EEOC v. New Cherokee Corp.

• Decision Date: 28 July 1993
• Docket Number: No. 92 Civ. 8800 (CBM).,92 Civ. 8800 (CBM).
• Citation: 829 F. Supp. 73
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff v. The NEW CHEROKEE CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of New York

829 F. Supp. 73

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff v. The NEW CHEROKEE CORPORATION, Defendant.

No. 92 Civ. 8800 (CBM).

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

July 28, 1993.

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James L. Lee, Anna M. Stathis, New York City, Sonya LeCount, of counsel, for E.E.O.C.

Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, New York City, Ellen R. Nadler, Kevin B. Leblang, of counsel, for New Cherokee Corp.

OPINION ON MOTION TO DISMISS

MOTLEY, District Judge.

This lawsuit was filed by the Equal Employment Opportunity Commission ("EEOC") under the Age Discrimination in Employment Act ("ADEA") to correct defendant's allegedly illegal employment practices. The EEOC in its complaint alleges that defendant New Cherokee Corporation ("New Cherokee") discriminated against former employees Todd Ryan-Millington ("Millington"), Monica Davis ("Davis") and Selma Deszcz ("Deszcz") on the basis of their age in terminating their employment. (Complaint, ¶ 8-9).

An age discrimination charge was originally filed by Millington, but during the investigation of her complaint the EEOC uncovered information that led it to conclude that Davis and Deszcz had also been discriminated against on the basis of their age. Thus, in its determination that there was a sufficient basis to file the instant lawsuit, the EEOC concluded New Cherokee violated the ADEA in regard to its termination of Deszcz and Davis. (July 24, 1992 Determination, attached as Ex. G to Defendant's Motion to Dismiss or for Summary Judgment).¹

On its behalf defendant contends that Millington was terminated for non-discriminatory reasons, chief among them her alleged disloyalty to current management and her allegedly improper use of company documents. Defendant also contends that any filing of charges on behalf of Davis and Deszcz is improper.

Nature of the Motion

Defendant has moved for an order pursuant to F.R.Civ.P. 12(b)(1) dismissing the complaint or, in the alternative, for an order pursuant to F.R.Civ.P. 56(b) for a grant of summary judgment. Defendant maintains that the suit must be dismissed because (1) the EEOC allegedly failed to sufficiently investigate the charges because it did not adequately consider the employer's evidence, and (2) because the EEOC allegedly failed to fulfill its statutorily mandated duty to make sufficient efforts to conciliate the claims before filing this lawsuit.

New Cherokee argues that because of an alleged lack of disputed facts the complaint should be dismissed. Defendant has introduced, along with its motions, numerous exhibits falling outside the four corners of the pleadings. The EEOC has responded in kind.

Since both parties have introduced affidavits and exhibits outside of the pleadings in support of and in opposition to this motion, it is appropriate for the court to consider it as a motion for summary judgment. As noted by defendant, the court "must decide, in light of the supposedly undisputed facts surrounding the investigation and conciliation of the underlying discrimination claim: (1) whether it has jurisdiction to hear the EEOC claim, and (2) whether the EEOC has stated a claim upon which relief can be granted." (Reply Memorandum, 1). Defendant has invited the court to treat this motion as one for summary judgment. (Reply, 3 n. 2). Since this determination must be based on the existence or nonexistence of certain material facts, this motion shall be considered as one for summary judgment.²

Rule 12(b)(1) motions involve an assertion that subject matter jurisdiction is lacking. When a factual assault of this kind is made via affidavits and exhibits, the District Court should consider it under the summary judgment standard. See, e.g. Green v. Hill, 954 F.2d 694, 697-98 (11th Cir.1991), superseded in part on other grounds, 968 F.2d 1098 (1992). New Cherokee's motion is essentially a 12(b)(6) motion since it attacks the sufficiency of statements made in the complaint, specifically the assertion that the EEOC made appropriate attempts at conciliation, and thus should be considered one for summary judgment. Cortec Industries, Inc., v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir.), cert. den. ___ U.S. ___, 112 S.Ct. 1561, 118 L.Ed.2d 208 (1991); see also Wheeler v. Hurdman, 825 F.2d 257, 258-59 (10th Cir.), cert. den. 484 U.S. 986, 108 S.Ct. 503, 98 L.Ed.2d. 501 (1987) (where subject matter jurisdiction is intertwined with a substantive claim the motion should be converted into one for summary judgment). Whether or not the EEOC complied with certain requirements before filing suit is both a jurisdictional and a substantive question and thus the summary judgment standard is appropriately applied to the instant motion. S.E.C. v. Glen-Arden Commodities Inc., 368 F.Supp. 1386, 1387 n. 1 (E.D.N.Y.), aff'd 493 F.2d 1027 (2d Cir.1974).³

