Gorney v. Arizona Board of Regents et al

Filing 25

IT IS ORDERED the Report and Recommendation (Doc. 22 ), is adopted in part, modified in part, and rejected in part. It is further Ordered Defendant's Motion to Dismiss (Doc. 3 ) is granted in part and denied in part. It is further Ordered Defendant Arizona Board of Regents is dismissed from the federal claims, Counts Two, Three, Four, and Five of Plaintiff's Complaint, with prejudice. It is further Ordered Plaintiff's Complaint is dismissed for failure to state a claim. Plaintiff is granted leave to file a First Amended Complaint on or before October 24, 2013 consistent with the terms of this Order. If Plaintiff fails to file a First Amended Complaint on or before October 24, 2013, the Clerk of Court must, withou t further notice, enter a judgment dismissing this case with prejudice. It is further Ordered Plaintiff's Motion for Summary Judgment (Doc. 15 ) and Plaintiff's Motion for Judgment on the Pleadings (Doc. 18 ) are denied as moot. Signed by Judge Cindy K Jorgenson on 9/24/2013. (Attachments: # 1 Notice to Pro Se Non-Prisoner Parties, # 2 Non-Prisoner Pro Se Request for E-Noticing Form) (MFR)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Dale Gorney, a single man,

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No. CV-13-00023-TUC-CKJ(HCE)

Plaintiff,
ORDER

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v.

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Arizona Board of Regents; Thomas P.
Miller; Dan Nelson; Jacqueline Lee Mok;
Allison Vaillancourt; Steve Husman,

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Defendants.
On July 10, 2013, Magistrate Judge Hector C. Estrada issued a Report and
Recommendation, (Doc. 22), in which he recommended dismissing the Arizona Board of
Regents from Plaintiff’s federal claims with prejudice, dismissing Counts One, Six and
Seven of Plaintiff’s Complaint as untimely and dismissing Counts Two through Five
without prejudice for failing to state a valid claim. Magistrate Judge Estrada further
recommended denying Plaintiff’s Motion for Summary Judgment and Motion for
Judgment on the Pleadings as moot.
Magistrate Judge Estrada advised the Parties that written objections to the Report
and Recommendation were to be filed within fourteen days of service of a copy of the
Report and Recommendation pursuant to 28 U.S.C. §636(b).

Plaintiff has filed an

objection. (Doc. 23). Defendants have filed a response. (Doc. 24).

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I.

Background1

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In 2011, Plaintiff was employed with the University of Arizona. He alleges that

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from March 2011 through May 2011, he submitted three alleged wrongful conduct

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disclosures and one whistleblower complaint to the University of Arizona. Specifically,

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he alleges that he had information alleging wrongful conduct which evidenced a violation

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of law, mismanagement, and gross waste or misappropriation of public funds. He further

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alleged an abuse of authority to investigate alleged wrongful conduct by Steve Husman,

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the director of the University of Arizona, Tucson Area Agricultural Center.

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Dr. Allison Vaillancourt, the Vice President of Human Resources, was assigned to

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investigate Plaintiff’s allegations of wrongful conduct.

Dr. Vaillancourt forwarded

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Plaintiff’s disclosures to Thomas P. Miller, an Associate Provost for Faculty Affairs.

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Plaintiff alleges that Mr. Miller acted in bad faith when he concluded that Plaintiff’s

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disclosures were illegitimate and did not warrant any investigation.

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After reviewing Mr. Miller’s conclusions, Plaintiff requested a whistleblower

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review hearing. Dr. Vaillancourt reviewed Plaintiff’s request but ultimately agreed with

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Mr. Miller’s determination of Plaintiff’s disclosures. On May 17, 2011 Dr. Vaillancourt

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denied Plaintiff’s request for a whistleblower review hearing. Plaintiff alleges that Dr.

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Vaillancourt acted inappropriately in denying his request for a whistleblower review

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hearing due to her conflict of interest in the matter.

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Plaintiff alleges that as a result of his disclosures, he was subjected to a retaliatory

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investigation on April 8, 2011 by Director Husman in connection with Plaintiff’s request

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for 18 hours of overtime compensation. During these 18 hours of overtime, Plaintiff

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worked on issues related to his disclosures. Director Husman denied Plaintiff’s overtime

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compensation and demanded that Plaintiff meet with him to discuss the specific job

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duties that required the use of 18 hours of overtime. Plaintiff refused to discuss his use of

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overtime with Director Husman and he received a written reprimand. Plaintiff was then

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The background information is principally derived from Plaintiff’s Complaint.
(Doc. 1-2). The Court accepts as true the factual allegations set forth in Plaintiff’s
Complaint for the purposes of resolving these motions.
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placed on disciplinary probation, received a pre-discharge notice and was ultimately

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terminated from his employment on May 25, 2011.

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Plaintiff alleges that his disclosures should have remained confidential pursuant to

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the University of Arizona whistleblower policy. Also, since his use of overtime was

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directly related to the filing of his disclosures, which were directly related to Director

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Husman’s conduct, he should not have been required to meet with Director Husman to

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discuss his use of overtime.

