U.S. Equal Emp't Opportunity Comm'n v. Alia Corp.

• Decision Date: 06 February 2012
• Docket Number: Case No. 1:11–cv–01549 LJO BAM.
• Citation: 25 A.D. Cases 1634,842 F.Supp.2d 1243
• Parties: U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. ALIA CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of California

842 F.Supp.2d 1243

25 A.D. Cases 1634

U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,

v.ALIA CORPORATION, Defendant.

Case No. 1:11–cv–01549 LJO BAM.

United States District Court, E.D. California.

Feb. 6, 2012.

Michael J. Farrell, Govt., Anna Y. Park, United States Equal Employment Opportunity Commission, Los Angeles, CA, Rumduol Vuong, Govt., U.S. Equal Employment Opportunity Commission, Fresno, CA, for Plaintiff.

Brendan M. Brownfield, Burnham Brown, Oakland, CA, for Defendant.

ORDER ON DEFENDANT'S MOTION TO DISMISS OR, IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT OR A MORE DEFINITE STATEMENT

LAWRENCE J. O'NEILL, District Judge.

In this case, the United States Equal Employment Opportunity Commission (“EEOC”) alleges that Defendant Alia Corporation (“Alia”) subjected Derrick Morgan (“Morgan”), a former employee, to adverse employment actions because of his mental impairments. Now pending before the Court is Alia's motion to dismiss or, in the alternative, for summary judgment or a more definite statement. Alia argues that this action should be dismissed because the EEOC failed to conciliate in good faith prior to filing suit. The EEOC has opposed the motion, and Alia has filed a reply. Upon careful consideration of the parties' submissions and the entire record, the Court issues the following order.

I. BACKGROUND¹

Alia manages several McDonald's restaurants in California's Central Valley, including the Oakhurst, California location at which Morgan was employed until mid–2009. On October 20, 2009, Morgan lodged a Charge of Discrimination against Alia with the EEOC. Morgan alleged that he was “demoted, constructively discharged, and subjected to different terms and conditions of employment because of [his] disability” in violation of the Americans with Disabilities Act of 1990 (“ADA”). (Doc. 19, Pl.'s Opp'n, Ex. A.)

On October 23, 2009, the EEOC initiated its investigation into the matter and notified Alia of Morgan's claim. Alia responded that it was never aware that Morgan had a disability of any kind and denied discriminating against Morgan on that basis. Alia explained that it had purchased the Oakhurst location in January 2009, and after two months it became apparent that Morgan's job performance was inadequate. As a result, Alia modified Morgan's job responsibilities and reduced his pay accordingly. Approximately eight weeks after the modification, Morgan informed Alia that he had been hired by the local Von's grocery store; that he could no longer work his schedule at McDonald's; but that he would remain “on call” and let Alia know of any developments. Alia asserted that after 30 days had passed without hearing from Morgan, the company assumed that he had quit.

On June 22, 2011, the EEOC issued a Letter of Determination stating that there was reason to believe that Morgan was discriminated against “because of his disability and/or a perceived disability” and invited the parties to begin conciliation efforts. (Doc. 10, Decl. of Brendan M. Brownfield, Ex. G.) Two days later, EEOC Investigator Julio Espino (“Investigator Espino”) sent Alia a draft conciliation proposal, which suggested that Alia pay $304,178.53 in damages, revise its disability policies, provide ADA training for its employees, hire an equal employment consultant, post notice of the settlement, and agree to certain reporting requirements.

On June 28, 2011, Cathy Arias, Alia's counsel, contacted Investigator Espino to obtain further information regarding Morgan's claim. Defense counsel asked Investigator Espino to identify all the facts, witnesses, and documents supporting the EEOC's reasonable cause determination, including the exact nature of Morgan's alleged disability. Defense counsel asserts that Investigator Espino refused to disclose Morgan's disability or any other substantive information regarding the basis of the EEOC's reasonable cause determination. Investigator Espino, on the other hand, asserts that he does not recall defense counsel asking for information on Morgan's specific disability and maintains that he invited counsel to submit any questions or concerns in writing.

On July 7, 2011, a conciliation conference was held. After a brief telephone conversation with Morgan, Investigator Espino asked Alia's counsel at the conference, Michael Pagnozzi, whether Alia would agree to the EEOC's draft conciliation proposal. Defense counsel responded that Alia was not prepared to accept the EEOC's terms or make any counteroffer without first knowing what Morgan's disability was. After some discussion, Investigator Espino showed defense counsel a copy of the Letter of Determination, stated that Morgan had a perceived disability, and noted that one of the managers at the Oakhurst restaurant had acknowledged that Morgan was disabled. Alia subsequently extended a settlement offer of $5,000, but Morgan rejected the offer.

