Brown v. Ameriprise Fin. Servs. Inc.
| Decision Date | 07 September 2011 |
| Docket Number | Civ. No. 09-2413 (RHK/FLN) |
| Parties | Rosalind Brown, on behalf of herself and all others similarly situated, Plaintiffs, v. Ameriprise Financial Services, Inc., f/k/a American Express Financial Advisors, Inc., Defendant. |
| Court | U.S. District Court — District of Minnesota |
ORDER ADOPTING REPORT
& RECOMMENDATION IN
PART
Susan Anderson McKay, McKay Law, Chicago, Illinois, for Plaintiff.
Melissa Raphan, Ryan E. Mick, Sarabeth Ackerman, Dorsey & Whitney LLP,
Minneapolis, Minnesota, for Defendant.
This matter is before the Court on Plaintiff's Objections (Doc. No. 140) to Magistrate Judge Noel's August 3, 2011 Report and Recommendation (the "R&R") (Doc. No. 119) regarding Defendant's Motion for Rule 11 Sanctions. For the reasons that follow, the Court will overrule the Objections, adopt the Report & Recommendation in part, and dismiss Plaintiff's Complaint with prejudice.
Plaintiff, an African-American, commenced this action in December 2009. In her three-Count Complaint, she alleged that Defendant, her former employer, had discriminated against her and other similarly situated African-American employees - numbering "at least 1000" (Compl. ¶ 15) - with respect to their terms and conditions of employment. The Complaint was both detailed and far-reaching, spanning 32 pages and 82 paragraphs, containing particularized allegations of specific (and allegedly discriminatory) policies and practices, covering conduct lasting more than a decade and concerning all levels of employment. Counts 1 and 3 asserted claims under 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964, respectively, on behalf of Plaintiff and the putative class; Count 2 asserted a Title VII claim on Plaintiff's behalf alone. The Complaint was signed by Plaintiff's former attorneys, but her current counsel substituted into this case shortly after it was filed. (See Doc. No. 2.)
In response to the Complaint, Defendant filed several Motions, seeking inter alia to streamline discovery regarding the class claims and to dismiss claims brought on behalf of certain class members; Plaintiff opposed these Motions. The Court granted the Motions in part and denied them in part (see Doc. No. 39), and certain class claims survived. Magistrate Judge Noel then held an initial pre-trial conference, after which heissued a scheduling Order setting March 1, 2011, as the deadline for Plaintiff to move for class certification and June 1, 2011, as the discovery cut-off. (See Doc. No. 45.)
The parties then proceeded with discovery, including class discovery, and on December 2 and 3, 2010, Defendant took Plaintiff's deposition. There, she was asked to provide the foundation for many of the specific allegations in her Complaint, but often she was unable to do so. For example, paragraph 43 of the Complaint alleged that "written guidelines permit employees at lower job grades to be paid more than employees at higher grades." Yet, Plaintiff acknowledged that she was unaware of any such "written guidelines." (Brown Dep. at 468.) Paragraph 41 of the Complaint alleged that Similarly, paragraph 42 alleged But when asked whether she had ever had "occasion to look at median salaries for African-American employees and compare those to median salaries for Caucasians," Plaintiff answered in the negative, and she acknowledged that she had never seen any comparison of average salaries between employees with one or five years of service. (Id. at 466-68.) At other times, Plaintiff was asked about certain terms appearing in quotation marks in the Complaint - such as "management nomination" and "work relationships" (Compl. ¶¶ 3(c), 31) - but could not explain where those quoted terms came from or what they meant. (Brown Dep. at 410-12, 455.) She also could not explain what was meant by the allegation in paragraph 34 that "performance is not linked to job title or education." (Id. at 461.)
In addition, certain portions of Plaintiff's testimony contradicted some of the Complaint's class-based allegations. For instance, she testified, "I don't think there's a significant representation of African-Americans among salaried employees" (id. at 419), even though the Complaint alleged that "[f]ew African-Americans advance to senior levels in the Company, especially when compared to the significant representation of African-Americans among salaried employee" (Compl. ¶ 3(d) (emphasis added)). Similarly, the Complaint alleged that Defendant engaged in a pattern and practice of denying opportunities for advancement to African-Americans who were more qualified for promotions than Caucasians. (See id. ¶ 3(c).) But when she was asked to identify an African-American (other than herself) who she "believe[d] was passed over for a promotion in favor of a less-qualified white candidate," she could not do so. (Brown Dep. at 410.)