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Jacqueline Lee Mok, the University of Arizona Investigation Officer for the President’s

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Office, failed to adhere to Arizona law by finding his disclosures illegitimate.

Finally, Plaintiff alleges that the Defendants including

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Procedural History

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On December 12, 2012, Plaintiff filed a complaint in Pima County Superior Court.

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In his Complaint, Plaintiff alleges that his termination from employment at the University

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of Arizona was (1) in violation of state public policy; (2) a retaliatory discharge in

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violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §201 et seq.; (3)

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retaliation in violation of the First Amendment; (4) a violation of the Equal Protection

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Clause of the Fourteenth Amendment; (5) a violation of the Procedural Due Process

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rights of the Fourteenth Amendment; (6) a breach of the implied-in-law covenant of good

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faith and fair dealing; and (7) tortious interference with a contractual relationship. (Doc.

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1-2). Plaintiff’s Complaint seeks (1) reinstatement of employment; (2) a written

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employment contract; (3) back-pay; (4) loss of earnings; (5) general damages; and (6)

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punitive damages.

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On January 10, 2013, Defendants filed a notice of removal in this Court. (Doc. 1).

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After removal, Defendants moved to dismiss this matter, pursuant to Fed.R.Civ.P.

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12(b)(6), arguing the Plaintiff’s Complaint fails to state any claim upon which relief may

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be granted. (Doc. 3). Plaintiff filed his response on January 18, 2013. (Doc. 7). On

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January 22, 2013, Plaintiff filed an Amended Response to Defendants’ Motion to

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Dismiss. (Doc. 9). Defendants filed a Reply on February 1, 2013. (Doc. 11). On

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February 5, 2013, Plaintiff filed an Objection to Defendants’ Reply in Support of

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Defendants’ Motion to Dismiss. (Doc. 13). Then on February 13, 2013, Plaintiff filed an

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Amended Objection to Defendants’ Reply in Support of Defendants’ Motion to Dismiss.

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(Doc. 14).

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On February 19, 2013, Plaintiff filed a Motion for Summary Judgment.

(Doc.

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15). Defendants filed a Response on March 21, 2013. (Doc. 16). Plaintiff filed a Reply

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on March 27, 2013. Then, on May 14, 2013, Plaintiff filed a Motion for Judgment on the

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Pleadings. (Doc. 18). Defendants filed a Response on May 15, 2013. (Doc. 19).

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Plaintiff filed his Reply on May 22, 2013. (Doc. 20). On June 4, 2013, Plaintiff filed an

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Amended Reply in support of his Motion for Judgment on the Pleadings. (Doc. 21).

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On July 10, 2013, Magistrate Judge Hector C. Estrada issued a Report and

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Recommendation. (Doc. 22). In his Report and Recommendation, Magistrate Judge

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Estrada recommended dismissing the Arizona Board of Regents from Plaintiff’s federal

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claims with prejudice, dismissing Counts One, Six and Seven of Plaintiff’s Complaint as

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untimely and dismissing Counts Two through Five as failing to state a claim with leave to

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amend. Magistrate Judge Estrada further recommended denying Plaintiff’s Motion for

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Summary Judgment and Motion for Judgment on the Pleadings as moot.

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Plaintiff

filed

Objections

to

Magistrate

Judge

Estrada’s

Report

and

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Recommendation on July 26, 2013. (Doc. 23). Plaintiff agrees with Magistrate Judge

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Estrada’s recommendation that his Complaint was insufficient and he does not object to

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Magistrate Judge Estrada’s recommendation that Counts Three through Five of Plaintiff’s

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Complaint be dismissed with leave to amend.

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However, Plaintiff objects to the dismissal of Count Two of his Complaint

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alleging retaliatory discharge in violation of the Fair Labor Standards Act (“FSLA”).

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Further, Plaintiff objects to the dismissal of the Arizona Board of Regents from his

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federal claims, the dismissal of his state claims as untimely, and the denial of his Motions

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for Summary Judgment and Judgment on the Pleadings.

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response to Plaintiff’s objections. (Doc. 24).

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Defendants have filed a

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II.

Standard of Review

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This Court “may accept, reject, or modify, in whole or in part, the findings or

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recommendations made by the magistrate.” 28 U.S.C. § 636(b)(1). Pursuant to 28

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U.S.C. § 636(b)(1), if a party makes a timely objection to a magistrate judge's

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recommendation, then this Court is required to “make a de novo determination of those

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portions of the [report and recommendation] to which objection is made.” See also

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Schmidt v. Johnstone, 263 F.Supp.2d 1219, 1226 (D.Ariz. 2003) (reading the Ninth

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Circuit's decision in Reyna-Tapia as adopting the view that district courts are not required

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to review “any issue that is not the subject of an objection”); United States v. Reyna-

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Tapia, 328 F.3d 1114 (9th Cir.2003) (disregarding the standard of review employed by

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the district court when reviewing a report and recommendation to which no objections

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were made).

