Nicol v. Imagematrix, Inc.

• Decision Date: 03 July 1991
• Docket Number: Civ. A. No. 91-0396-A.
• Citation: 767 F. Supp. 744
• Court: U.S. District Court — Eastern District of Virginia
• Parties: J. Scott NICOL and Jody Nicol, Plaintiffs, v. IMAGEMATRIX, INC., Imagematrix West, Inc., Randall T. Welsh, Scott G. Adams, Michael Eggleston, Ronald Hobbs, Defendants.

767 F. Supp. 744

J. Scott NICOL and Jody Nicol, Plaintiffs, v. IMAGEMATRIX, INC., Imagematrix West, Inc., Randall T. Welsh, Scott G. Adams, Michael Eggleston, Ronald Hobbs, Defendants.

Civ. A. No. 91-0396-A.

United States District Court, E.D. Virginia, Alexandria Division.

July 3, 1991.

Robert M. Adler, M. Joseph Sterner, Kevin M. Gross, Theresa W. Hajost, Drinker Biddle & Reath, Washington, D.C., for plaintiffs.

James H. Falk, Sr., James H. Falk, Jr., Scott A. Mills, McGovern, Noel & Falk, Washington, D.C., for defendants.

MEMORANDUM OPINION

ELLIS, District Judge.

Background

This is a case of the proverbial tail wagging the dog, or more particularly, of the pendent claims tail wagging the federal claim dog. This situation is, at the least, undesirable, for the limited jurisdiction of the federal courts should not be squandered. Nor should federal courts, beguiled by claims of litigating economy, intrude unnecessarily into the realm of state law adjudication. The appropriate remedy here, invited by settled precedent, is to lop off the state claims tail, leave these claims to their fate in the state courts, and proceed expeditiously to dispose of the federal claim.

Less metaphorically, this is an action under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., with numerous pendent state claims. The Title VII claim set forth in count one of the First Amended Complaint is against Imagematrix and the individual defendants based on allegations of sex discrimination (pregnancy), sexual harassment, and creation of a sexually hostile work environment. Counts two through eight allege state causes of action. Specifically, count two alleges wrongful discharge against Imagematrix and the individual defendants; count three alleges intentional infliction of emotional distress against Imagematrix and the individual defendants; count four alleges breach of contract against Imagematrix and the individual defendants; count five alleges breach of contract against Imagematrix West; count six alleges intentional interference with economic opportunity against Imagematrix and Eggleston; count seven alleges negligent retention against Imagematrix, Hobbs, Adams, and Welsh; and count eight alleges fraud against Imagematrix, Eggleston, Hobbs, and Welsh.

The pertinent factual picture is easily sketched. Plaintiffs, husband and wife, relocated to the Washington, D.C. area from New York City in 1988 after the wife, Jody Nicol, entered into an employment agreement with defendant Imagematrix, a business graphics firm in Falls Church, Virginia. Imagematrix subsequently employed the husband, Scott Nicol, as well. Both Nicols became vice presidents. Defendant Eggleston was President and CEO of the company, and the other individual defendants served as directors. Defendant Imagematrix West, formerly Gestalt Productions, was a separate graphics business purchased by Imagematrix in March 1989.

The complaint paints a picture of plaintiffs as effective high-level employees. It depicts Eggleston as a womanizer who repeatedly harassed female employees in various ways and particularly disdained pregnant women. The remaining individual defendants allegedly either acquiesced in or contributed to the harassment.

The complaint further reflects that Jody Nicol informed Eggleston of her pregnancy on October 2, 1989. Imagematrix discharged both plaintiffs on November 15, 1989. On March 5, 1990, plaintiffs filed charges with the Equal Employment Opportunity Commission (EEOC). Jody Nicol alleged that she was terminated because she had become pregnant, and Scott Nicol alleged that he was terminated because of his wife's pregnancy. The charges were referred to the Fairfax County Human Rights Commission ("FCHRC") for investigation.¹ Before this investigation was completed, plaintiffs requested and received "right to sue" letters from the EEOC and brought this action.

The matter is now before the Court on (i) defendants' Motion to Dismiss counts two through eight of the First Amended Complaint under Rules 12(b)(1) and 12(b)(6), Fed.R.Civ.P., (ii) defendants' Motion for Summary Judgment, and (iii) defendants' Motion for Sanctions under Rule 11, Fed.R. Civ.P.² For the reasons stated below, the Court concludes that defendants' Motion to Dismiss must be granted. The Court also concludes that defendants' Motion for Summary Judgment must be granted with respect to count four and granted in part and denied in part with respect to count one. Defendants' Motion for Sanctions must also be denied.

