these additions would be futile. Defendants also argue that plaintiff's proposed amended complaint violates Fed. R. Civ. P. 8(a)(2)'s requirement that a statement of a claim be "short and plain."
Pursuant to Fed. R. Civ. P. 15(a)(2), once a responsive pleading has been filed, "a party may amend its pleading only with the opposing party's written consent or the court's leave." Rule 15(a)(2) directs the court to "freely give leave when justice so requires." Nonetheless, a court may deny leave to amend when, among other things, amendment would be futile.2 "A proposed amendment is futile if the amended complaint would be subject to dismissal."3 Thus, in considering whether a proposed amendment is futile, the court uses the same analysis that governs a Fed. R. Civ. P. 12(b)(6) motion to dismiss for failure tostate a claim.4 The court will only deny an amendment on the basis of futility when, accepting the well-pleaded allegations of the proposed amended complaint as true and construing them in the light most favorable to the plaintiff, the court determines that plaintiff has not presented "enough facts to state a claim to relief that is plausible on its face."5 "The party opposing the proposed amendment bears the burden of establishing its futility."6
Defendants first argue that plaintiff's proposed amended complaint violates Fed. R. Civ. P. 8(a)(2) because it "is so lengthy, confusing, rambling and unnecessarily and baselessly vitriolic as to be otherwise unintelligible."7 The court is unpersuaded by this argument. The court has studied the proposed amended complaint. While very lengthy, it is reasonably intelligible and clearly sets forth plaintiff's proposed claims. It is no more "vitriolic" then defendants' briefs on the instant motions. The court is mindful that plaintiff is proceeding pro se, and therefore gives plaintiff some latitude regarding the length and format of his proposed amended complaint.8
The court will now examine defendants' futility arguments with respect to each of plaintiff's proposed new claims.
Plaintiff's proposed amended complaint alleges that defendants violated Dodd-Frank by retaliating against him after he reported their violations of securities laws. Congress enacted Dodd-Frank in the wake of the 2008 financial crisis. Section 922 of Dodd-Frank, codified at 15 U.S.C. § 78u-6, attempts to encourage individuals to report violations of U.S. securities laws by, among other things, creating a private cause of action for individuals against employers who retaliate against them for taking specified protected actions.9 Section 922 provides:
Defendants argue that plaintiff cannot be deemed a protected individual under § 922 because he does not qualify as a "whistleblower." Relying on the Fifth Circuit case of Asadi v. G.E. Energy (USA), L.L.C.,11 defendants assert that an individual must report information to the SEC to qualify as a whistleblower. Plaintiff points to contrary authority out of the District of Colorado, however, holding that to qualify as a "whistleblower" under § 922, a person need not have disclosed information to the SEC as long as he makes disclosures required or protected under the laws listed in sub-division (iii).12 Plaintiff contends that he is a whistleblower because he complained to Tortoise's human resources department about Tortoise's securities violations. The Tenth Circuit has not had the opportunity to address this question. Given that there is some authority for plaintiff's position, the undersigned does not find plaintiff's Dodd-Frank claim futile on this basis.
Defendants also make a statutory-construction argument that Dodd-Frank does not provide for individual liability, such that plaintiff should not be permitted to name individuals as defendants in this claim. Defendants cite no case support for their argument. Although the presiding U.S. District Judge, Kathryn H. Vratil, may ultimately adopt defendants' argument on a summary judgment motion, the undersigned does not find plaintiff's Dodd-Frank claim against individuals futile given the state of existing law.
Plaintiff seeks to bring a claim against certain individuals under 42 U.S.C. § 1985(3) for conspiracy to interfere with his civil rights. Section 1985(3) prohibits two or more persons from conspiring "for the purpose of depriving, either directly or indirectly, any person . . . of the equal protection of the laws, or of equal privileges and immunities under the laws."13 "To state a claim under § 1985(3), a plaintiff must show: (1) a conspiracy, motivated by racially discriminatory animus; (2) to deprive plaintiff of equal protection of the laws; (3) an act in furtherance of the conspiracy; and (4) a deprivation of rights resulting therefrom."14 "Section 1985(3) does not create an independent cause of action."15 "Instead, a plaintiff must 'point to independent substantive rights enforceable in the federal courts' to serve as a predicate violation."16
Defendants argue that "[b]ecause Plaintiff's only race-based claims are his Title VII and Section 1981 claims, any proposed amendment to add a Section 1985(3) claim is futile."17 Plaintiff has not specifically stated the civil-rights "predicate violation" on which he is basing his proposed § 1985(3) conspiracy claim. As defendants note, however, plaintiff has alleged violations under Title VII and § 1981. Defendants correctly note that § 1985(3)"may not be invoked to redress violations of Title VII."18 They also argue that a conspiracy to violate rights protected by § 1981 cannot sustain a claim under § 1985(3). Defendants have cited no controlling authority for this latter assertion.
The Tenth Circuit has noted that it has "never considered the question of whether § 1981 may form the substantive basis for violation of § 1985(3)."19 In the absence of controlling law prohibiting such a connection, courts in this circuit have permitted § 1985(3) claims to be brought based on the same alleged violations supporting § 1981 claims.20 Accordingly, the court rejects defendants'...
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