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Arizona Board of Regents

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Magistrate Judge Estrada concluded that Plaintiff’s federal claims against the

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Arizona Board of Regents (“the Board”), specifically Counts Two through Five, fail as a

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matter of law. Counts Three, Four and Five allege violations of Plaintiff’s rights pursuant

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to the First Amendment and Fourteenth Amendment. These claims are brought pursuant

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to 42 U.S.C. §1983. See Gomez v. Toledo, 446 U.S. 635, 638 (1980)(citing 42 U.S.C.

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§1983)(“Section 1983 provides a cause of action for the ‘deprivation of any rights,

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privileges, or immunities secured by the Constitution and laws’ by any person acting

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‘under color of any statute, ordinance, regulation, custom, or usage, or any State or

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Territory.’”).

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“The eleventh amendment bars suits in federal courts by private citizens against a

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state.” Ronwin v. Shapiro, 657 F.2d 1071, 1073 (9th Cir. 1981). The Board’s funds

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consist of state funds and it is treated as the State of Arizona pursuant to Arizona law.

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Rutledge v. Arizona Bd. of Regents, 660 F.2d 1345, 1349 (9th Cir. 1981) (abrogated on

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other grounds Haygood v. Younger, 769 F.2d 1350, 1356 (9th Cir. 1985).

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a person against whom a §1983 claim for money damages may be asserted. Will v.

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Michigan Dept. of State Policy, 491 U.S. 58, 66, 109 S.Ct. 2304 (1989). As such, the

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Board possesses Eleventh Amendment immunity from Plaintiff’s §1983 claims. See

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Mitchell v. Los Angeles Community College Dist., 861 F.2d 198, 201 (9th Cir. 1988); see

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also Ansel Adams Publishing Rights Trust v. PRS Media Partners, LLC, 502 Fed. Appx.

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659, 660-661 (9th Cir. 2012)(the Board, as the governing body for Arizona’s public

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universities, is immune from federal law suits pursuant to the Eleventh Amendment).

A State is not

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Count Two alleges that Defendants violated the Fair Labor Standards Act.

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Congress has not abrogated the State’s sovereign immunity from FLSA law suits. See

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Alden v. Maine, 527 U.S. 706, 712, 119 S.Ct. 2240, 2246 (1999). Thus, the Eleventh

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Amendment protects the Board from suit under the FLSA absent a waiver of immunity.

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See Id. Plaintiff argues that the Board waived its immunity when it removed this action

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from state court to federal court. See Lapides v. Board of Regents of University System of

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Georgia, 535 U.S. 613, 616-617, 122 S.Ct. 1640 (2002)(holding that a State’s act of

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removing a lawsuit from state court to federal court waives its Eleventh Amendment

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immunity from State based claims).

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Two years after the Supreme Court decided Lapides, the Ninth Circuit Court of

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Appeals extended the ruling in Lapides to federal claims. Embury v. King, 361 F.3d 562,

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566 (9th Cir. 2004). However, the Embury court noted that its holding did not apply to

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cases where Congress acted beyond its power over the States and had not validly

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abrogated the State’s immunity through the Fourteenth Amendment. Embury v. King, 361

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F.3d 562, 566, n.20 (9th Cir. 2004). Thus, since Congress has not validly abrogated the

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States’ sovereign immunity on FLSA claims, see Alden v. Maine, 527 U.S. 706, 712, 119

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S.Ct. 2240, 2246 (1999), the Court finds that the Board did not waive its immunity on

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Plaintiff’s FLSA claim by removing this action to federal court. Accordingly, the Board

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is dismissed as to the federal claims in Plaintiff’s Complaint.

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State Claims – Statute of Limitations

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When the statute of limitations forms the basis of a motion to dismiss for failure to

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state a claim, the motion can only be granted “if the assertions of the complaint, read with

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the required liberality, would not permit the plaintiff to prove that the statute was tolled.”

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Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir.1980); see also TwoRivers v.

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Lewis, 174 F.3d 987, 991 (9th Cir.1999). The complaint cannot be dismissed unless “it

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appears beyond doubt that the plaintiff can prove no set of facts that would establish the

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timeliness of the claim.” Supermail Cargo, Inc. v. United States, 68 F.3d 1204, 1207 (9th

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Cir.1995).

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Pursuant to Arizona Revised Statute §12-821, claims against any public entity or

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public employee are subject to a one year statute of limitations.2 Dube v. Likins, 216

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Ariz. 406, 416 (Ariz. Ct. App. 2007).

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subject to a one year statute of limitations. A cause of action against a public entity or

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public employee accrues “when the damaged party realizes he or she has been damaged

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and knows or reasonably should know the cause, source, act, event, instrumentality or

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condition which caused or contributed to the damage.” A.R.S. § 12–821.01(B).

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Plaintiff does not dispute that his state claims are

Defendants contend that Plaintiff’s claim accrued when his employment was

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terminated on May 25, 2011.

