Tappe v. Alliance Capital Management, L.P.

• Decision Date: 19 December 2001
• Docket Number: No. 01 Civ.2068(SAS).,01 Civ.2068(SAS).
• Citation: 198 F.Supp.2d 368
• Parties: Wayne TAPPE, Plaintiff, v. ALLIANCE CAPITAL MANAGEMENT L.P., Defendant.
• Court: U.S. District Court — Southern District of New York

Page 368

198 F.Supp.2d 368

Wayne TAPPE, Plaintiff, v. ALLIANCE CAPITAL MANAGEMENT L.P., Defendant.

No. 01 Civ.2068(SAS).

United States District Court, S.D. New York.

December 19, 2001.

COPYRIGHT MATERIAL OMITTED

Jeffrey L. Liddle, Liddle & Robinson, L.L.P., New York City, for Plaintiff.

Frances Mary Maloney, Gerald Spada, Epstein Becker & Green, P.C., New York City, for Defendant.

OPINION AND ORDER

SCHEINDLIN, District Judge.

On October 25, 2001, this Court dismissed seven claims of race, sex and age discrimination brought against Alliance Capital Management L.P. by Wayne Tappe on the ground that Tappe had failed "to plead his discrimination claims with sufficient particularity to state a claim." Tappe v. Alliance Capital Mgmt. L.P., 177 F.Supp.2d 176, 178-79 (S.D.N.Y.2001). Three weeks later, Tappe filed an amended complaint with the Court's permission. See 11/19/01 First Amended Complaint ("Am.Compl.").

The Amended Complaint has ten causes of action: Six claims allege that Alliance discriminated against Tappe because of his race and sex in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e, New York State Human Rights Law, N.Y. Exec. Law § 296(1), and New York City Human Rights Law, N.Y.C. Admin. Code § 8-107, subd. 1(a). See Am. Compl. ¶¶ 42-70. One claim alleges that Alliance discriminated against Tappe because of his age in violation of the New York City Human Rights Law. See id. ¶¶ 71-74. Two claims allege state law violations—one claim for breach of implied-in-fact contract and one claim for quantum meruit. See id. ¶¶ 75-87. Finally, one claim alleges that Alliance violated the Employment Retirement Income Securities Act of 1974, 29 U.S.C. §§ 1001-1461. See id. ¶¶ 88-91.

Alliance now moves to dismiss the discrimination claims under Federal Rule of Civil Procedure 12(b)(6). See Memorandum of Law in Support of Defendant's Motion to Dismiss ("Def.Mem.") at 4-8. For the reasons below, Alliance's motion is denied.

I. LEGAL STANDARD

When deciding a motion to dismiss pursuant to Rule 12(b)(6), courts must "take as true all of the allegations contained in plaintiff's complaint and draw all inferences in favor of plaintiff." Weinstein v. Albright, 261 F.3d 127, 131 (2d Cir.2001). A motion to dismiss should be granted only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Tarshis v. Riese Org., 211 F.3d 30, 35 (2d Cir.2000) (quotation marks and citation omitted). Courts should "include in this analysis not only the assertions made within the four corners of the complaint itself, but also those contained in documents attached to the pleadings or in documents incorporated by reference." Gregory v. Daly, 243 F.3d 687, 691 (2d Cir.2001). Finally, courts must remain "mindful of the care exercised in this Circuit to avoid hastily dismissing complaints of civil rights violations." Id.

II. FACTUAL BACKGROUND

Wayne Tappe's Amended Complaint contains the following relevant allegations, which must be read "in the light most favorable to plaintiff." Gregory, 243 F.3d at 691 (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

In 1987, Tappe began working for Alliance Capital Management L.P., an investment research and management organization. See Am. Compl. ¶ 10. Throughout his employment, Alliance paid Tappe a base salary and an annual cash bonus, which constituted a substantial portion of Tappe's annual compensation package. See id. ¶¶ 11, 77. For example, in 1997, Tappe earned a salary of $125,000 and a bonus of $650,000. See id. ¶ 11. Similarly, in 1998, Alliance paid Tappe a $125,000 salary and a $700,000 bonus. See id.

Alliance increased Tappe's salary to $150,000 in 1999, but he received no bonus that year. See id. ¶¶ 11, 79. Rather, on the day that other employees received their end-of-the-year bonuses, Tappe was fired. Tappe received his notice when the head of Alliance's Fixed Income Division, Wayne Lyski, "told Tappe that it was `time for him to leave the firm' and that Alliance was terminating his employment." Id. ¶ 27. Besides not receiving a bonus for 1999, Tappe also lost several million dollars in unvested benefits including stock options. See id. ¶ 40.¹ Tappe also received no severance pay despite Alliance's long-standing policy to grant it. See id. ¶ 89-90.

