Cirocco v. McMahon

• Decision Date: 15 April 2019
• Docket Number: No. 18-1096,18-1096
• Parties: SUE CIROCCO, Plaintiff - Appellant, v. LINDA MCMAHON, in her official capacity as Administrator of the United States Small Business Administration, Defendant - Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

SUE CIROCCO, Plaintiff - Appellant, v. LINDA MCMAHON, in her official capacity as Administrator

of the United States Small Business Administration, Defendant - Appellee.

No. 18-1096

UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

April 15, 2019

(D.C. No. 1:17-CV-01588-NYW)

(D. Colo.)

ORDER AND JUDGMENT^*

Before HOLMES, BACHARACH, and PHILLIPS, Circuit Judges.

In this employment-discrimination case, Sue Cirocco appeals from a district court order that dismissed her complaint against the United States Small Business Administration (SBA) for lack of subject-matter jurisdiction. Exercising appellate jurisdiction under 28 U.S.C. § 1291, we affirm the district court's decision that Ms. Cirocco failed to exhaust her administrative remedies but remand with instructions tothe district court to vacate its order in its entirety and to dismiss the case without prejudice based on the affirmative defense of failure to exhaust administrative remedies, rather than for lack of subject-matter jurisdiction.

BACKGROUND

Ms. Cirocco began working for the SBA in 2009 as a Finance Division Manager in the Denver, Colorado office. In December 2012, she was promoted to Finance Director over two male employees, Rory Berges and James Bates, both of whom subsequently filed complaints with the Equal Employment Opportunity Commission ("EEO complaints").

Roughly eleven months after her promotion, Timothy Gribben became Ms. Cirocco's supervisor. According to Ms. Cirocco, Gribben excluded her from meetings with Bates and reversed the performance ratings she had set for him. Gribben also allegedly instructed Ms. Cirocco not to discipline Bates for being verbally abusive with a female coworker, and Gribben unnecessarily reprimanded Ms. Cirocco for retaliating against Berges. Further, Gribben allowed Bates to obtain training, but he would not approve Ms. Cirocco's request to travel to an educational conference.

For Ms. Cirocco's 2014 annual review, Gribben gave her a "3 [out] of 5" score due to complaints about her conduct. Aplt. App. at 9. Ms. Cirocco alleges that the score "was not established in fact," id., and was inconsistent with a prior female supervisor's opinion that she was "doing a fabulous job," id. at 10 (internal quotation marks omitted).

In February 2015, Ms. Cirocco filed an EEO complaint. Therein, she complained she suffered (1) discrimination when Gribben gave her a 3 performance score, and(2) retaliation when Gribben "overturned the 4 rating [she] had given" Bates and instead "increased [his] rating to a 5." Id. at 37. The SBA Office of Diversity, Inclusion and Civil Rights accepted for investigation whether her own performance rating was the product of sex discrimination. But it dismissed her challenge to the alteration of Bates' score because she had not "suffered a direct, personal deprivation at the hands of the employer on a basis covered by EEO statues [sic]." Id. at 45.

Ms. Cirocco alleged that after filing her EEO complaint, the SBA retaliated against her by conducting "an extensive investigation," moving her office, and reducing her staff "to comply with 'best practices.'" Id. at 11. She further claimed that by April 2015, "the stress and anxiety . . . became unmanageable," requiring her to take a leave of absence and seek employment elsewhere. Id. at 12.

EEO Investigator Ralph Gay began investigating Ms. Cirocco's case in May 2015. On May 28, he emailed Ms. Cirocco, introducing himself and asking to schedule an interview in the presence of a court reporter. Ms. Cirocco replied that she wished to pursue her EEO complaint, but she could not be interviewed until she had "recovered enough." Id. at 50. Over the next several months, Gay repeatedly attempted to schedule an interview with Ms. Cirocco. She declined, however, claiming it would be too intimidating and stressful.¹ Gay ultimately "conclude[d] the investigation without [her] input." Id. at 48.

After Gay issued a report, Ms. Cirocco requested a hearing in November 2015 before an administrative law judge (ALJ). On February 6, 2017, the parties appeared telephonically before an ALJ, who directed the initiation of discovery, with a completion date of May 12, 2017, on the single issue accepted for review—Ms. Cirocco's 2014 performance score. The SBA's counsel served discovery requests on Ms. Cirocco's counsel. But after Ms. Cirocco's counsel failed to respond or serve any discovery requests, the SBA, on June 16, 2017, moved for a decision.

Instead of responding to the SBA's motion, Ms. Cirocco's counsel filed a complaint in federal district court on June 29, 2017, asserting Title VII sex-discrimination and retaliation claims. Because of the pending federal case, the ALJ dismissed Ms. Cirocco's administrative case.