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Defendants on or before May 25, 2012. Since Plaintiff’s Complaint was filed with the

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Pima County Superior Court on December 12, 2012, it was untimely.

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As such, Plaintiff was required to file suit against

Plaintiff does not dispute that he was terminated on May 25, 2011 or that he filed

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his Complaint on December 12, 2012.

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Ariz.R.Stat. §12-821.01(C), the statute of limitations is tolled pending the resolution of

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any administrative remedies. Plaintiff explains that after he was terminated, he appealed

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his termination pursuant to The University of Arizona policy 406.3 On July 14, 2012,

However, Plaintiff argues that pursuant to

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The Defendants in this case consist of the Arizona Board of Regents, a public
entity, and several public employees.
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The University of Arizona Staff Dispute Resolution Procedures provide that “any
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Plaintiff alleges that he received the final determination affirming his termination, thus

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concluding his administrative remedies. Accordingly, Plaintiff contends that since his

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claim was filed within one year after July 14, 2012, it is timely.

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Pursuant to Ariz.R.Stat. §12-821.01(C), “any claim that must be submitted to a

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binding or nonbinding dispute resolution process or an administrative claims process or

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review process pursuant to … administrative or governmental rule or regulation or

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contractual term shall not accrue for the purposes of this section until all such procedures,

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processes, or remedies have been exhausted.” Ariz.R.Stat. §12-821.01(C)(emphasis

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added).

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Thus, A.R.S. §12-821.01(C) applies only if Plaintiff was required to exhaust the

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administrative remedies provided by UA Policy 406.0 before seeking relief in the courts.

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See Kosman v. State, 199 Ariz. 184, 186 (Ariz. Ct. App. 2000). Defendants argue that the

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use of the word “may” in the University of Arizona Staff Dispute Resolution Procedure

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makes it permissive rather than mandatory. See Walters v. Maricopa County, 195 Ariz.

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476, 481 (Ariz. Ct. App. 1999). As such, it is not subject to §12-821.01(C) tolling.

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Magistrate Judge Estrada agreed with Defendants and recommended dismissing Counts

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One, Six and Seven as untimely. However, Plaintiff argues that even if the statute of

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limitations was not tolled pursuant to §12-821.01(C), his claim is subject to equitable

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tolling. Magistrate Judge Estrada did not address the issue of equitable tolling in his

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Report and Recommendation.

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The doctrine of equitable tolling is recognized in Arizona. McCloud v. State, Ariz.

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Dept. of Public Safety, 217 Ariz. 82, 87 (Ariz. Ct. App. 2007). The Ninth Circuit Court

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of Appeals has applied the doctrine of equitable tolling when there is a lack of clarity in

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the law. Capital Tracing, Inc. v. United States, 63 F.3d 859, 862 (9th Cir. 1995). In

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classified employee may file a dispute resolution request where the action complained
about involves a violation of public policy such as retaliatory action for making a goodfaith disclosure of alleged wrongful conduct to a public body or to the designated
University official.” (Doc. 11, Staff Dispute Resolution Procedure, UA Policy 406.0 at
1)(emphasis added).

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Walters, the court held that the use of the word “may” in A.R.S. §38-532(H)4 rendered

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use of the administrative remedies permissive and did not require a complaint to such a

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board prior to filing a civil action pursuant to §23-1501.

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195 Ariz. 476, 481 (Ariz. Ct. App. 1999).

Walters v. Maricopa County,

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Plaintiff has brought his wrongful termination claim pursuant to §23-1501. As

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such, it appears that Defendants may be correct that the use of the word “may” in the

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University of Arizona Staff Dispute Resolution Procedure 406.0 made it a permissive

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administrative remedy and not mandatory as required for the §12-821.01(C) tolling

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provision.

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However, Walters did not address the procedures set forth in the University of

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Arizona Dispute Resolution Procedure 406.0. See Walters v. Maricopa County, 195

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Ariz. 476 (Ariz. Ct. App. 1999). Further, “Arizona case law solidly supports the …

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argument that the presence of the word “may” in an administrative procedure does not

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necessarily render the procedure permissive.” Mullenaux v. Graham County, 207 Ariz. 1,

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5 (Ariz. Ct. App. 2004)(holding that use of the word “may” in A.R.S. §11-356(B) did not

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render administrative review permissive and required a former employee to comply with

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the county grievance procedures prior to filing a civil suit). Additionally, there are

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several courts in Arizona that have interpreted the word “may” in an administrative

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procedure to refer to the option for review as opposed to making the use of the statute

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itself optional. See Id.

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Further, the doctrine of equitable tolling has been applied in situations analogous

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to the present case. In Kosman v. State, 199 Ariz. 184 (Ariz. Ct. App. 2000), the Arizona

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Court of Appeals applied the doctrine of equitable tolling to a pro se prisoner who failed

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to timely file a notice of claim against the State because he first pursued his claim

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Arizona Revised Statute §38-532(H), authorizes a former employee to make a
complaint to an independent personnel board, a community college district governing
board, a school district governing board, or a city or town council if that employee
believes that as a result of a disclosure of information of public concern a personnel
action was taken against him.

