Wells v. Hi Country Auto Grp.

• Decision Date: 13 November 2013
• Docket Number: Case No. 12CV00828 WJ/KBM.
• Parties: Amanda WELLS, Plaintiff, v. HI COUNTRY AUTO GROUP d/b/a Hi Country Chvrolet, a New Mexico Corporation, and JEFF THOMAS, a natural person, Defendants.
• Court: U.S. District Court — District of New Mexico

982 F.Supp.2d 1261

Amanda WELLS, Plaintiff,

v.HI COUNTRY AUTO GROUP d/b/a Hi Country Chvrolet, a New Mexico Corporation, and JEFF THOMAS, a natural person, Defendants.

Case No. 12CV00828 WJ/KBM.

United States District Court,

D. New Mexico.

Nov. 13, 2013.

Little West, Long Pound & Komer PA, Santa Fe, NM, for Plaintiff.

Aaron C. Viets, Cristina A. Adams, Jennifer L. Duprez, Rodey, Dickason, Sloan, Akin & Robb, P.A., Albuquerque, NM, for Defendants.

MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S SEALED MOTION FOR PARTIAL SUMMARY JUDGMENT AND TO STRIKE DEFENDANTS' AFFIRMATIVE DEFENSES

WILLIAM P. JOHNSON, District Judge.

THIS MATTER comes before the Court upon Plaintiff's Sealed ¹ Motion for Partial Summary Judgment and to Strike the Defendants' Affirmative Defenses, filed September 20, 2013 (Doc. No. 150). Having considered the parties' arguments and the applicable law, the Court finds that Plaintiff's motion is partially well-taken and, therefore, is GRANTED in part and DENIED in part.

Background

This is a sexual harassment lawsuit based upon an allegedly hostile work environment. In her motion, Plaintiff requests that this Court strike each of Defendants' twenty three (23) affirmative defenses set forth in Defendants' Answer to Plaintiff's First Amended Complaint. (Doc. No. 81). Plaintiff argues that Defendants' affirmative defenses are without factual or legal merit. Defendants agreed to withdraw their Twelfth, Thirteenth, Fourteenth, Fifteenth, Sixteenth, Eighteenth, and Twenty Second affirmative defenses. Accordingly, Plaintiff's Motion is moot as to those affirmative defenses.

Discussion

I. Legal Standard

Federal Rule of Civil Procedure 12(f) permits the court to “strike from a pleading an insufficient defense.” Fed.R.Civ.P. However, motions to strike affirmative defenses are generally disfavored. See Friends of Santa Fe County v. LAC Minerals, Inc., 892 F.Supp. 1333, 1343 (D.N.M.1995) (citations omitted). To strike a defense, its legal insufficiency must be “clearly apparent.” Id. (same). A court “must be convinced that there are no questions of fact, that any questions of law are clear and not in dispute, and that under no set of circumstances could the defenses succeed.” Id. (same). In deciding a motion to strike, the court bears in mind the purpose of pleading an affirmative defense: to provide the plaintiff with fair notice. Falley v. Friends Univ., 787 F.Supp.2d 1255, 1257 (D.Kan.2011). The decision to strike an affirmative defense rests within the sound discretion of the district court. Hayne v. Green Ford Sales, Inc., 263 F.R.D. 647, 650 (D.Kan.2009). Rule 12(f) is intended to minimize delay, prejudice and confusion by narrowing the issues for discovery and trial. Hayne, 263 F.R.D. at 648–49.

The Tenth Circuit has not yet ruled on whether the Iqbal/Twombly pleading standard applies to affirmative defenses. However, other courts in this circuit, this Court included, have held that the Iqbal/Twombly pleading standard does not apply to affirmative defenses. See Equal Employment Opportunity Commission v. Lockheed Martin, Civil No. 09–952 WJ/RHS (D.N.M. May 20, 2010) (Doc. 47 at 2–4); see also Falley, 787 F.Supp.2d at 1258–59 (acknowledging split in circuits and deciding that pleading standards of Iqbal and Twombly should be limited to complaints and not extended to affirmative defenses). “Unlike a plaintiff filing a complaint, a defendant asserting an affirmative defense does not bring the jurisdiction of the federal courts to bear on what was previously a private matter.” Lane v. Page, 272 F.R.D. 581, 596 (D.N.M.2011) (declining to apply the heightended pleading standard to affirmative defenses). Further, as the Court in Falley pointed out, “applying Twombly and Iqbal to affirmative defenses would also invite many more motions to strike, which achieves little.” Falley, 787 F.Supp.2d at 1259. Thus Plaintiffs' motion will be decided based on the standard set forth in Fed.R.Civ.P. 8(b)(1)(A), which requires that defenses be articulated “in short and plain terms.” ²

II. Affirmative Defenses Seven and Twenty Shall Be Struck

Plaintiff correctly points out that Defendants' Seventh and Twentieth affirmative defenses are really two parts of the same affirmative defense. Defendants Seventh and Twentieth affirmative defenses both address the affirmative defense set forth by the United States Supreme Court in a pair of cases handed down on the same day referred to as the Faragher/Ellerth³ defense. “An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment createdby a supervisor with immediate (or successively higher) authority over the employee.” Faragher v. City of Boca Raton, 524 U.S. 775, 807, 118 S.Ct. 2275, 141 L.Ed.2d 662 (1998). “When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence [ ]. The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.” Id.