At the time, Tappe was a 38-year old white male working in Alliance's High Yield Group with four other portfolio managers: Sheryl Rothman and Vita Pike (two white women in their early 40s), Nelson Jantzen (a 55-year old white male), and Vicki Fuller (a black woman of unspecified age). See id. ¶ 12-15. Tappe was the only person who lost his job even though his work performance was superior to everyone in the group. See id. ¶¶ 46, 61, 72; see also Plaintiff's Memorandum of Law in Opposition ("Pl.Mem.") at 5.

Indeed, not only had Tappe co-founded the High Yield Group (with Nelson Jantzen), but he managed the group's largest pool of assets. See Am. Compl. ¶¶ 22, 40. For example, Tappe's high-yield mutual funds totaled around $4 billion in assets, while Jantzen's funds only totaled $2.5 billion. See id. ¶ 18. Tappe also traveled more than the other managers—almost twice a month. See id. ¶ 24. The hard work apparently paid off because from 1995 until the day he was fired (December 8, 1999), Tappe raised $3-5 billion in assets for the High Yield Group, an amount that was significantly more than that raised by any other manager in his group. See id. ¶ 23.

The funds managed by Tappe also outperformed the other managers' funds. For example, Tappe managed the Alliance High Yield Fund that contained around $700 million in assets. See id. ¶ 20. A year after its creation in April 1997, the fund was rated number one by Lipper & Company ("Lipper"), an investment banking firm that ranks over 500 high-yield funds. See id. Likewise, the $600 million Hudson River High Yield Fund that Tappe managed had received a number-one Lipper rating in 1996 and 1997.² See id. ¶ 21.

Prior to being fired, Tappe had heard from several co-workers that Alliance was planning on firing either him or Fuller, an African-American woman. See id. ¶ 26. When told that he was being terminated, Tappe asked Lyski for an explanation. "Lyski said that Tappe did not fit with the profile of the High Yield Group and its strategy going forward." Id. ¶ 28. Tappe responded that he was surprised that Alliance had fired him rather than Jantzen, Fuller or Pike. See id. ¶ 29. Jantzen had already informed Alliance that he wanted to leave the firm with an early retirement package, while Fuller and Pike had been given limited responsibilities in 1999. See id. ¶¶ 30-31. "Moreover, Fuller managed various collateralized bond obligations (`CBOs') that performed dismally in 1998 and 1999." Id. ¶ 31. Lyski's only response was "no comment."

Shortly after Tappe was fired, Alliance transferred Fuller from portfolio manager to a marketing position in the High Yield Group, a position that she currently holds. See id. ¶ 31. In December 2000, Alliance also allowed Jantzen to retire and vest his benefits rather than terminate his employment. See id. ¶ 41. In the summer of 2001, Alliance fired Pike but allowed her to vest some of her stock options upon termination. See id. ¶ 42. Based on these allegations, Tappe believes that:

Alliance selected Tappe for termination over the other portfolio managers in the High Yield Group because it feared that it would subject itself to a claim of discrimination if it terminated any of the other portfolio managers, given that Tappe is a white male under 40 years of age....

Am. Comp. ¶ 34.

III. THE DIFFERENCE BETWEEN SINGLE-MOTIVE AND MIXED-MOTIVE THEORIES OF DISCRIMINATION

In language similar to the state and local laws under which Tappe has sued, Title VII makes it unlawful for an employer "to discharge any individual ... because of such individual's race, color, religion, sex, or national origin." 42 U.S.C. § 2000e-2(a). Because courts in this Circuit analyze discrimination claims brought under Title VII, the New York Human Rights Law, and the New York City Human Rights Law in the same manner, this Court's consideration of Tappe's federal discrimination claims applies with equal force to his state and local actions. See Cruz v. Coach Stores, Inc., 202 F.3d 560, 565 n. 1 (2d Cir.2000).

The Supreme Court has established two methods by which plaintiffs may prove their claims of intentional discrimination. First, plaintiffs may present a single-motive (or pretext) case by using the three-stage burden-shifting framework set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). In these cases, a plaintiff makes a prima facie case of discrimination by showing:

(1) he is within a protected group,

(2) he is qualified for the position,

(3) he was subject to an adverse employment action,

(4) and the adverse action occurred under circumstances giving rise to an inference of discrimination based on membership in the protected group

See Farias v. Instructional Sys., Inc., 259 F.3d 91, 98 (2d Cir.2001). "If a plaintiff establishes a prima facie case, a presumption of discrimination is created and the burden of production shifts to the defendant to articulate some legitimate, nondiscriminatory reason for the adverse employment action or termination." Id. If the defendant meets this burden of production, "the presumption drops out of the analysis," id., and the plaintiff must meet his ultimate burden of proving that he was the victim of intentional discrimination. See id.; see also Holtz v. Rockefeller & Co., 258 F.3d 62, 77 (2d Cir.2001).

Plaintiffs may also proceed under a mixed-motive theory, which the Supreme Court established in Price Waterhouse v. Hopkins, 490 U.S. 228, 241-42, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989). Under this approach, the plaintiff must first produce direct (as...