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through the prison’s permissive administrative grievance procedure. Kosman v. State,

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199 Ariz. 184, 186-187 (Ariz. Ct. App. 2000). The court in Kosman determined that

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plaintiff’s tort claim did not require submission to the prison’s grievance system, and thus

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was not subject to tolling pursuant to §12-821.01(C). However, the Court held that if

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plaintiff’s assumption that exhaustion of administrative remedies was required was

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reasonable then his failure to timely file his notice of claim was excusable and is subject

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to equitable tolling. Id.

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The Court finds that the doctrine of equitable tolling is appropriate in this case.

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After a review of the case law in conjunction with the factual issues in this case, the

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Court concludes that there is a lack of clarity in the law regarding whether use of the

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word “may” in UA Policy 406.0 renders those procedures permissive, and it was

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reasonable for the pro se Plaintiff to assume that he was required to complete the

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administrative review process pursuant to the University of Arizona Dispute Resolution

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Procedure 406.0 prior to filing a civil action. Thus, his failure to timely file his claim was

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excusable. Assuming Plaintiff’s allegations are true, the administrative review process

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concluded on July 14, 2011. Since Plaintiff’s Complaint was filed within one year of

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July 14, 2011, it is timely. Accordingly, the Court rejects that portion of Magistrate

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Judge Estrada’s Report and Recommendation that recommended dismissing Counts One,

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Six and Seven as untimely.

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Failure to State a Claim

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Count One – Wrongful Termination

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In Count One, Plaintiff alleges he was wrongfully terminated in violation of

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A.R.S. §23-1501(A)(3)(c)(ii). Pursuant to Arizona Employment Protection Act, A.R.S. §

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23–1501(3)(c)

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for wrongful termination if the employer terminated the employment relationship in

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violation of public policy. The AEPA enumerates the public policy violations that

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support a wrongful termination action in Arizona. See A.R.S. §23-1501. Plaintiff alleges

(Supp.2006)

(“AEPA”),

an

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employee

may

bring

a

claim

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that his wrongful termination claim is supported by A.R.S. §23-1501(A)(3)(c)(ii), which

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provides:

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[t]he disclosure by the employee in a reasonable manner that
the employee has information or a reasonable belief that the
employer, or an employee of the employer, has violated, is
violating or will violate the Constitution of Arizona or the
statutes of this state to either the employer or a representative
of the employer who the employee reasonably believes is in a
managerial or supervisory position and has the authority to
investigate the information provided by the employee and to
take action to prevent further violations of the Constitution of
Arizona or statutes of this state or an employee of a public
body or political subdivision of this state or any agency of a
public body or political subdivision.
A.R.S. §23-1501(A)(3)(c)(ii).

Plaintiff alleges that he was terminated in

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retaliation for filing four disclosures. However, Plaintiff does not identify the contents of

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his disclosures.

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disclosure. According to Plaintiff, his second disclosure related to a violation of federal

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law, the FLSA. However, there is no statutory public policy exception for whistleblowing

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associated with federal regulations. See Galati v. America West Airlines, Inc., 205 Ariz.

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290, 294 (Ariz. Ct. of App. 2003)(holding that §23-1501(A)(3)(c)(ii) does not support a

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claim for wrongful discharge based on a whistleblower disclosure related to federal law).

Plaintiff only makes one reference to the contents of his second

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As such, A.R.S. §23-1501 does not support Plaintiff’s claim for wrongful

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termination based on his disclosures related to a violation of federal law. Further, since

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the Complaint does not identify the contents of Plaintiff’s other disclosures nor does it

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specify whether any of his disclosures were related to a violation of Arizona State law,

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Count One of Plaintiff’s Complaint is dismissed with leave to amend.

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Count Two - FLSA

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In Count Two Plaintiff alleges that Defendants retaliated against him in violation

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of the FLSA. Pursuant to the Act’s anti-retaliation provision, it is unlawful for an

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employer to discharge an employee because the employee “caused to be instituted any

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proceeding” related to the assertion of wage rights or “filed any complaint”, regarding

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wage rights. 29 U.S.C § 215(a)(3).

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In order to demonstrate a prima facie case of retaliation pursuant to the FLSA,

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Plaintiff must show that (1) he engaged in a protected activity, (2) he suffered an adverse

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employment action, and (3) there was a causal link between his activity and the

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employment decision. Cf. Raad v. Fairbanks North Star Borough School Dist., 323 F.3d

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1185, 1196-1197 (9th Cir. 2009).

