Robinette v. WESTCONSIN CREDIT UNION
| Decision Date | 25 February 2010 |
| Docket Number | No. 09-cv-600-vis.,09-cv-600-vis. |
| Citation | 686 F. Supp.2d 1206 |
| Parties | Tammy L. ROBINETTE, Plaintiff, v. WESTCONSIN CREDIT UNION, Defendant. |
| Court | U.S. District Court — Western District of Wisconsin |
Carol S. Dittmar, Carol Dittmar Law Office, LLC, Chippewa Falls, WI, for Plaintiff.
Elizabeth McDuffie, Gonzalez Saggio & Harlan LLP, Milwaukee, WI, for Defendant.
This is a civil action brought originally in the Circuit Court for St. Croix County and removed to this court by defendant, WESTconsin Credit Union. Plaintiff contends that defendant discriminated against her in violation of both 11 U.S.C. § 525 of the bankruptcy code and Wisconsin laws prohibiting wrongful discharge by terminating her when it learned that she and her husband planned to file a bankruptcy petition.
Jurisdiction is present under 28 U.S.C. §§ 1334 and 1367. The case is before the court on defendant's motion to dismiss under Fed.R.Civ.P. 12(b)(6).
Plaintiff's claims raise interesting and rarely litigated issues on which there is little published law. The applicable bankruptcy statute, 11 U.S.C. § 525, protects persons who have filed for bankruptcy from being terminated by their employer or otherwise discriminated against in respect to their employment. Defendant contends that plaintiff has no federal claim because § 525(b) applies only to someone whose employment is terminated after the individual has filed for bankruptcy. It contends also that plaintiff has no state law claim for wrongful discharge because she (1) has not identified a fundamental public policy at stake; (2) she cannot establish that she was terminated because she refused to violate a statutory provision; and (3) she has a federal remedy available to her. In addition, defendant asks the court to strike plaintiff's requests for punitive damages and attorney fees under Fed.R.Civ.P. 12(f).
I conclude that plaintiff has stated a plausible claim for relief under 11 U.S.C. § 525(b) because the statute can be fairly read as extending to employers who terminate or otherwise discriminate against an employee who intends to file a petition for bankruptcy and does so. However, I agree with defendant that plaintiff has no state law claim for wrongful termination so long as § 525(b) provides her a federal statutory remedy. This conclusion makes it unnecessary to decide whether to exercise supplemental jurisdiction over plaintiff's state law claim that would expand Wisconsin's public policy exception to the employment at-will doctrine. Accordingly, I will deny defendant's motion to dismiss the § 525(b) claim and grant defendant's motion to dismiss plaintiff's state law claim for wrongful termination.
As to plaintiff's claim for punitive damages and attorney fees under § 525(b), plaintiff has failed to argue that the law would allow her to seek such relief under § 525(b) and there is no obvious support for that position. Accordingly, I will grant defendant's request to strike those requests for relief.
From the complaint, I find that plaintiff has fairly alleged the following facts.
Plaintiff Tammy Robinette is a resident of New Richmond, Wisconsin. Defendant WESTconsin Credit Union is a federally insured Wisconsin credit union located in Menomonie, Wisconsin.
Defendant employed plaintiff from August 18, 2004 to June 16, 2009. On June 15, 2009, plaintiff's supervisor questioned her about judgments that had been posted in the local newspaper listing plaintiff's husband as the debtor. Plaintiff told her supervisor that she and her husband had retained an attorney and were going to file a bankruptcy petition. Plaintiff and her husband had a loan from defendant and planned to include that debt in their bankruptcy petition.
The next day, June 16, plaintiff's supervisor told plaintiff that she was terminated because she was "filing for bankruptcy," which would not "make WESTconsin look good." Plaintiff was an exemplary employee. She and her husband filed a bankruptcy petition on June 25, 2009.
OPINIONIn relevant part, 11 U.S.C. § 525(b) provides:
A "debtor" is a "person or municipality concerning which a case under this title has been commenced." 11 U.S.C. § 101(13).
At first reading, the statute seems to limit the protections it provides to persons who have filed a proceeding in bankruptcy or did so in the past, leaving plaintiff without a federal remedy. Whether this impression is accurate is a question no court in this circuit has had occasion to address.
Defendant cites the only federal appellate decision on the question, In re Majewski, 310 F.3d 653 (9th Cir.2002), in which the court read the plain language of the statute as covering only an individual "who is or has been a debtor" under the Act, concluding that § 525 does not provide a claim to an employee who is terminated before filing a bankruptcy petition. Defendant cites the other two cases in which courts have read the language in the same way: In re Davis, 2009 WL 2242326 (Bankr.M.D.Ala.2009) (adopting reasoning of Majewski), and In re Kanouse, 168 B.R. 441 (S.D.Fla.1994) ().
Plaintiff relies on the dissenting opinion in Majewski, in which Judge Reinhardt disagreed with the majority about its characterization of the language of § 525(b) as "plain." He argued that a narrow interpretation of § 525(b) undercut Congress's efforts to "insulate debtors from unfair employment practices directly tied to their attempts to get a `fresh start.'" Plaintiff also cites In re Tinker, 99 B.R. 957, 960 (Bankr.W.D.Mo.1989) (), and In re Mayo, 322 B.R. 712, 717 (Bankr.D.Vt.2005) ().
Sparse as the precedent in this area is, the majority and dissenting opinions in Majewski, 310 F.3d 653, provide a comprehensive review of the arguments on both sides of the issue. In concluding that § 525(b) should not be read to apply to pre-filing discrimination, the majority read the language as plain and unambiguous, requiring the court to enforce it according to its terms. Id. at 656 (). The majority found no merit to the dissent's argument that courts should give § 525(b) the same liberal reading they give other statutes banning discriminatory retaliation. It conceded the uniformly broad treatment of the anti-retaliation provisions of Title VII of the Civil Rights Act, the Fair Labor Standards Act and other statutes such as the Federal Mine Health and Safety Act, the Federal Railroad Safety Act and the Clean Water Act, but it found these provisions distinguishable from the one in § 525(b). Those in the listed statutes facilitate the enforcement of the statutes by bringing to light improprieties in the workplace, so it makes sense to encourage reports of illegal behavior, whereas, Id. at 655. The court added that Id. at 656.
The majority chastised the dissent for relying on legislative history to support a liberal reading of the statute, pointing out that the history it cited was included with a 1983 bankruptcy bill that was never enacted. (Section 525(b) was added in 1984 legislation.) Thus, the majority said, it was irrelevant whether Congress had said in connection with that bill that the amendment of § 525 was intended to extend the protections to persons employed in the private sector "on the basis that that person has been or will be a debtor in bankruptcy." Omnibus Bankruptcy Improvements Act of 1983, S. 445, 98th Cong. § 352 (1983) (emphasis added).
As the majority noted, Judge Reinhardt relied in his dissent upon the liberal readings given to anti-retaliation provisions in other statutes, on the legislative history accompanying the proposed amendment of § 525 in the 1983 proposed act and on his view that the statute was not plain and unambiguous. On this last point, he explained why he thought the language was susceptible to a variety of readings.
It is possible to read the statute as the majority does, and find that discrimination based solely on an intent to file for bankruptcy remains entirely outside of the statutory purview as long as the discrimination occurs before the moment of filing. However, it can also be read to state that discrimination based on an intent to file for bankruptcy is comprehended by the statute, but becomes unlawful only if the victim of discrimination actually files a formal petition. Cf. Passantino v. Johnson & Johnson Consumer Products, Inc., 212 F.3d 493, 506 (9th Cir.2000) (...
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