Chau v. Donovan

• Decision Date: 07 January 2019
• Docket Number: 18-cv-3365 (PKC)
• Citation: 357 F.Supp.3d 276
• Parties: Jenny CHAU, Plaintiff, v. Ryan DONOVAN, Granger Management LLC, and Granger Management Holdings LLC, Defendants.
• Court: U.S. District Court — Southern District of New York

357 F.Supp.3d 276

Jenny CHAU, Plaintiff,

v.Ryan DONOVAN, Granger Management LLC, and Granger Management Holdings LLC, Defendants.

18-cv-3365 (PKC)

United States District Court, S.D. New York.

Signed January 7, 2019

Mark McEldowney Whitney, Whitney Law Group, LLC, Marblehead, MA, for Plaintiff.

George Bliss Schwab, Kasowitz, Benson, Torres LLP, Pearl Zuchlewski, Kraus & Zuchlewski LLP, Andrew J. Ryan, The Ryan Law Group LLP, New York, NY, for Defendants.

OPINION AND ORDER

CASTEL, U.S.D.J.

Plaintiff Jenny Chau alleges in her Second Amended Complaint ("SAC," Doc 21) that defendant Ryan Donovan, as principal and chief compliance officer of Granger Management LLC and Granger Management Holdings LLC (together, "Granger"), misused his position of power to tempt Ms. Chau with a lucrative job opportunity and investment while, during the same period, sexually assaulting her. In this diversity action, Ms. Chau brings claims against Mr. Donovan for assault, battery, intentional and negligent infliction of emotional distress ("IIED" and "NIED"), and claims pursuant to the New York State Human Rights Law, N.Y. Exec. Law § 290 et seq. ("NYSHRL") and the New York City Human Rights Law, N.Y. City Admin. Code § 8-101 et seq. ("NYCHRL"). She alleges that Granger is vicariously liable for Mr. Donovan's actions and also liable as an employer pursuant to the NYCHRL.¹ Mr. Donovan moves, pursuant to Rules 12(b)(1) and 12(b)(6), Fed. R. Civ. P., to dismiss all claims of the SAC except those for battery and assault. Granger moves to dismiss the two counts filed against it. For the reasons that will be explained, the motions will be granted in part and denied in part.

BACKGROUND

Chau and Donovan met as co-workers in 2005 while working at the New York City offices of Bear Stearns. (SAC ¶¶ 13–14.) By 2017, Chau had moved to California and was raising capital for a new venture fund named MotiVentures. (SAC ¶¶ 16, 19–20.) Chau asked Donovan if his company, Granger, which invests money on behalf of a limited number of wealthy families, (SAC ¶ 5), "might want to invest in or partner with MotiVentures." (SAC ¶ 19.) Donovan "confidently assured Chau that Granger would probably invest $25-50 million because his partners trusted him." (SAC ¶ 26.) Donovan joked with Chau that "if Granger declined to invest then he would offer $5,000 of his own money into Chau's fund if he could have a threesome with Chau and his wife." (SAC ¶ 28.) Donovan continued to text with Chau and "divert talk of business into talk of alcohol and sex." (SAC ¶ 29; see id. ¶ 33.)

Chau, Donovan, and Chau's MotiVentures partners met for dinner in New York City on April 19, 2017 to discuss Granger's potential investment. (SAC ¶ 35.) After dinner, Chau and Donovan went to a hotel bar to discuss Chau's MotiVentures partners. (SAC ¶ 36.) Donovan "confessed that ... he was only using his authority and influence within Granger to steer an investment to MotiVentures ‘because of her,’ " and "fe[ ]d Chau drinks, with the intent to get her drunk." (SAC ¶¶ 36–37.) Donovan began "touching Chau inappropriately," "convinced Chau to ride in his Uber" where he continued to touch her inappropriately, and "forced his way onto the elevator" at her hotel despite repeated objections. (SAC ¶¶ 37–39.) When Chau opened the door to her hotel room, Donovan "powerfully pushed past her into the room," "began touching her in a sexual way," "removed his pants and forced himself on top of her," and groped, kissed, digitally penetrated her, and masturbated next to her without Chau's consent. (SAC ¶ 39.)

Following the April 19, 2017 encounter, Chau "continued communicating with Donovan because she did not want to lose the potential investment," and Donovan continued to "change[ ] the subject to sex." (SAC ¶¶ 43, 45, 47, 49, 61.) In May 2017 Donovan informed Chau that Granger would not be investing in MotiVentures. (SAC ¶ 46.) He also informed her that "he would find a spot for Chau to work for him at Granger" if her position at MotiVentures was terminated. (SAC ¶ 46.) Donovan told Chau that getting her a job would be "99% [his] call," and quoted her a starting salary of $250,000 with bonuses around $500,000. (SAC ¶¶ 51–52.) He also stated that Chau "might be able to do some things that would get [him] to pay [her] more," which Chau understood to refer to sexual acts with him and his wife. (SAC ¶ 53.) Donovan and Chau discussed "start dates and how Chau would have to come to New York City to interview." (SAC ¶ 53.)