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In order for a claim to “fall within the scope of the anti-retaliation provision, a

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complaint must be sufficiently clear and detailed for a reasonable employer to understand

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it, in light of both content and context, as an assertion of rights protected by the statute

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and a call for their protection.” Kasten v. Saint-Gobain Performance Plastics Corp., --

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U.S. --, 131 S.Ct. 1325, 1335 (2011). Magistrate Judge Estrada found that Plaintiff failed

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to allege that he placed his employers on notice that he was making a complaint pursuant

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to the FLSA. However, the Court disagrees with Magistrate Judge Estrada’s conclusions.

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Plaintiff asserts in his Complaint that on April 17, 2011, he submitted a disclosure

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of wrongful conduct to Thomas P. Miller. This disclosure alleged an abuse of authority,

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mismanagement, and a violation of law against Director Husman related to his failure to

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compensate Plaintiff for the 18 hours of overtime he accumulated.5 Plaintiff further

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alleged that in his opinion that was a violation of the FLSA. Accepting Plaintiff’s

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assertion of facts related to his April 17, 2011 disclosure as true, the Court finds that

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Plaintiff sufficiently placed his employer on notice that he was filing a complaint related

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to his rights pursuant to the FLSA. See Kasten v. Saint-Gobain Performance Plastics

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Corp., -- U.S. --, 131 S.Ct. 1325, 1335 (2011).

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As such, Plaintiff has sufficiently alleged that he was engaged in protected activity

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by filing a complaint related to his overtime compensation. Since Plaintiff alleges that he

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was terminated from employment, he has also sufficiently alleged that he suffered an

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5

According to §207(a)(2)(C) of the FLSA, any employee that works in addition to
40 hours in one week is entitled to compensation for his employment in excess of 40
hours at a “rate not less than one and one half times the regular rate at which he is
employed.” 29 U.S.C. §207(a)(2)(C).
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adverse employment action. However, the Court finds that Plaintiff has failed to allege

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or provide any factual allegations to demonstrate that his termination was linked to the

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filing of his complaint related to his overtime compensation.

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A reading of Plaintiff’s Complaint appears to allege that Director Husman initiated

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a retaliatory investigation against Plaintiff for filing a whistleblower complaint against

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him. Plaintiff has not indicated in his Complaint the contents of his whistleblower

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complaint or even alleged that it was related to wage rights.6 As such, his Complaint fails

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to sufficiently allege that he was retaliated against by Director Husman as a result of a

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complaint related to wage rights when Director Husman began investigating Plaintiff’s

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use of overtime.

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Plaintiff acknowledges that he refused to meet with Director Husman to discuss

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his use of overtime and as a result he was terminated for insubordination. Plaintiff asserts

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in conclusory form that he was terminated by Director Husman as a result of his filing.

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However, Plaintiff does not allege that Director Husman was even aware of his filing,

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which related to wage issues, at the time he was terminated or that Director Husman or

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any other Defendant retaliated against him by terminating his employment due to his

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filing related to wage issues.7

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Additionally, Plaintiff has failed to allege how the actions of the other Defendants

19

correlated to Director Husman’s decision to terminate Plaintiff’s employment allegedly in

20

retaliation for Plaintiff’s filing of a complaint related to his wage issues. Plaintiff’s

21

Complaint is conclusory and there are no factual assertions alleged in Plaintiff’s

22
6

23
24
25
26
27
28

Plaintiff attached as Exhibit D to his Objections to the Report and
Recommendation a copy of his email related to his whistleblower complaint. His
complaint appears to relate to Director Husman’s refusal to share the work schedules of
Plaintiff’s co-workers with Plaintiff that Plaintiff alleged were being compensated for a
full 40 hour week when they were not working a full 40 hours. In response Defendant
Thomas P. Miller asserted that his allegations that his supervisor refused to share the
work schedules of his co-workers with Plaintiff rose to the level of a matter of public
concern warranting whistleblower protection. (Doc. 23-4).
7

Moreover, Plaintiff specifically alleges that he was terminated for
insubordination for failing to meet with Director Husman to discuss his use of overtime.

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1

Complaint to support Plaintiff’s claim that he was retaliated against in violation of the

2

Fair Labor Standards Act. However, since it is possible that Plaintiff can amend this

3

claim, the Court grants Plaintiff leave to amend.

4
5
6

Counts Three to Five – First and Fourteenth Amendment Claims
Magistrate Judge Estrada’s Report

and

Recommendation

recommended

7

dismissing Counts Three through Five of Plaintiff’s Complaint for failure to state a valid

8

claim. However, Magistrate Judge Estrada also recommended granting Plaintiff leave to

9

file an amended complaint. Plaintiff has not objected to Magistrate Judge Estrada’s

10

recommendation related to Counts Three through Five and has conceded that his

11

Complaint was insufficient in certain respects. Further, Defendants have not objected to

12

granting Plaintiff leave to amend his Complaint.

13

Magistrate Judge’s recommendation regarding Counts Three through Five of Plaintiff’s

14

Complaint.

