Carter v. Atrium Hospitality

• Citation: 997 F.3d 803
• Decision Date: 17 May 2021
• Docket Number: No. 20-1192,20-1192
• Parties: Joseph CARTER, Plaintiff - Appellant v. ATRIUM HOSPITALITY, Defendant - Appellee
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

997 F.3d 803

Joseph CARTER, Plaintiff - Appellant

v.ATRIUM HOSPITALITY, Defendant - Appellee

No. 20-1192

United States Court of Appeals, Eighth Circuit.

Submitted: January 12, 2021

Filed: May 17, 2021

Rehearing and Rehearing En Banc Denied June 23, 2021

Amanda Marie Bartusek, Bruce Henry Stoltze, Jr., John Q. Stoltze, STOLTZE & STOLTZE, Des Moines, IA, for Plaintiff - Appellant.

Patrick Robert Martin, OGLETREE & DEAKINS, Minneapolis, MN, for Defendant - Appellee.

Before SMITH, Chief Judge, KELLY and ERICKSON, Circuit Judges.

KELLY, Circuit Judge.

Joseph Carter was a Front Desk Clerk at the Sheraton Hotel in West Des Moines, Iowa. In 2017, Atrium Hospitality, which manages the hotel, terminated Carter's employment after an internal investigation found that he allowed a hotel key card to fall into the hands of unauthorized guests. Shortly thereafter, Carter filed a complaint with the Iowa Civil Rights Commission (ICRC). He later filed suit in state court asserting claims for race discrimination, failure to promote, and hostile work environment in violation of the Iowa Civil Rights Act (ICRA). See Iowa Code § 216.6(1)(a) (2018). Atrium removed the case to federal court on the basis of diversity jurisdiction, and the district court¹ subsequently granted summary judgment in favor of Atrium on each of Carter's claims. Carter now appeals.

I.

Atrium hired Carter as a Front Desk Clerk in March 2015. In that role, he was responsible for checking guests in and out of the hotel, issuing room keys, and resolving guest requests. Carter, a Black man, says that he repeatedly experienced race discrimination and harassment during his employment with Atrium. As evidence, he points to racial slurs made by nonsupervisory employees at the hotel as well as hiring decisions that resulted in non-Black applicants being chosen to fill positions he applied for.

In a letter attached to his ICRC complaint, Carter states that maintenance workers at the hotel persisted in calling him "boy" the "entire time" he worked there, despite his repeated complaints to management. The record also shows that, on January 16, 2016, an anonymous caller informed Atrium's Ethics Line that another Front Desk Clerk, Matt Glenn, had called Carter a "stupid n---er" during a recent argument. Atrium interviewed Carter as part of its investigation into this incident. Notes from the interview state that, although Carter heard Glenn use the word "n---er," it was "not towards anyone and he was probably repeating it because [Carter] sa[id] it sometimes." When asked whether any other Atrium employee had ever called him "a derogatory name," Carter responded, "No." Because Carter acknowledged using the n-word, Atrium issued both him and Glenn written disciplinary write-ups at the conclusion of the investigation for using "foul language" that "created a hostile work environment."

In January 2017, Atrium received another anonymous complaint of race discrimination through the Ethics Line. The caller alleged that Atrium "treat[s] Black employees differently than others. This is shown by write-ups and cutting hours." Atrium spoke with Carter as part of its investigation into the complaint. He expressed frustration that Atrium had trained him to carry out the responsibilities of the Night Auditor position yet provided few opportunities for him to perform that role. It is undisputed, however, that Carter was not a Night Auditor and instead merely filled in from time to time for the person who held that role.

During Carter's deposition, he brought up several additional instances of nonsupervisory Atrium employees calling him racial slurs during 2016 and 2017. None of these incidents are mentioned in his ICRC complaint. Carter was unable to provide specifics about these incidents, but he claims that maintenance employees repeatedly used language such as "porch monkeys," "lazy n---ers," and "cotton picking" around him, despite him reporting their comments to management. Carter's Manager as well as the hotel Front Desk Manager, Human Resources Director, and General Manager all denied hearing complaints about any Atrium employee using racial slurs at the West Des Moines Sheraton, including against Carter.

In addition to experiencing racial slurs during his employment with Atrium, Carter asserts the company engaged in discriminatory hiring practices. At issue are the Assistant Front Office Manager positions Carter applied for in 2016. He contends his Manager told him that Atrium would not promote him to Assistant Front Office Manager because he was Black. Atrium indeed hired three other individuals for the positions, none of whom are Black, rather than promoting Carter.

