Graham v. Bd. of Educ. of Chi., 18 C 4761
| Decision Date | 16 January 2019 |
| Docket Number | No. 18 C 4761,18 C 4761 |
| Parties | TAMIKA GRAHAM, Plaintiff, v. BOARD OF EDUCATION OF THE CITY OF CHICAGO, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
Tamika Graham is a teacher for the Board of Education of the City of Chicago. Those, like Graham, who take additional college courses are eligible for higher salaries if they submit the required application and transcript to Human Resources. When Graham allegedly permitted her Union to submit a back-dated application to procure supplemental income and then asked the Union to file a grievance when the Board did not act on her application, the Board initiated an administrative proceeding to terminate Graham. The Board suspended Graham without pay and benefits shortly thereafter only to have a hearing officer reinstate her with backpay and benefits. Graham sued the Board in federal court alleging that the Board broke the law when it suspended her. Because Graham fails to sufficiently plead any of her claims, the Court grants the Board's motion to dismiss the complaint (Dkt. 16) without prejudice. Graham may amend her complaint, if she chooses to do so, on or before 2/13/19.
Tamika Graham is a tenured school teacher that the Board of Education can only terminate for cause. (Dkt. 1 ¶ 7.) She receives an annual salary with benefits for her work. Id. ¶ 8. The Board has a policy that enables teachers like Graham to earn a higher salary by taking college classes and earning credit for them. Id. ¶ 17. The Board required teachers who wanted to participate in the program to apply to its Human Resources Department with a transcript showing the credits. Id. Around June 2015, Graham obtained these credits and a month later applied for the additional salary. Id. ¶ 18. The Board did not acknowledge the application, nor did it increase her salary. Id. ¶ 19.
Graham's Union advised her to submit a duplicate application in September. Id. ¶ 20. Graham filled out another application but did not date it. Id. ¶ 21. Unbeknownst to Graham, her Union dated the second application June 29, 2015 and submitted it to the Board. Id. ¶ 22. Then, on June 9, 2017, the Board initiated an administrative proceeding to terminate Graham. Id. ¶ 23. The Board alleged that Graham asked the Union to file a grievance for her to get the Board to process her application for additional income even though Graham knew that she did not submit it on June 29, 2015. Id.
The Board suspended Graham without pay and benefits on June 19, 2017. Id. ¶ 25. With Graham on suspension, the Board sent her a collection letter in September demanding payment of insurance premiums to avoid coverage termination. Id. ¶ 28. Graham could not afford to pay the Board so she did not comply with its request. Id.¶ 29. She subsequently filed for bankruptcy because of her lack of income, which caused her severe emotional pain and suffering. Id. ¶ 30. In December, the Board sent Graham a second collection letter demanding payment for insurance premiums, but Graham did not pay because she believed the Board terminated her coverage after she did not pay the first time. Id. ¶ 31.
Graham requested a hearing, and on February 20, 2018, a hearing officer rejected the Board's charges, instead recommending they be withdrawn and that Graham be reinstated with full backpay and benefits. Id. ¶¶ 24, 26. On March 21, 2018, the Board published a warning resolution that accused Graham of "unsatisfactory conduct." Id. ¶ 27. Graham sued the Board in federal court in July. (Dkt. 1.)
A complaint must "'state a claim to relief that is plausible on its face.'" Sloan v. Am. Brain Tumor Ass'n, 901 F.3d 891, 894 (7th Cir. 2018) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In other words, a "'claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Boucher v. Fin. Sys. of Green Bay, Inc., 880 F.3d 362, 366 (7th Cir. 2018) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Conclusory statements do not suffice. See id. In construing the complaint, the Court accepts all the well-pleaded facts as true and "'draw[s] all reasonable inferences in favor of the plaintiff.'" United States ex rel. Berkowitz v. Automation Aids, Inc., 896 F.3d 834, 839 (7th Cir. 2018) (quoting Kubiak v. City of Chicago, 810 F.3d 476, 480-81 (7th Cir. 2016)).