Plaintiff contends that Defendants are barred from raising the Faragher/ Ellerth defense because the harasser, Defendant Thomas, is the president and owner of the employing company. “Every Court of Appeals to have considered this issue has held that the Faragher/Ellerth affirmative defense is unavailable when the supervisor in question is the employer's proxy or alter ego.” Townsend v. Benjamin Enterprises, Inc., 679 F.3d 41, 52–53 (2nd Cir.2012) (citing Ackel v. Nat'l Commc'ns, Inc., 339 F.3d 376, 383–84 (5th Cir.2003)) (holding that the Faragher/Ellerth defense is unavailable “when the harassing supervisor is ... ‘indisputably within that class of an employer organization's officials who may be treated as the organization's proxy’ ” (quoting Faragher, 524 U.S. at 789, 118 S.Ct. 2275) (emphasis omitted)); Johnson v. West, 218 F.3d 725, 730 (7th Cir.2000) (“Vicarious liability automatically applies when the harassing supervisor is [ ] ‘indisputably within that class of an employer organization's officials who may be treated as the organization's proxy.’ ” (quoting Faragher, 524 U.S. at 789, 118 S.Ct. 2275)); Passantino v. Johnson & Johnson Consumer Prods., Inc., 212 F.3d 493, 517 (9th Cir.2000) (“an individual sufficiently senior in the corporation must be treated as the corporation's proxy for purposes of liability” which “constitutes a bar to the successful invocation of the [ Faragher/Ellerth ] defense.”).

Further, the EEOC's interpretation of Title VII, as set forth in its Enforcement Guidance, is in accord with this analysis. SeeEEOC Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors, 1999 WL 33305874, at *18 (June 18, 1999) (“[When the alleged harasser qualifies as the employer's proxy], the official's unlawful harassment is imputed automatically to the employer. Thus, the employer cannot raise the [ Faragher/Ellerth ] affirmative defense, even if the harassment did not result in a tangible employment action.” (footnote omitted)). The EEOC's Enforcement Guidance is entitled to deference to the extent it has the power to persuade. See Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 110 n. 6, 122 S.Ct. 2061, 153 L.Ed.2d 106 (2002) (EEOC's interpretation contained in Compliance Manual subject to deference).

The Tenth Circuit has not yet ruled on this issue. The Tenth Circuit was confronted with this question in Helm v. Kansas, 656 F.3d 1277 (10th Cir.2011). However, the Court did not decide the issue because it determined that the harasser was not the alter-ego of the employer. See Helm, 656 F.3d at 1286 (“We have not squarely addressed whether an employer may rely on the Faragher/ Ellerth defense when a victimized employee seeks to impose liability on the employer under the alter-ego theory[ ]. We need not decide that issue to resolve this case, however, as we conclude that [Plaintiff's] argument fails for the reason that [the alleged harasser] did not operate as the alter ego of the [employer].”). In reaching its determinationthat the harasser was not the alter-ego of the employer, the Tenth Circuit considered several factors, such as whether the employee “(1) had the authority to hire and fire employees in the [ ] department; (2) was the ultimate supervisor of all employees in the department; (3) had the ultimate authority to disapprove all [business activity]; (4) [had any supervisors above him]; (5) held a senior level title that was regarded as very important; and (6) exercis[ed] policy-making [authority].” Id. (citation omitted). “Only individuals with exceptional authority and control within an organization can meet [the alter-ego] standard.” Id.

Although the Tenth Circuit has not specifically barred the Faragher/Ellerth defense where the harasser is an alter-ego of an employer, the Court is persuaded by the reasoning of the other circuits. Where the harasser is “indisputably within that class of an employer organization's officials who may be treated as the organization's proxy[,]” the affirmative defense is unavailable. See Faragher, 524 U.S. at 789, 118 S.Ct. 2275. It is clear based upon the factors set forth by the Tenth Circuit in Helm that Defendant Thomas is an a position of sufficient power to be considered the company's proxy; it does not get any higher than the company's president and owner. Accordingly, Defendants are not entitled to the Faragher/Ellerth defense with regard to the allegations against Defendant Thomas. Therefore, Defendants' Seventh and Twentieth affirmative defenses are struck.

III. There is a Dispute of Fact Precluding the Court From Striking Defendants' Eighth Affirmative Defense

Plaintiff seeks...