The following year, in April 2017, Atrium terminated Carter's employment after determining that he was responsible for allowing a hotel key card to come into the possession of unauthorized guests. On April 16, 2017, a Domino's Pizza deliveryman arrived at the West Des Moines Sheraton to deliver a pizza to Room 617. When he was unable to get in touch with the room's occupants, the deliveryman asked the Front Desk Manager to call them. But the hotel's booking software revealed that the room was neither occupied by nor reserved for any Sheraton guest, and was in fact marked out of service. When a young girl came down to the lobby to collect the pizza, hotel security followed her and observed her entering Room 617. The Front Desk Manager called the police, and law enforcement discovered a man and two girls in the room as well as evidence of illegal drug use.

During Atrium's investigation into the incident, Carter admitted that he made a key card for the room despite it not being booked, marked the room out of service, and took the key card off hotel premises. A report generated by Atrium's key system revealed that the key the unauthorized guests used to access Room 617 was the same one generated by Carter. At the conclusion of its investigation, Atrium terminated Carter's employment. He acknowledged during his deposition that Atrium fired him over the key incident.

On May 10, 2017, Carter filed a complaint with the ICRC alleging harassment, failure to promote, and wrongful termination. After pursuing his claims before the ICRC, he filed suit in Iowa state court. Atrium removed the case to federal court, and the district court subsequently granted summary judgment in Atrium's favor.²

II.

We review the district court's grant of summary judgment de novo, drawing all reasonable inferences in Carter's favor. Turner v. XTO Energy, Inc., 989 F.3d 625, 627 (8th Cir. 2021). Summary judgment is warranted if "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). To defeat summary judgment, "the nonmoving party must come forward with ‘specific facts showing that there is a genuine issue for trial.’ " Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (cleaned up) (quoting Fed. R. Civ. P. 56(e) ).

III.

Carter asserts claims under the ICRA, which prohibits employers from discriminating against employees or applicants for employment on the basis of race. See Iowa Code § 216.6(1)(a). As the ICRA was modeled after Title VII of the Civil Rights Act of 1964, Iowa courts often "turn to federal law for guidance" on adjudicating claims under the state employment discrimination statute. Vivian v. Madison, 601 N.W.2d 872, 873 (Iowa 1999). Yet Iowa courts are "not bound by federal law, despite [their] consistent utilization of the federal analytical framework." Pecenka v. Fareway Stores, Inc., 672 N.W.2d 800, 803 (Iowa 2003).

Although both parties agree that Iowa law governs, they disagree about the causal standard we apply to ICRA race discrimination and failure to promote claims at summary judgment. Atrium asserts we must apply the burden-shifting framework articulated in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), whereas Carter argues that, under Iowa law, we are bound to apply the motivating factor analysis developed in Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989) (plurality opinion).

This same disagreement came before the Iowa Supreme Court in Hedlund v. State, but the court declined to address it squarely. 930 N.W.2d 707, 719 (Iowa 2019). Historically, Iowa courts have applied the McDonnell Douglas framework to ICRA claims at summary judgment when there is no direct evidence of discrimination. See, e.g., Smidt v. Porter, 695 N.W.2d 9, 14 (Iowa 2005) ; Landals v. George A. Rolfes Co., 454 N.W.2d 891, 893 (Iowa 1990). But, in Hawkins v. Grinnell Regional Medical Center, the Iowa Supreme Court held that the court would "no longer rely on the McDonnell Douglas burden-shifting analysis and determinating-factor standard when instructing the jury" in an ICRA case. 929 N.W.2d 261, 272 (Iowa 2019). Instead, courts applying Iowa law must now use the Price Waterhouse motivating factor standard at trial, which permits an employer to assert the defense that it would have made the same employment decision even had it not taken into account the plaintiff's race or membership in another protected class. Id.; see also Comcast Corp. v. Nat'l Ass'n of Afr. Am.-Owned Media, ––– U.S. ––––, 140 S. Ct. 1009, 1017, 206 L.Ed.2d 356 (2020) (summarizing the Price Waterhouse framework and same-decision affirmative defense). Hedlund, however, reassured courts that Hawkins "did not disturb [the Iowa Supreme Court's] prior law as it applies to summary judgment." Hedlund, 930 N.W.2d at 719 n.8. Accordingly, absent further instruction from the Iowa Supreme Court to the contrary, we will continue to apply the McDonnell Douglas framework to ICRA discrimination claims at summary judgment. Accord Couch v. Am. Bottling Co., 955 F.3d 1106, 1110 (8th Cir. 2020) (reaching this same conclusion).

Under McDonnell Douglas, Carter has the initial burden to establish a prima...