Rothmeier v. Investment Advisers, Inc.

• Citation: 85 F.3d 1328
• Decision Date: 07 June 1996
• Docket Number: No. 95-2562,95-2562
• Parties: Steven G. ROTHMEIER, Appellant, v. INVESTMENT ADVISERS, INC., a Minnesota corporation; Noel P. Rahn, an individual, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 1328

85 F.3d 1328

Steven G. ROTHMEIER, Appellant, v. INVESTMENT ADVISERS, INC., a Minnesota corporation; Noel P.

Rahn, an individual, Appellees.

No. 95-2562.

United States Court of Appeals,

Eighth Circuit.

Submitted Dec. 13, 1995.

Decided June 7, 1996.

Timothy Thornton, Minneapolis, MN, argued, Scott G. Bowman, Minneapolis, MN, briefed, for appellant.

Michael Berens, Minneapolis, MN, argued, Barbara P. Berens and George F. McGunnigle, Minneapolis, MN, briefed, for appellees.

Before BOWMAN and LOKEN, Circuit Judges, and SCHWARZER, ^* District Judge.

BOWMAN, Circuit Judge.

Steven G. Rothmeier brought this suit against his former employer, Investment Advisers, Inc. (IAI), alleging that he was fired on the basis of his age in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634 (1994), and the Minnesota Human Rights Act (MHRA), Minn.Stat. §§ 363.01-363.20 (1994). The District Court ¹ granted summary judgment in favor of IAI, ² and Rothmeier appeals. We affirm.

I.

Rothmeier began working for IAI in 1989 at the age of forty-three. Less than four years later, in March 1993, Rothmeier was fired at the age of forty-six. IAI is a complex business enterprise of funds, subsidiary corporations, and general and limited partnerships. As its name proclaims, IAI is an investment advisor and makes money by procuring investment funds, which are managed for a fee by the various IAI divisions. Noel P. Rahn, the chief executive officer of IAI, hired Rothmeier to serve as president of IAI Capital Group, a division of IAI. In this position, Rothmeier oversaw two subsidiaries, the already successful Venture Capital Group and IAI International, a fledgling investment banking group headed by David Spreng. Under the auspices of IAI International, IAI created Great Northern Capital Partners to engage in merchant banking. A banking fund, called the Great Northern Fund, was organized as a limited partnership to raise monies for this merchant banking effort. At the time of Rothmeier's hiring, Rahn, who was then age fifty, knew that Rothmeier was over forty.

In March 1993, Rothmeier was informed by Linda Watchmaker, chief financial officer of the Venture Capital Group, that Investment Advisors Venture Management, Inc. (IAVMI), a wholly owned subsidiary of IAI, perhaps was not in compliance with Securities and Exchange Commission (SEC) registration rules. Watchmaker's information suggested that the financial exposure resulting from the registration problem was in excess of $11 million. On the basis of this information, Rothmeier undertook an investigation to determine whether IAVMI was in compliance with SEC rules. By March 15, 1993, Rothmeier had concluded that IAVMI was in violation of SEC regulations and reported this information to Rahn. Rothmeier then asked Rahn if he could see certain corporate records in furtherance of his investigation. Rothmeier insists that Rahn and IAI's in-house lawyers stonewalled because they wanted to "cover-up" the SEC problem. Rothmeier never received the documents he requested because Rahn fired him on either March 15 or March 17, 1993. ³ Rothmeier was replaced by David Spreng, who was then thirty-one years old. While at IAI, Rothmeier never received an unfavorable performance review and, just two weeks before his discharge, IAI paid Rothmeier a $50,000 bonus.

The District Court granted summary judgment to IAI on the ADEA and MHRA claims because the record was "bereft of any suggestion that there was any age based animus involved in the decision of IAI and Rahn to terminate Rothmeier." Rothmeier v. Investment Advisers, Inc., No. 3-94-431, Memorandum Opinion and Order at 8 (D.Minn. May 18, 1995). The court acknowledged that while there were problems between Rahn and Rothmeier, "those problems concerned certain aspects of the business relationship rather than [Rothmeier's] age." Id. ⁴

We review the grant of summary judgment de novo, applying, as did the District Court, the summary judgment standards of Federal Rule of Civil Procedure 56(c). Michalski v. Bank of Am. Ariz., 66 F.3d 993, 995 (8th Cir.1995).

II.

