Olawole v. Actionet, Inc.

• Decision Date: 20 June 2017
• Docket Number: Case No. 1:17-cv-408.
• Citation: 258 F.Supp.3d 694
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Charles OLAWOLE et al., Plaintiffs, v. ACTIONET, INC., Defendant.

258 F.Supp.3d 694

Charles OLAWOLE et al., Plaintiffs,

v.ACTIONET, INC., Defendant.

Case No. 1:17-cv-408.

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

Signed June 20, 2017

Charles Olawole, Bowie, MD, pro se.

Graffiti Consulting, Inc., pro se.

Daniel E. Kenney, DK Associates, LLC, Chevy Chase, MD, for Plaintiffs.

Linda Marie Jackson, Olaoluwaposi Oluwafiropo Oshinowo, Tony William Torain, Jr., Littler Mendelson, PC, Washington, DC, for Defendant.

MEMORANDUM OPINION

T. S. Ellis, III, United States District Judge

At issue in this removed and transferred breach-of-contract and employment discrimination case is defendant's motion to dismiss the Amended Complaint ("AC") pursuant to Rule 12(b)(6), Fed. R. Civ. P. The AC alleges three Counts: (1) Breach of contract (on behalf of one plaintiff), (2) National origin discrimination, in violation of Montgomery Cnty. Code § 27–19(a)(1)(on behalf of both plaintiffs) and (3) Race discrimination, in violation of 42 U.S.C. § 1981 (on behalf of both plaintiffs). For the reasons that follow, the motion to dismiss must be granted in part and denied in part.

I.¹

Plaintiffs are (1) Charles Olawole ("Olawole"), a Maryland resident and network engineer of Nigerian national origin, and (2) his closely-held family corporation, Graffiti Consulting, Inc. ("Graffiti Consulting"), an IT² consulting company incorporated and headquartered in Maryland. Defendant is ActioNet, Inc. ("ActioNet"), an IT security and software development company that previously employed Olawole. Although both plaintiffs were formerly represented by counsel, they are currently proceeding pro se because their counsel withdrew on the ground that he is not licensed to practice in Virginia or in this district.

The AC alleges that on January 6, 2014, ActioNet hired Olawole as an at-will employee and Senior Network Engineer to work in Silver Spring, Maryland on ActioNet's contract with the National Weather Service. AC ¶ 4–6. Olawole's offer letter fixed his salary at $127,500 per year. Id. ¶ 6. The AC further alleges that his supervisor, William Hall, frequently praised Olawole's work. Id. ¶ 7. Yet, the AC also alleges that despite this praise, and although Olawole speaks English fluently, Hall mocked Olawole's noticeable foreign accent. Id. ¶ 8.

In the Spring of 2014, ActioNet and Graffiti Consulting agreed on a new contract, the "Consultant Agreement," which gave Olawole a $40,000 raise and contemplated (1) that both companies would jointly employ Olawole and (2) that ActioNet could terminate Olawole's employment, without cause, provided that ActioNet gave Olawole 10 days' written notice. Id. ¶¶ 10, 12, 13. Importantly, the Consultant Agreement included a choice-of-law provision designating Virginia as the source of law governing the contract, and an exclusive forum-selection clause identifying state and federal courts in Virginia. See Consultant Agreement (Doc. 11–2) ¶¶ 18–19.³ The Consultant Agreement further provided that ActioNet could terminate its contract with Graffiti Consulting without notice, but only "for cause or for the convenience of the government[.]" AC ¶ 14. According to the AC, ActioNet dictated the terms and conditions of Olawole's employment and job duties, supervised Olawole, had authority to hire and fire him, provided the tools and equipment for Olawole's employment, and "maintained exclusivity of [his] employment." Id. ¶ 10.

According to the AC, on May 9, 2014—just one week after the parties signed the Consultant Agreement—ActioNet terminated the contract without just cause or prior notice. Id. ¶¶ 14, 21. The AC alleges that AcioNet instead provided a pretextual ground for termination, namely that Olawole had failed to "take ownership of projects and to work independently with minimal supervision." Id. ¶ 20 (quotation marks omitted). That same day, May 9, 2014, Olawole's supervisor, Mr. Hall, informed Olawole that Olawole had been fired, demanded Olawole's badge and laptop, and escorted him out of the building in view of several coworkers. Id. ¶ 15.

Thereafter, on May 5, 2015, Olawole filed a charge with the Montgomery County Office of Human Rights, alleging that ActioNet had discriminated against him on the basis of national origin, in violation of the Montgomery County Human Rights Act. See id. ¶ 16; see also Montgomery Cnty. Code § 27–19(a)(1) (prohibiting employers from discriminating "because of ... ancestry [or] national origin"). A little more than a year later, on June 23, 2016, the Montgomery County Office of Human Rights issued a letter notifying Olawole that the county agency had terminated administrative proceedings. AC ¶ 17. Four days later, on June 27, 2016, plaintiffs filed suit in Maryland state court. Subsequently, on March 24, 2017, plaintiffs were granted leave to file the AC.