In federal court, the SBA moved to dismiss Ms. Cirocco's complaint for lack of subject matter jurisdiction and failure to state a claim, arguing that Ms. Cirocco'sdiscrimination and retaliation claims were unexhausted. Specifically, as to Ms. Cirocco's discrimination claim, the SBA asserted that "she failed to participate in [her EEO complaint's] adjudication and [she] ultimately abandoned" it. Id. at 17. With respect to her retaliation claim, the SBA maintained that she simply "never pursued any administrative remedies" regarding retaliation. Id.

Ms. Cirocco's counsel withdrew. In a two-page, pro se response to the motion to dismiss, Ms. Cirocco discussed the working conditions she considered discriminatory and retaliatory. In regard to exhaustion, she stated that her former counsel advised her to file a case in federal court because the SBA's counsel had not "acted in good faith with him." Id. at 57.

The district court granted the SBA's motion to dismiss, concluding that Ms. Cirocco failed to exhaust (1) her discrimination claim by not cooperating in the administrative proceedings; and (2) her retaliation claim by not administratively contesting the SBA's dismissal of her original claim and not filing a new EEO complaint for the separate allegations raised in her federal court complaint. The district court viewed the failure to exhaust as a jurisdictional defect, given this court's then-existing case law. See Shikles v. Sprint/United Mgmt. Co., 426 F.3d 1304, 1317 (10th Cir. 2005) (stating that "[u]nlike many other circuits, we have held that a plaintiff's exhaustion of his or her administrative remedies is a jurisdictional prerequisite to suit under Title VII—not merely a condition precedent to suit").

Ms. Cirocco appeals, represented by new counsel.

DISCUSSION

I. Lincoln v. BNSF Railway Co.

After Ms. Cirocco filed her opening brief, this court overruled the view stated in Shikles and other employment-discrimination cases that failure to exhaust is a jurisdictional defect. See Lincoln v. BNSF Ry. Co., 900 F.3d 1166, 1185 (10th Cir. 2018) ("[T]he full court now holds that a plaintiff's failure to file an EEOC charge regarding a discrete employment incident merely permits the employer to raise an affirmative defense of failure to exhaust but does not bar a federal court from assuming jurisdiction over a claim."). Because the SBA also asserted exhaustion as a basis for dismissal under Rule 12(b)(6), we "treat [its] argument . . . as having raised an affirmative defense of failure to exhaust," Payan v. United Parcel Serv., 905 F.3d 1162, 1169 (10th Cir. 2018) (brackets and internal quotation marks omitted).²

Although failure to exhaust is now an affirmative defense, it may be raised in a motion to dismiss when the grounds for the defense appear on the face of the complaint. See Jones v. Bock, 549 U.S. 199, 215 (2007). But "when a defendant's motion to dismiss raises an affirmative defense that is not apparent on the face of the pleadings and outside matter is presented and accepted, federal courts will generally treat the motion as if it were one for summary judgment." Weise v. Casper, 507 F.3d 1260, 1267 (10th Cir. 2007) (internal quotation marks omitted).³

Here, the district court considered matters beyond Ms. Cirocco's complaint in determining she had not exhausted her administrative remedies. The district court properly did so at the time under our pre-Lincoln case law without converting to summary judgment. See Stuart v. Colo. Interstate Gas Co., 271 F.3d 1221, 1225 (10th Cir. 2001) (observing that a district court generally "has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts" without converting a motion to dismiss into a motion for summary judgment (internal quotation marks omitted)).

While conversion to summary judgment would now be necessary given that exhaustion is no longer jurisdictional, see, e.g., Brooks v. Midwest Heart Grp., 655 F.3d 796, 798 (8th Cir. 2011), we need not remand for summary judgment proceedings. Ms. Cirocco was aware of the SBA's exhaustion arguments and supporting evidence,and, after a telephonic conference with the district court, she submitted argument and evidence in opposition to dismissal. Thus, Ms. Cirocco's response would have been no different had the district court predicted the outcome in Lincoln and converted the SBA's motion to dismiss into a motion for summary judgment.

We thus proceed to consider the SBA's exhaustion defense under the standards of summary judgment, affirming the district court's ruling if "there is no genuine dispute as to any material fact and [the SBA] is entitled to judgment as a matter of law," Fed. R. Civ. P. 56(a). See Lamb v. Rizzo, 391 F.3d 1133, 1137 n.3 (10th Cir. 2004) (employing summary-judgment standard where district court had tacitly converted defendant's motion to dismiss into motion for summary judgment and plaintiff had "not only failed to object to the exhibits attached to [the defendant's] motion to dismiss, but . . . also filed his own exhibits in response"); see also 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1366, 178 (3d ed. 2004) (observing that "the appellate...