Donovan informed Chau he wanted her to meet "his bosses," the two named partners of Granger, but did not want to pay for Chau to fly to New York. (SAC ¶ 56.) He instead suggested she meet him in San Diego, CA in October 2017, where he would be attending a conference, to discuss the job. (SAC ¶ 56.) In San Diego they "discussed salaries, the type of work Chau would do, and Granger in general." (SAC ¶ 58.) Donovan made Chau understand that her job responsibilities would include investment advising, sales, and operations. (SAC ¶ 59.) During the meeting, Donovan groped and touched Chau inappropriately while in San Diego at a hotel bar despite her repeated objections. (SAC ¶ 62.) Shortly after Donovan returned to New York City, he informed Chau that Granger could no longer hire her. (SAC ¶ 63.)

Chau spoke with friends and various mental health professionals about her experience and "came to realize that the treatment that she had suffered" by Donovan "was wrong." (SAC ¶¶ 65–68.) She brought suit in April 2018 (Doc 1.)

APPLICABLE LAW

To survive a motion to dismiss under Rule 12(b)(6), Fed. R. Civ. P., "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). In assessing the sufficient of a pleading, a court must disregard legal conclusions, which are not entitled to the presumption of truth. Id. Instead, a court must examine the well-pleaded factual allegations and "determine whether they plausibly give rise to an entitlement to relief." Id. at 679, 129 S.Ct. 1937. For the purposes of a motion to dismiss, the Court must accept all factual allegations in the SAC as true and draw all reasonable inferences in the plaintiff's favor. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). A court may take judicial notice of facts "capable of accurate and ready determination by resort to sources whose accuracy cannot be reasonably ... questioned," In re DDAVP Indirect Purchaser Antitrust Litig., 903 F.Supp.2d 198, 208 (S.D.N.Y. 2012) (quoting United States v. Bryant, 402 F. App'x 543, 545 (2d Cir. 2010) ), and of court filings "to establish the[ir] existence," but not for the truth of the facts asserted therein, Glob. Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir. 2006) (internal quotation marks and citation omitted). "Dismissal is appropriate when ‘it is clear from the face of the complaint, and matters of which the court may take judicial notice, that the plaintiff's claims are barred as a matter of law.’ " Parkcentral Glob. Hub Ltd. v. Porsche Auto. Holdings SE, 763 F.3d 198, 208–09 (2d Cir. 2014) (quoting Conopco, Inc. v. Roll Int'l, 231 F.3d 82, 86 (2d Cir. 2000) ).

A motion to dismiss under Rule 12(b)(1), Fed. R. Civ. P., is decided under the same standards as a motion to dismiss for failure to state a claim under Rule 12(b)(6). Lerner v. Fleet Bank, N.A., 318 F.3d 113, 128 (2d Cir. 2008) (Sotomayor, J.), abrogated on other grounds by Lexmark Int'l, Inv. v. Static Control Components, Inc., 572 U.S. 118, 126–27, 134 S.Ct. 1377, 188 L.Ed.2d 392 (2014). However, "[i]n resolving a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) a district court may consider evidence outside the pleadings." Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008). Unlike a Rule 12(b)(6) motion, for which the movant bears the burden of proof, on Rule 12(b)(1) motions "[t]he plaintiff bears the burden of proving subject matter jurisdiction by a preponderance of the evidence." Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005).

The parties have assumed New York State law governs plaintiff's asserted claims. "[I]mplied consent ... is sufficient to establish choice of law." Alphonse Hotel Corp. v. Tran, 828 F.3d 146, 152 (2d Cir. 2016) (quoting Tehran-Berkeley Civil & Envtl. Eng'rs v. Tippetts-Abbett-McCarthy-Stratton, 888 F.2d 239, 242 (2d Cir. 1989) ).

DISCUSSION

I. Donovan's Motion to Dismiss

Donovan moves to dismiss Counts III (intentional infliction of emotional distress), IV (negligent infliction of emotional distress), and VI (discrimination in violation of the NYCHRL and NYSHRL) of the SAC pursuant to Rules 12(b)(1) and 12(b)(6), Fed. R. Civ. P. The Court will address the statutory claims first.

a. Discrimination in violation of New York City and State Human Rights Laws

Chau claims that Donovan failed to hire her because of her gender after she refused to submit to sexual demands in violation of the NYSHRL, N.Y. Exec. Law § 290 et seq., and NYCHRL, N.Y.C. Admin. Code § 8-101 et seq. Donovan moves to dismiss those claims because Chau failed to allege discriminatory impact in New York. In the alternative, he moves to dismiss Chau's NYSHRL claim for failure to allege Donovan meets the "employer" requirement, and the NYCHRL claim for failure to serve notice pursuant to § 8-502(c) of the Administrative Code.²

i. Chau's claims meet the impact requirement of the NYSHRL and NYCHRL

"In order for a nonresident to invoke the protections of the NYSHRL and NYCHRL, she must show that the discriminatory act had an impact within the boundaries of the State and City, respectively." E.E.O.C. v. Bloomberg L.P., 967 F.Supp.2d 816, 865 (S.D.N.Y. 2013) (citing Hoffman v. Parade Publ'ns, 15 N.Y.3d 285, 907...