The AC alleges the following Counts:

(1) Breach of contract (on behalf of Graffiti Consulting), for terminating the Consulting Agreement without cause and without providing 10–days' notice, id. ¶¶ 20–22;

(2) National origin discrimination, in violation of Montgomery Cnty. Code § 27–19(a)(1) (on behalf of both plaintiffs), id. ¶¶ 24–26; and

(3) Race discrimination, in violation of 42 U.S.C. § 1981 (on behalf of both plaintiffs), id. ¶¶ 28–30.

Graffiti Consulting is a plaintiff on all three Counts, while Olawole is a plaintiff only on Counts II and III. The AC seeks compensatory and punitive damages, back pay owing to Olawole, and Olawole's reinstatement to a previous or a substantially equivalent position.

ActioNet successfully removed the action from state court to the United States District Court for the District of Maryland. Thereafter, the District of Maryland granted a motion to transfer pursuant to 28 U.S.C. § 1404(a) and a forum selection clause. See Olawole v. ActioNet, Inc. , No. CV PX 16-3506, 2017 WL 1230821 (D. Md. Apr. 4, 2017). After the matter was transferred from the District of Maryland to the Eastern District of Virginia, counsel for plaintiffs withdrew, noting that he is licensed to practice only in Maryland, and that he is not admitted to practice in this district.⁴ In response, Olawole represented that he will proceed pro se.⁵ Thus, on June 5, 2017, an Order issued, warning Olawole that Graffiti Consulting's claims would be dismissed if the corporation did not obtain counsel by the June 16, 2017 hearing on the motion to dismiss. Despite that Order, Graffiti Consulting remains unrepresented.

Now, ActioNet has moved to dismiss with prejudice each Count, arguing:

(1) that Graffiti Consulting's claims must be dismissed because the corporation lacks counsel and permitted its corporate charter to lapse,(2) that both plaintiffs' claims for breach of contract (Count I) and national origin discrimination (Count II) are time-barred under Maryland law, and

(3) that the AC lacks sufficient factual allegations to state a § 1981 claim.

Each argument is separately addressed below.

II.

To survive a Rule 12(b)(6) motion, a complaint must contain "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). And although courts must "construe allegations in a pro se complaint liberally, a complaint must still contain enough facts to state a claim for relief that is plausible on its face." Thomas v. Salvation Army S. Territory , 841 F.3d 632, 637 (4th Cir. 2016) (quotation marks omitted). In this respect, the factual allegations must be more than mere speculation, and must amount to more than "a sheer possibility that a defendant has acted unlawfully." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. Neither a formulaic recitation of the elements of a cause of action nor unadorned conclusory allegations are sufficient to survive a Rule 12(b)(6) motion to dismiss. Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ; Iqbal , 556 U.S. at 678–79, 129 S.Ct. 1937. Instead, the complaint must allege facts sufficient to "nudge claims across the line from conceivable to plausible." Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc. , 591 F.3d 250, 255–56 (4th Cir. 2009) (quotation marks omitted).

III.

To begin with, all three of Graffiti Consulting's claims are nonstarters because (1) the company does not have counsel and (2) the company filed this action while it had a legally inoperative corporate charter.

First, to permit Graffiti Consulting to appear pro se in this action would violate the centuries-old rule "that a corporation may appear in the federal courts only through licensed counsel." Rowland v. Cal. Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194, 202, 113 S.Ct. 716, 121 L.Ed.2d 656 (1993). Indeed, a company's failure to comply with this rule despite fair warning constitutes grounds to dismiss that company's case. See, e.g. , Barr v. Prince George's Cnty., Md. , 115 Fed.Appx. 609, 610 (4th Cir. 2004) (dismissing a corporation's appeal for failure to obtain counsel despite the court's admonition). Nor is there any doubt plaintiffs received such a warning; on June 5, 2017, an Order issued, notifying plaintiffs that Graffiti Consulting "may not pursue any claims unless the corporation is represented by a duly licensed attorney," and that "failure to obtain counsel for Graffiti Consulting ... by the June 16, 2017 hearing in this matter will result in the dismissal of the corporation's claims." Olawole , No.1:17–cv–408 (E.D. Va. June 5, 2017) (Order). Because Olawole and Graffiti Consulting received fair and adequate warning, and because Graffiti Consulting is still unrepresented, the company's claims must be dismissed on this ground without prejudice.

Second, because Graffiti Consulting filed this action while its corporate charter was invalid,⁶ its claims in the complaint and AC are null and void under Maryland law.⁷ Indeed, without a valid charter, a corporation loses standing to sue. Cf. Md. Code, Corps. & Ass'ns § 2–103(b) (...