As such, the Court adopts the

15
16

Count Six – Breach of Implied Covenant of Good Faith

17

In Count Six Plaintiff alleges that Defendants breached the covenant of good faith

18

and fair dealing. Pursuant to Arizona law, an employment relationship is contractual in

19

nature. A.R.S. §23-1501(A)(1). “The law implies a covenant of good faith and fair

20

dealing in every contract.” McAlister v. Citibank (Arizona), a Subsidiary of Citicorp, 171

21

Ariz. 207, 213 (Ariz. Ct. of App. 1992). “This implied covenant prevents either party

22

from acting to ‘impair the right of the other [to] receive the benefits which flow from

23

their agreement’” Id. quoting Rawlings v. Apodaca, 151 Ariz. 149, 153 (Ariz. 1986).

24

While this implied covenant is normally remedied by an action on contract, it can also

25

provide the basis for imposing tort damages.

26

Subsidiary of Citicorp, 171 Ariz. 207, 213 (Ariz. Ct. of App. 1992). The contract at issue

27

in the case at bar is Plaintiff’s at-will employment contract with the University of

28

Arizona. In his Complaint, Plaintiff alleges a tortious breach of the implied covenant of

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McAlister v. Citibank (Arizona), a

1

good faith and fair dealing related to that contract.

2

However, in Arizona, a “tortious ‘bad faith’ cause of action arising out of a breach

3

of an employment agreement, when no public policy is violated, is prohibited.” Harris v.

4

Superior Court of Arizona ex rel, County of Maricopa, 278 Fed. Appx. 719, 721 (9th Cir.

5

2008) citing Nelson v. Phoenix Resort Corp., 181 Ariz. 188, 198 (Ariz. Ct. of App. 1994).

6

Since the Court has already determined that Plaintiff failed to sufficiently plead that he

7

was terminated as retaliation for filing a complaint in violation of Arizona public policy,

8

his cause of action for tortious bad faith in prohibited. See Id.

9

alleged that he was terminated from his employment for insubordination based on his

10

failure to discuss his use of overtime with Director Husman. Assuming the allegations in

11

Plaintiff’s Complaint are true, it appears he was fired for cause. As such, Count Six is

12

dismissed with leave to amend.

Further, Plaintiff has

13
14

Count Seven - Tortious Interference with a Contractual Relationship

15

In Count Seven Plaintiff alleges that Defendant interfered with his contractual

16

relationship with the University of Arizona. “Tort liability may be imposed upon a

17

defendant who intentionally and improperly interferes with the plaintiff's rights under a

18

contract with another if the interference causes the plaintiff to lose a right under the

19

contract.” Snow v. Western Sav. & Loan Ass'n, 152 Ariz. 27, 730 P.2d 204, 211

20

(Ariz.1986) (internal citations omitted). The five elements of the tort of interference with

21

an employment contract are: (1) the existence of a contractual relationship or business

22

expectancy between plaintiff and a third party; (2) defendant’s knowledge that the

23

contract exists; (3) defendant’s intentional interference with the contract, which causes

24

the third party to breach the contract; (4) defendant acted improperly; and (5) damage

25

resulted to the plaintiff. Bernstein v. Aetna Life & Cas., 843 F.2d 359, 366 (9th Cir. 1988)

26

citing Antwerp Diamond Exch. V. Better Business Bureau of Maricopa County, 130 Ariz.

27

523, 530, 637 P.2d 733, 739-40 (1981) (for the first four elements); Wagenseller v.

28

Scottsdale Memorial Hosp., 147 Ariz. 370, 710 P.2d 1025 (1985).

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1

Plaintiff alleges that the Defendants failed to adhere to University of Arizona

2

policies and as a result they interfered with his contractual relationship with the

3

University of Arizona. Plaintiff concludes without factual support that the Defendants

4

colluded with each other to condone Plaintiff’s termination.

5

Defendants falsified his time records, interfered with his disclosures and denied him

6

confidentiality during his disclosure investigations.

7

Defendants falsified his time records, he does not allege anywhere in his Complaint that

8

the falsification of his time records resulted in his termination.

He alleges that the

While Plaintiff alleges the

9

There is no allegation in his Complaint that Director Husman terminated Plaintiff

10

due to the actions of the other four Defendants. Plaintiff’s Complaint is clear that he was

11

terminated due to his own actions in refusing to discuss his use of overtime with Director

12

Husman. Regardless of whether Plaintiff was entitled to whistleblower protection related

13

to his initial disclosure regarding Director Husman or not, the fact that his plea for

14

whistleblower protection was denied does not establish that the Defendants intentionally

15

interfered with his contract. There is nothing in the Complaint to establish that the

16

Defendants did anything other than act within the scope of their authority in assessing

17

Plaintiff’s disclosures and making a determination that the Defendant disagreed with.

18

Since the Defendants are all employees of the University of Arizona and according

19

to the Complaint were acting within the scope of their authority in assessing Plaintiff’s

20

disclosures, Defendants cannot be liable for interfering with Plaintiff’s contractual

21

relationship. See Barrow v. Ariz. Bd. of Regents, 158 Ariz. 71, 78, 761 (Ariz, Ct. of App.