We first address Rothmeier's ADEA claim. The ADEA makes it "unlawful for an employer ... to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age." 29 U.S.C. § 623(a)(1). Everyone age forty and older is within the class of persons whom the act seeks to protect. 29 U.S.C. § 631. The hallmark of an ADEA disparate-treatment claim is intentional discrimination against the plaintiff on account of the plaintiff's age. Hutson v. McDonnell Douglas Corp., 63 F.3d 771, 775 (8th Cir.1995). There are two methods by which a plaintiff can attempt to prove intentional discrimination. First, a plaintiff may satisfy his burden by presenting direct evidence of employment discrimination based on age. In employment-discrimination cases, however, "[t]here will seldom be 'eyewitness' testimony as to the employer's mental processes" because a shrewd employer will not leave a trail of direct inculpatory evidence for the plaintiff to bring into court. United States Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 716, 103 S.Ct. 1478, 1482, 75 L.Ed.2d 403 (1983). Recognizing that the "smoking-gun" case is rare, the Supreme Court has developed a second, indirect method of proof by which a plaintiff can satisfy his burden using circumstantial evidence. In disparate-treatment cases based on circumstantial evidence, courts apply the now-familiar analytical framework of burden shifting developed in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and later refined in Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), and St. Mary's Honor Center v. Hicks, 509 U.S. 502, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993). Rothmeier's case relies solely upon circumstantial evidence, and thus is governed by the McDonnell Douglas line of cases.

The McDonnell Douglas framework, using a three-stage burden-shifting analysis, establishes the order and allocation of proof in employment-discrimination cases. ⁵ At the first stage, the plaintiff bears the initial burden of establishing a prima facie case of discrimination. Burdine, 450 U.S. at 252-53, 101 S.Ct. at 1093-94. The prima facie case, in the absence of an explanation from the employer, "creates a presumption that the employer unlawfully discriminated against the employee." Id. at 254, 101 S.Ct. at 1094. ⁶ If the plaintiff establishes a prima facie case, the burden of production shifts at the second stage to the defendant, who must articulate some legitimate, nondiscriminatory reason for the adverse employment action. Id. at 253, 101 S.Ct. at 1093-94. If the defendant carries this burden of production, the presumption raised by the prima facie case is rebutted and "drops from the case." Id. at 255 n. 10, 101 S.Ct. at 1095 n. 10. The burden then shifts back at the third and final stage to the plaintiff, who is given the opportunity to show that the employer's proffered reason was merely a pretext for discrimination. Id. at 253, 101 S.Ct. at 1093-94. The plaintiff retains at all times the ultimate burden of persuading the trier of fact that the adverse employment action was motivated by intentional discrimination. Id.

For purposes of its summary judgment motion, IAI concedes the existence of a prima facie case of age discrimination. ⁷ IAI's Br. at 12 nn. 13 & 14. This concession created a presumption of age discrimination by IAI, requiring IAI to rebut it with nondiscriminatory reasons for Rothmeier's discharge. IAI proffered three nondiscriminatory reasons: the poor performance of IAI International; the failure of the Great Northern Fund to achieve its goals; and Rothmeier's purported insubordination and differences in management style between Rothmeier and Rahn. IAI having come forward with nondiscriminatory reasons for Rothmeier's discharge, the burden then shifted to Rothmeier to offer evidence showing that the reasons given by IAI were a pretext for discrimination. Rothmeier attempted to satisfy this burden by disputing each of IAI's proffered reasons. Where IAI asserted that IAI International lost millions of dollars, Rothmeier claimed that IAI International made over $1 million under his guidance and, in any event, David Spreng--the younger man who replaced him--headed that subsidiary. Where IAI claimed that the Great Northern Fund was failing, Rothmeier maintained that he had told an agreeable Rahn much earlier that it was unlikely the Fund would attain its goal and that, once again, David Spreng was in charge. Where IAI insisted that Rothmeier was insubordinate, Rothmeier argued that he possessed a heightened sense of business ethics and raised the SEC registration issue, not out of insubordination, but, rather, as an exercise of business ethics; he points out that he never received a negative performance review nor was he ever warned about any alleged insubordination or differences in management style.

Even though the District Court determined that Rothmeier had "plainly" created factual disputes with respect to whether IAI's proffered reasons were credible, it granted summary judgment to IAI because Rothmeier failed to present any evidence that tended to show that age was a determining factor in IAI's decision to fire him. Rothmeier v. Investment Advisers, Inc., No. 3-94-431, Memorandum Opinion and Order at 8 (concluding factual disputes shown in summary judgment record had "nothing to do with the critical issue before the court"--i.e., whether the termination was related to age).

Rothmeier argues that to survive IAI's motion for summary judgment, it is enough that he created factual disputes with respect to whether IAI's proffered reasons were pretextual; he insists that he did not have to take the additional...