The instant motion by defendant to dismiss the lawsuit is based on defendant's contentions that plaintiff failed to adhere to the strict statutory outline in the ADEA, specifically, that the EEOC failed to investigate the employer's evidence as required to by 29 C.F.R. § 1626.4 (1992), and that plaintiff failed to attempt to conciliate the problem via informal methods as required to by Section 7(b) of the ADEA, 29 U.S.C. § 626(b).

Under the summary judgment standard, as is well known, the moving party must demonstrate that "there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265, 275 (1986). The burden to establish that no relevant facts are in dispute must be borne by movant, against whom all ambiguities are resolved, Donahue v. Windsor Locks Board of Fire Commissioners, 834 F.2d 54, 57 (2d Cir.1987). New Cherokee has failed to shoulder this burden.

Failure to investigate

Under the regulations governing the EEOC's procedures in processing Age Discrimination complaints, the "Commission shall ... receive information concerning alleged violations of the Act, including charges and complaints, from any source." 29 C.F.R. § 1626.4. New Cherokee contends, unpersuasively, that the EEOC is therefore somehow obligated to interview anyone provided by the employer; and that failure to do so, regardless of the weight and amount of the other information discovered during the investigation, somehow amounts to a default on the part of the EEOC.

Defendant has provided the court with no supporting decisions from any controlling jurisdiction. Instead, New Cherokee relies heavily on the case of E.E.O.C. v. Pet Inc., Funsten Nut Division, 719 F.2d 383 (11th Cir.1983). In Pet Inc. the Eleventh Circuit declined to grant an award of fees to defendant corporation where the EEOC's Title VII suit was voluntarily dismissed in part and involuntarily dismissed in part. In doing so the court noted that "the EEOC must learn that an objective evaluation of evidence is required before a suit of this nature can appear to be maintained in unquestioned good faith." 719 F.2d at 387. This is not a startling proposition, given that every litigant has a legal duty to insure that his or her lawsuit "is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversal or existing law." F.R.Civ.P. 11. However, this Rule has little to do with the suit at bar.

The question before this court is not whether a defendant is entitled to legal fees when it has been subjected to an unreasonable and legally and factually insupportable lawsuit, but whether the EEOC in this case made an adequate investigation into the facts before it filed its suit. The answer to that question is undeniably yes.

The regulation cited above requires the EEOC to "receive information," not to investigate every possible witness who may have some knowledge. The EEOC adhered to the regulatory command. It interviewed people, reviewed numerous documents, and received numerous position statements and answers to questions from New Cherokee. It offered to interview defendants' witnesses as defendant requested, even though it was under no obligation to do so. Movant has cited to no case where a court has dismissed an EEOC enforcement action because of an inadequate investigation.

The record is quite clear that the EEOC satisfied any duty it may have had to investigate the charges. On May 7, 1991, Millington filed charges with the EEOC alleging age discrimination on the part of the defendant. (Ryan-Millington Charge, Ex. A to EEOC's Memorandum in Opposition)⁴. A request for information directed at New Cherokee Chairman James Reynolds was sent by Gary Arbuckle, the EEOC investigator, May 9, 1991, with regard to Millington's charge, asking Reynolds, "to submit information and records relevant to the subject charge of discrimination." (Ex. C to Memorandum in Opposition).

On May 24, 1991, another former New Cherokee employee, Ray Franco, filed an age discrimination charge. (Ex. B. to Memorandum in Opposition). On May 28, 1991, New Cherokee was sent a notice of charge and request for information as to Mr. Franco. (Ex. E to Memorandum in Opposition).

New Cherokee responded with an eleven-page Position Statement with numerous attachments regarding Millington's termination dated July 26, 1991 (Ex. G to Memorandum in Opposition), and a further Position Statement dated August 5, 1991, in regard to Franco's charge containing ten pages and numerous attachments (Ex. H to Memorandum in Opposition).

A further request for information was transmitted by the EEOC on March 3, 1992 (Ex. I to Memorandum in Opposition). In this request, information was sought as to all employees who worked at New Cherokee from January, 1990 to the present, including, if relevant, their dates of termination and ages at termination. Attached to this request was a questionnaire divided into three sections. Under Section A, Question 2 read as follows: "For each employee whose employment...