22

1988) (an individual defendant that acts within the scope of his authority for Defendant’s

23

employer, could not interfere with their own contract).

24

As drafted, Plaintiff has failed to sufficiently plead a claim of tortious interference

25

with a contractual relationship. However, since Plaintiff may be able to sufficiently

26

amend his Complaint, the Court will grant Plaintiff leave to amend.

27
28

Leave to Amend

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1

Within 30 days, Plaintiff may submit a first amended complaint consistent with

2

the terms of this Order. Plaintiff must clearly designate on the face of the document that

3

it is the AFirst Amended Complaint.@ The first amended complaint must be retyped or

4

rewritten in its entirety and may not incorporate any part of the original Complaint by

5

reference. Additionally Plaintiff’s complaint must contain a "short and plain statement of

6

the claim showing that the pleader is entitled to relief[.]" Rule 8(a), Fed. R. Civ. P.

7

Plaintiff’s initial Complaint contained numbered sections. However, the sentences

8

are disjointed, which makes it difficult to read and each section contains multiple

9

allegations. Plaintiff’s first amended complaint must set forth all his claims in numbered

10
11
12
13
14
15
16
17
18
19
20
21
22
23

paragraphs that should be limited to a single set of circumstances. Fed. R. Civ. P. 10(b).
"Each claim . . . shall be stated in a separate count . . . whenever a separation facilitates
the clear presentation of the matters set forth." Id.

Failure to set forth claims in such

a manner places the onus on the court to decipher which, if any, facts support which
claims, as well as to determine whether a plaintiff is entitled to the relief sought. Haynes
v. Anderson & Strudwick, Inc., 508 F.Supp. 1303 (D.C.Va. 1981). Enforcement of this
rule is discretionary with the Court, but such enforcement is appropriate where it is
necessary to facilitate a clear presentation of the claims. See, Benoit v. Ocwen Financial
Corp., Inc., 960 F.Supp. 287 (S.D.Fla. 1997), affirmed 162 F.3d 1177 (compliance with
rule required where allegations were so confusing and conclusory, claims were
commingled, and impossible to determine nature of claims).
Further, Plaintiff is reminded that conclusory allegations are not facts and he must
plead actual facts that raise his right to relief above the speculative level. Papasan v.

24

Allain, 478 U.S. 265, 286 (1986). Additionally, Plaintiff must allege that he suffered a

25

specific injury as a result of the conduct of a particular defendant and he must allege an

26

affirmative link between the injury and the conduct of that defendant. Rizzo v. Goode,

27

423 U.S. 362, 371-372, 377 (1976).

28

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1

Finally, Plaintiff is reminded that a first amended complaint supersedes the

2

original complaint. Ferdik v. Bonzelet, 963 F.2d 1258, 1262 (9th Cir. 1992); Hal Roach

3

Studios v. Richard Feiner & Co., 896 F.2d 1542, 1546 (9th Cir. 1990).

4

amendment, the Court will treat his original complaint as nonexistent. Ferdik, 963 F.2d

5

at 1262. Any cause of action that was raised in the original complaint is waived if it is

6

not raised in a first amended complaint. King v. Atiyeh, 814 F.2d 565, 567 (9th Cir.

7

1987).

8

Summary Judgment Motion and Motion for Judgment on the Pleadings

After

9

On February 19, 2013, Plaintiff filed a Motion for Summary Judgment on Counts

10

One, Two, Six and Seven. (Doc. 15). Then, on May 14, 2013, Plaintiff filed a Motion

11

for Judgment on the Pleadings. (Doc. 18). However, in light of the Court’s dismissal of

12

Plaintiff’s Complaint with leave to amend, his Motion for Summary Judgment and his

13

Motion for Judgment on the Pleadings are denied.

14

Accordingly, IT IS ORDERED:

15

1.

16
17
18
19
20
21
22
23
24
25
26
27

The Report and Recommendation, (Doc. 22), is ADOPTED IN PART,

MODIFIED IN PART, and REJECTED IN PART.
2.

Defendants’ Motion to Dismiss, (Doc. 3) is GRANTED IN PART and

DENIED IN PART.
3.

Defendant Arizona Board of Regents is dismissed from the federal claims,

Counts Two, Three, Four, and Five of Plaintiff’s Complaint, with prejudice.
4.

Plaintiff’s Complaint is dismissed for failure to state a claim. Plaintiff is

granted leave to file a First Amended Complaint on or before October 24, 2013 consistent
with the terms of this Order.
5.

If Plaintiff fails to file a First Amended Complaint on or before October 24,

2013, the Clerk of Court must, without further notice, enter a judgment dismissing this
case with prejudice.

28

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1
2
3
4
5

6.

Plaintiff’s Motion for Summary Judgment, (Doc. 15), is DENIED AS

MOOT.
7.

Plaintiff’s Motion for Judgment on the Pleadings, (Doc. 18), is DENIED

AS MOOT.
Dated this 24th day of September, 2013.

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