Gianelli v. Schoenfeld, 2:21-cv-00477-JAM-KJN PS
| Decision Date | 06 October 2021 |
| Docket Number | 2:21-cv-00477-JAM-KJN PS |
| Parties | SHEILA GIANELLI, Plaintiff, v. RONALD STEVEN SCHOENFELD, et al., Defendants. |
| Court | U.S. District Court — Eastern District of California |
ORDER & FINDINGS AND RECOMMENDATIONS ON MOTIONS TO DISMISS (ECF NOS. 6, 19)
Before the court are two motions to dismiss brought by three of the five defendants named in this action: one by defendant Debra Lee Silver; and one by defendants Lance Schultz and Nick Dujmovich.[1] (ECF Nos. 6, 19.) Both motions were taken under submission without oral argument, pursuant to Local Rule 230(g). (ECF Nos. 21 at 2, 27 at 25.) Plaintiff filed oppositions to each motion, to which the moving defendants replied. (ECF Nos. 15, 22, 28, 29.) For the following reasons, the undersigned recommends: (1) granting defendant Silver's motion in full; (2) granting defendants Dujmovich and Schultz's motion in part; and (3) dismissing all claims against these defendants-in addition to all claims against similarly situated non-moving defendant Ronald Schoenfeld-with leave to amend as to some claims.
The complaint in this action relates to plaintiff's hiring and treatment at work over a period from 2013 to 2017 due to a criminal conspiracy that she discovered in the “Supply Chain/Materials” department of Pacific Gas and Electric Company (“PG&E”). (ECF No. 1.1 (“Complaint”) at 4-5, 8-13.)
In 2013, plaintiff was hired as an Analyst in PG&E's Supply Chain department. (Id. at 4, 8.) It was later revealed through a federal investigation-in which plaintiff assisted-that from approximately 2006 until 2015, another PG&E employee, non-moving defendant Ronald Schoenfeld, was conspiring to fraudulently funnel PG&E's annual trucking contracts to a company owned by his cousin, in return for over $1.4 million in kickback payments. (Id. at 6-7, 42-43.) Schoenfeld violated PG&E bidding policies by helping his alleged co-conspirator and cousin, Debra Silver-one of the moving defendants-to obtain contracts at inflated pay rates for her LLC, All American Logistics (“AAL”). (Id. at 4, 6-7, 42-43.) In exchange, Schoenfeld received 2.5% of the value of the contracts procured for AAL. (Id. at 6-7, 42.) In August 2020, as a result of the federal investigation, Schoenfeld was charged with and pled guilty to one count of conspiracy to commit honest services wire fraud, in violation of 18 U.S.C. § 371.[2] (United States v. Schoenfeld, No. 2:20-cr-0150-KJM (E.D. Cal.), ECF Nos. 1 at 2, 12 at 1-2.)[3] In January 2021, shortly before plaintiff filed this action, Schoenfeld was sentenced to 22 months in prison and ordered to pay PG&E some $1.4 million in restitution.[4] (Id., ECF Nos. 37, 38.)
Plaintiff discovered and reported Schoenfeld's conspiracy in August 2014 shortly after joining PG&E. (Complaint at 4.) Plaintiff asserts overall that she was hired into a lower-level role in 2013 due to efforts to conceal the conspiracy; and that in retaliation for exposing the conspiracy, she was denied pay increases, given onerous assignments, and relocated to a less desirable work site until she was able to secure a transfer to a different department in August 2017. (Id. at 4, 11-15.) She also alleges that general sex discrimination within the Supply Chain department contributed to these adverse employment actions. (Id. at 5, 8, 13, 18-21.)
In addition to defendants Schoenfeld and Silver, plaintiff also brings this action against PG&E, itself, [5] and two of her former upper-level managers in the Supply Chain department: (1) her third-level supervisor and the department's director, Lance Schultz; and (2) her second-level supervisor, Nick Dujmovich. (Id. at 6, 9.) Plaintiff-who holds a B.S. in Industrial Engineering and an M.B.A., and who has decades of experience in supply chain management- alleges that in 2013 she interviewed for two management-level positions in PG&E's Supply Chain department but was passed over in favor of less-qualified male applicants. (Id. at 8-9.) Defendants Schoenfeld and Dujmovich conducted her interview for the second managerial position, which they ultimately gave to a man; and Dujmovich ended up instead offering plaintiff a job as an Analyst, which she accepted in December 2013. (Id. at 8.) Plaintiff alleges that she was not hired for the managerial roles because of defendants' participation in the then-ongoing criminal conspiracy. (Id. at 13, ¶ 37(a).) At various points in the complaint, plaintiff alleges that Dujmovich and Schoenfeld were part of a group of PG&E employees known as the “Michigan Mafia, ” who had previously worked together at another company in Michigan before joining PG&E's Supply Chain department. (Id. at 7, 10-11, 14.) The complaint contains few specifics about the nature of this group or how it might be connected to Schoenfeld's kickback scheme.