Analysis

I. Motion to Dismiss

A. Pendent Jurisdiction Standard

Pendent jurisdiction analysis under United Mineworkers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) consists of a two-part determination. "First, the Court must determine whether it has jurisdiction, i.e., the power, to hear the claim; second, the Court must determine whether in its discretion it should hear pendent State claims which it in law has the power to hear." Mason v. Richmond Motor Co., Inc., 625 F.Supp. 883, 885 (E.D.Va.1986), aff'd, 825 F.2d 407 (4th Cir. 1987) (table affirmance); see also 3A Moore's Federal Practice ¶ 18.071.-3 (1985). The first inquiry as to power itself consists of two elements: (i) there must be a substantial federal claim, and (ii) the state and federal claims must derive from "a common nucleus of operative fact" such that a plaintiff "would ordinarily be expected to try them all in one judicial proceeding." Gibbs, 383 U.S. at 725, 86 S.Ct. at 1138.

In sum, then, pendent jurisdiction analysis is a three-step process:

(1) First, the existence of a substantial federal claim must be confirmed.

(2) Next, if a federal claim exists, the relationship between the federal and state claims must be examined to ascertain whether they arise from a common nucleus of operative fact. If the state and federal claims do not share a common nucleus of fact, then the state claims are not properly pendent and must be dismissed without prejudice. But if they do share a common nucleus of fact, then the state claims are properly pendent to the federal claim and may be adjudicated in federal court.

(3) The third and final step of the analysis involves determining whether the district court should exercise its discretion to hear and resolve the state claims or dismiss them without prejudice, leaving plaintiff the option to pursue these claims in state court.

In the case at bar, defendants concede the existence of a federal claim. Thus, the dispute here focuses first on whether certain claims are properly pendent and second on whether the Court should exercise its discretion to hear or dismiss those claims that are properly pendent.

B. No Jurisdiction Over Counts Four, Five, and Eight

Defendants argue persuasively that there is no jurisdiction to hear the state claims in counts five, eight, and portions of count four³ as they are not properly pendent; these claims and the Title VII claim do not share a common nucleus of operative facts. Count five alleges breach of contract against Imagematrix West for failure to pay Jody Nicol one percent of its gross monthly sales. Self-evidently, this cause of action is wholly unrelated to the allegations of sexual harassment, sexually hostile work environment, and sex discrimination that form the basis of the Title VII claim. Indeed, plaintiffs' memorandum in opposition to the motion to dismiss does not even list Imagematrix West as a defendant in count one. Count five is completely unrelated to Jody Nicol's discharge; the sole common fact between this claim and count one is the fact of Jody Nicol's employment by Imagematrix. Count eight is similarly unrelated to the Title VII claim. It alleges that defendants Eggleston, Welsh, and Hobbs made knowingly false representations to plaintiffs that they would receive a percentage of equity in Imagematrix as part of their compensation. Facts that might support this allegation are totally unrelated to any facts relating to sexual harassment, sex discrimination, or a sexually hostile work environment. Moreover, while the focus of the Title VII claim is plaintiffs' treatment and discharge, the focus of count eight, as pled, is the conduct that allegedly induced plaintiffs to accept Imagematrix's offer of employment. These claims share no common nucleus of facts. The same conclusion also applies to that portion of count four that alleges (i) breach of plaintiffs' employment contracts for defendants' failure to convey equity in Imagematrix, and (ii) defendants' failure to pay Jody Nicol her accrued vacation pay. These allegations share no facts with the Title VII claim, other than the mere fact of plaintiffs' employment.

Most federal courts require only a "loose factual connection between the claims" to satisfy the requirement that the claims arise from a common nucleus of operative fact. See 13B C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure § 3567.1, at 117 (1984). Counts four, five, and eight fail even this minimal standard. These counts are "totally different from the federal claim." Frye v. Pioneer Logging Machinery, Inc., 555 F.Supp. 730, 732 (D.S.C.1983); see also Federal Practice & Procedure § 3567.1, at 118-20 ("If, however, the ... claims are found to be totally independent, there is no power to hear the claim that has no jurisdictional basis on its own."). These state claims and the Title VII claim are "separately maintainable and determinable without any reference to the facts alleged ... with regard to the other count." Hales v. Winn-Dixie Stores, Inc., 500 F.2d 836, 848 (4th Cir.1974); cf. Benton v. Kroger Co., 635 F.Supp. 56, 59 (S.D.Tex. 1986) (plaintiff's state claim that she was fired in retaliation for claiming workers' compensation for a back injury was not pendent to her federal claim that she was fired because of sex discrimination where alleged incidents of sexual harassment were separate from circumstances surrounding back...