Defense counsel asserts that at that point, the conciliation meeting came to an end. However, according to Investigator Espino, the EEOC made a counteroffer of $199,178.53. Investigator Espino asserts that defense counsel rejected the offer and stated that the EEOC should just go ahead and issue the right to sue. Investigator Espino states that he attempted to keep the negotiations open, reminding defense counsel that a counteroffer from Alia was necessary in order to continue conciliation efforts. According to Investigator Espino, defense counsel repeated that the EEOC should just go ahead and issue the right to sue and then left.

On July 11, 2011, the EEOC served Alia a Notice of Conciliation Failure. The correspondence provided, in relevant part:

The Commission presented [Alia] with a proposal for resolution containing suggested monetary and injunctive relief and engaged in good faith efforts to negotiate the terms of an Agreement to resolve the charge at issue. The negotiations resulted in [Alia's] attorney proposing monetary relief far below the amount EEOC suggested as appropriate and making no offer of injunctive relief at all. Ultimately, [Alia's] attorney indicated to [the EEOC] that the parties were “not going to get anywhere” and [Alia] was unwilling to make any further offers during the conference.

Given [Alia's] position that it would make no further counteroffers, as well as the fact that the parties remain very far apart on all terms of relief, further efforts to resolve this charge in the conciliation process would be futile.

(Doc. 19, Ex. G.)

On September 13, 2011, the EEOC initiated this action for monetary damages and injunctive relief pursuant to Title I of the ADA and Title I of the Civil Rights Act of 1991 (“Civil Rights Act”). The complaint discloses that Morgan is disabled due to mental impairments that substantially limit him with respect to several major life activities, including “learning, speaking and brain function.” (Doc. 1, Compl., ¶ 13.) Furthermore, on September 14, 2011, the EEOC issued a press release relating to this lawsuit and identified Morgan's disability as cerebral palsy.

Alia now moves to dismiss this action. Alia argues that this action should be dismissed under Federal Rule of Civil Procedure 12(b)(1) because the EEOC's failure to conciliate in good faith prior to filing suit deprives this Court of subject matter jurisdiction. In the alternative, Alia contends that if good faith conciliation is not a jurisdictional requirement, but rather an element of the EEOC's claims: (a) dismissal is warranted under Federal Rule of Civil Procedure 12(b)(6); or (b) summary judgment is appropriate under Federal Rule of Civil Procedure 56 if the Court looks beyond the pleadings. Finally, in the event that the Court declines to dismiss this action or grant summary judgment in Alia's favor, Alia requests a more definite statement under Federal Rule of Civil Procedure 12(e) with respect to the nature and extent of Morgan's disability.

II. LEGAL STANDARDSA. Lack of Subject Matter Jurisdiction

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) is a challenge to the court's subject matter jurisdiction. “Federal courts are courts of limited jurisdiction,” and “[i]t is to be presumed that a cause lies outside this limited jurisdiction.” Kokkonen v. Guardian Life Ins. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). The party asserting federal jurisdiction carries the burden of establishing the contrary. Id.

A jurisdictional attack pursuant to Rule 12(b)(1) may either be facial or factual. White v. Lee, 227 F.3d 1214, 1242 (9th Cir.2000) (citation omitted). In a facial attack, the jurisdictional challenge is confined to the allegations in the complaint. See Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir.2004). “[T]he challenger asserts that the allegations in [the] complaint are insufficient on their face to invoke federal jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004). In resolving the issue, the court assumes that the allegations are true and draws all reasonable inferences in the plaintiff's favor. Wolfe, 392 F.3d at 362.

“By contrast, in a factual attack, the challenger disputes the [very] truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe Air, 373 F.3d at 1039. In resolving this type of challenge, the court “need not presume the truthfulness of the plaintiff's allegations.” Id. (citation omitted). Instead, the court “may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment.” Id. (citations omitted). Once the moving party has made a factual challenge by presenting affidavits or other evidence, it “becomes necessary for the party opposing the motion to present affidavits or any other evidence necessary to satisfy its burden of establishing that the court, in fact, possesses subject matter jurisdiction.” Colwell v. Dep't of Health & Human Servs., 558 F.3d 1112, 1121 (9th Cir.2009) (citation omitted).

B....