From the start of her employment, Dujmovich-a “close personal friend” of Schoenfeld- told plaintiff not to look at anything associated with “Transportation and Schoenfeld.” (Id. at 4, 9-10.) In the summer of 2014, however, defendant Schultz directed plaintiff to examine the department's transportation budget which was causing concern because it was on pace to exceed projections by $2 million. (Id. at 9.) Within days, plaintiff found “evidence of unethical and irregular procurement.” (Id. at 9-10.) When she and another coworker approached Schoenfeld about it, he “admitted to authorizing the irregularities” and then asked plaintiff several times during the encounter whether “he and [she] were ok?, ” which plaintiff interpreted as a request that she look the other way. (Id. at 10.) Plaintiff and her immediate supervisor then brought her concerns to defendant Dujmovich, who was “covering for Schoenfeld” and never reported the issue higher up the chain. (Id.)
Accordingly, plaintiff took it upon herself to report Schoenfeld's activity to the PG&E Ethics and Compliance hotline. (Id.) The company launched an investigation with plaintiff's assistance, which resulted in Schoenfeld's termination from PG&E. (Id.) In late 2014 or early 2015, plaintiff also cooperated with the FBI's investigation into the conspiracy. (Id. at 23.) Plaintiff alleges that, despite Schoenfeld's ouster, the criminal conspiracy had “infiltrated the entire Supply Chain organization, ” causing her to be treated as a “pariah” for having exposed it. (Id. at 11.) Dujmovich retaliated against her by directing her to “rebuild the entire transportation sourcing process”-a task not appropriate for her current role-telling her that “she had ‘made the mess, so she had to clean it up.'” (Id.) When plaintiff reported this perceived retaliation to Schultz, he refused to help her and thereafter approved Dujmovich giving her “the lowest performance reviews, bonus payouts, and performance raises possible”-despite her having saved the company millions of dollars. (Id. at 12-14.) Schultz later reassigned plaintiff to a “warehouse position” far from the main offices, which was “a demotion in terms of visibility and opportunity for professional growth.” (Id. at 12, 14.)
With a great deal of effort, plaintiff transferred to a new role at PG&E outside of Schultz's control on August 7, 2017; and since leaving the Supply Chain department, her “career with PG&E has flourished.” (Id. at 13.)
A few days after Schoenfeld was sentenced in the criminal proceedings in this court, on January 29, 2021, plaintiff (representing herself) filed this civil case in San Joaquin County Superior Court. Gianelli v. Schoenfeld, et al., No. STK-CV-UMR-2021-0000849 (Cal. Sup. Ct., San Joaquin Cty.). The complaint contains eight causes of action: (1) Violation of California Labor Code § 1102.5; (2) Adverse Employment Action in Violation of Public Policy; (3) Sex Discrimination in Violation of the California Fair Employment and Housing Act (“FEHA”); (4) Unlawful Retaliation in Violation of the FEHA; (5) Violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(c); (6) Violation of RICO, 18 U.S.C. § 1962(d) (conspiracy); (7) Violation of the California Equal Pay Act and the Federal Equal Pay Act; and (8) Civil Conspiracy. (Complaint at 15-26.)
After some initial proceedings in state court, defendants removed the action to this court. (ECF Nos. 1 (Notice of Removal), 32 (Amended Notice of Removal).) Soon thereafter, defendant Silver filed her instant motion to dismiss, to which plaintiff responded by moving to remand the case back to state court. (ECF Nos. 6, 17.) The day after plaintiff moved to remand, defendants Dujmovich and Schultz jointly filed their instant motion to dismiss. (ECF No. 19.) The court paused the briefing of the motions to dismiss in order to first resolve plaintiff's motion to remand. (ECF No. 21.) On May 25, 2021, the undersigned recommended denying remand, and invited the remainder of the briefing on the motions to dismiss. (ECF No. 27.) On June 29, 2021, the district judge adopted the undersigned's recommendation, denying remand. (ECF No. 30.) On August 26, 2021, the court held a general status conference with the parties. (ECF No. 35.)
The motions to dismiss by defendants Dujmovich, Schultz, and Silver were fully briefed and taken under submission. (ECF Nos. 6, 7, 15, 19, 19.1, 22, 28, 29.) Defendant Silver moves to dismiss all claims against her for failure to state a claim under Rule 12(b)(6). (ECF No. 7 at 6.) In their joint motion, defendants Dujmovich and Schultz likewise move to dismiss under Rule 12(b)(6), but they also seek dismissal under Rule 12(b)(2) for lack of personal jurisdiction over defendant Dujmovich, who now resides in Texas. (ECF Nos. 19.1 at 1, 19.2.)
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