Graham states six claims against the Board in her complaint. First, she alleges that the Board violated her rights under the Employee Retirement Income Security Act (ERISA) when it denied her benefits based on a state law that ERISA preempts. Second, Graham states that the Board breached ERISA and the First Amendment when it retaliated against her after she opposed her suspension without benefits in a hearing by continuing to withhold compensation and publishing a warning resolution. Third, Graham asserts that the Board contravened the Fair Debt Collection Practices Act (FDCPA) when it sent Graham letters indicating that it would terminate her health insurance when it did not intend to do so. Fourth and fifth, Graham argues that the Board is liable to her in tort for malicious prosecution and intentional infliction of emotional distress arising out of the dismissal hearing. Sixth and finally, Graham contends that the Board did not comply with the Illinois Wage Payment Collections Act (IWPCA) when it failed to pay her earned compensation during her suspension.
The Board argues that it manages a governmental benefits plan making it not subject to ERISA. On its own terms the statute does not cover a governmental plan, see 29 U.S.C. § 1132(a)(1)(B), which it defines as a "plan established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of the foregoing," 29 U.S.C. § 1002(32). As an initial matter, although the Seventh Circuit oncestated that the question of whether a purported ERISA plan is a governmental plan implicates a district court's subject matter jurisdiction, see Shannon v. Shannon, 965 F.2d 542, 546 (7th Cir. 1992), more recent developments in the Supreme Court's jurisprudence indicate that the proper procedural vehicle is the one the Board utilized here: a motion to dismiss for failure to state a claim under Rule 12(b)(6), see Smith v. Reg'l Transit Auth., 756 F.3d 340, 343-44, 46-47 (5th Cir. 2014).
Graham does not dispute the general proposition that ERISA exempts a governmental plan, which implies that she is not arguing that the Board is not a governmental agency or instrumentality. See Shannon, 965 F.2d at 546 n.7 (). Perhaps it goes without saying, but for the sake of taking the first analytical step, the Board is an agency or instrumentality of the City of Chicago, a political subdivision of the state of Illinois. See, e.g., Saunders v. Davis, No. 15-CV-2026 (RC), 2016 WL 4921418, at *9 (D.D.C. Sept. 15, 2016) () (collecting cases). Indeed, the Illinois Legislature statutorily created the Board as a "'body politic and corporate,'" making it a governmental unit itself. Rottman v. Illinois State Officers Electoral Bd., 2018 IL App (1st) 180234, ¶ 20 (internal citation omitted); see Albert v. Bd. of Educ. of City of Chicago, 2014 IL App (1st) 123544, ¶ 52 ().
The question becomes, then, whether the Plan is in fact a governmental plan. Graham argues that more than a de minimis number of non-governmental employees participate in the plan, namely charter schools' employees, which takes it out of the exemption. But on the face of the statute, "'a plan need only be established or maintained by a governmental entity in order to constitute a governmental plan.'" Graham v. Hartford Life & Acc. Ins. Co., 589 F.3d 1345, 1353 (10th Cir. 2009) (citation omitted) (emphasis in original). Graham does not claim that the Board does not establish or maintain the plan.
As stated previously, "the Board [. . .] administers CPS." See, e.g., McDaniel v. Bd. of Educ. of City of Chicago, 956 F. Supp. 2d 887, 895 (N.D. Ill. 2013). Furthermore, "exclusive governmental funding is enough to constitute governmental establishment of a plan." Gualandi v. Adams, 385 F.3d 236, 243-44 (2d Cir. 2004). Graham effectively concedes that the Board paid the insurance premiums under the health care plan because she complains about it sending her letters regarding those matters. See Fromm v. Principal Health Care of Iowa, Inc., 244 F.3d 652, 653-54 (8th Cir. 2001). These considerations weigh in favor of concluding that the Board establishes or maintains the plan.
Even taking Graham's allegations of more than de minimis participation by charter schools employees to be true (as the Court must), that still does not count the plan as non-governmental because she does not claim that private employers establish or maintain the plan. Several dated and non-binding district court cases conduct Graham's de minimis inquiry (potentially borne out of Department of Laborguidance) but they do not all agree on outcomes. See, e.g., Hall v. Maine Mun. Employees Health Tr., 93 F. Supp. 2d 73, 80-81 (D. Me. 2000) (). More importantly, that calculus is simply unfaithful to ERISA's text and the principles of federalism that underlie the statute. As a final matter, if Graham thinks she can replead and chooses to do so, it is...
To continue reading
Request your trial