Following this testimony, Defendant began to investigate. Ultimately, it discovered that Plaintiff's Complaint largely parroted that in another case, in another Court, brought by different plaintiffs against a different company more than a decade earlier: Abdallah v. Coca-Cola Co., Civ. A. No. 1-98-CV-3679 (N.D. Ga. filed Dec. 23, 1998). This is to say, the Complaint here does not simply track the legal theories or claims advanced in Coca-Cola, but rather copies large portions thereof verbatim, including those regarding specific employment policies and practices, particularly with respect to Plaintiff's class claims.
Defendant then wrote Plaintiff's counsel and asked her to dismiss the Complaint as not grounded in fact; Plaintiff refused.2 Defendant then served (but did not file) a Motion for Sanctions under Rule 11 of the Federal Rules of Civil Procedure.3 After Plaintiff maintained her refusal to dismiss the Complaint, Defendant filed the Motion, seeking dismissal of the Complaint and an award of fees and costs for Plaintiff's "detailed and precise allegations without evidentiary support and without having conducted a reasonable inquiry as required by Rule 11." (Doc. No. 50 at 2.)
Plaintiff filed a lengthy response arguing against dismissal. (See Doc. Nos. 73-93.) She asserted that Defendant had taken her deposition testimony out of context and argued that her testimony did, in fact, support both her class-based and individual claims. She also asserted that Defendant's failure to provide discovery had hampered her ability to proffer evidentiary support for her claims. (See Doc. No. 73 at 18-22.) Although she acknowledged that the "wording . . . in many respects is identical, particularly for the class based claims," between her Complaint and the one in Coca-Cola, she asserted that some modifications to the Coca-Cola Complaint had been made, rendering the instant Complaint consistent with the "circumstances of [Plaintiff's] employment." (Id. at 20.)
Defendant's Motion was referred to Magistrate Judge Noel, who held a hearing on July 22, 2011. On August 3, 2011, he issued the R&R, recommending that the Motion be granted in part and denied in part. After reviewing the Complaint, he concluded that "many of the factual allegations supporting Plaintiff's class claims were copied and pasted directly from the Coca-Cola Complaint." (Id. at 4 ().) He also concluded that paragraphs 3(b)-(f), 24-26, 34, 40-42, 44, 46-47, and 51-52, containing "conclusory factual allegations regarding disparities in salary and employment between African-American and Caucasian employees," had been copied from Coca-Cola with the "employment and salary data upon which those allegations were based" simply deleted, and that Plaintiff "was not aware of similar data . . . to support those allegations" against Defendant. (Id.) At bottom, the Magistrate Judge found that "the vast majority of the factual allegations supporting Plaintiff's class claims were taken directly from the Coca-Cola Complaint, and describe the employment practices of that company, not [Defendant]." (Id. at 5.) As a result, he found a clear violation of Federal Rule of Civil Procedure 11(b)(3), which requires a "reasonable inquiry" into the factual allegations in a Complaint before it is filed, to ensure that those allegations enjoy "evidentiary support." (Id.)
Having found Rule 11 violated, Judge Noel proceeded to determine an appropriate sanction. He concluded it was proper to strike all of Plaintiff's class allegations from theComplaint and recommended that she and her current counsel pay the attorneys' fees Defendant incurred defending the class claims. He also concluded that Plaintiff's individual discrimination claims should be permitted to stand. He ordered Defendant to itemize the fees incurred defending the class claims and Defendant duly complied, submitting a request for nearly $137,000. (See Doc. No. 117.)
Plaintiff now objects to the R&R.
When a party objects to a Magistrate Judge's recommended disposition of a dispositive motion, a District Judge must "make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1); accord D. Minn. L.R. 72.2(b). The Court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1). The Court need not conduct a hearing and "may...
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