Haynes v. Home Depot U.S.A., Inc. et al

Filing 95

ORDER Re Defendant's Renewed Motion for Summary Judgment as to Punitive Damages. Signed by Judge Cathy Ann Bencivengo on 11/23/2020. (anh)

Case 3:15-cv-01038-CAB-JLB Document 95 Filed 11/23/20 PageID.2629 Page 1 of 11

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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CARL HAYNES,

Case No.: 15-CV-1038-CAB-JLB
Plaintiff,

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ORDER RE DEFENDANT’S
RENEWED MOTION FOR
SUMMARY JUDGMENT AS TO
PUNITIVE DAMAGES

v.
HOME DEPOT U.S.A., INC.,
Defendant.

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This matter is before the Court on Defendant’s renewed motion for summary

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judgment as to punitive damages. The motion is fully briefed, and the Court deems it

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suitable for submission without oral argument. For the reasons set forth below, the motion

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is granted.

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I.

BACKGROUND

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Plaintiff Carl Haynes (“Plaintiff”) worked as an Assistant Store Manager (“ASM”)

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for Defendant Home Depot U.S.A., Inc. (“Defendant” or “Home Depot”) from 1987 until

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his termination in 2013. [Doc. No. 33-6 at p. 4.] The underlying facts of Plaintiff’s

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employment experience with Home Depot are described in the Court’s order on Home

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Depot’s first motion for summary judgment, dated May 6, 2016. [Doc. No. 45.]

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On February 13, 2015, Plaintiff filed a complaint against Home Depot in state court.

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Home Depot removed the matter to this Court on May 8, 2015, based on diversity
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jurisdiction. Shortly thereafter, Plaintiff filed a first amended complaint (the “FAC”),

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which is the operative complaint in this matter, asserting twelve claims against Home

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Depot arising out of Plaintiff’s employment with and termination by Home Depot. [Doc.

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No. 5.] On May 6, 2016, the Court granted Home Depot’s motion for summary judgment

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(“MSJ”) as to all twelve of Plaintiff’s causes of action alleged in the FAC. [Doc. No. 45.]

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On June 22, 2016, Plaintiff filed an Amended Notice of Appeal regarding the Court’s

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orders granting summary judgment and sanctioning Plaintiff’s attorneys. [Doc. No. 68.]

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On January 22, 2020, the Ninth Circuit Court of Appeals affirmed in part and reversed in

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part the Court’s orders and remanded for further proceedings. [Doc. No. 81.] The four

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causes of action remaining before this Court from Plaintiff’s FAC are: (1) Plaintiff’s fifth

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cause of action claiming wages under the California labor code; (2) Plaintiff’s sixth cause

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of action for wrongful termination; (3) Plaintiff’s ninth cause of action for age

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discrimination; and (4) Plaintiff’s tenth cause of action for wrongful termination in

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violation of public policy. [Doc. No. 5.]

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Defendant now brings this renewed motion for summary judgment on Plaintiff’s

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claim for punitive damages, arising out of his claims of wrongful termination (sixth cause

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of action), age discrimination (ninth cause of action), and wrongful termination in violation

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of public policy (tenth cause of action) as alleged in the FAC. [Id.] Defendant’s motion is

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now fully briefed and ripe for resolution.

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II.

LEGAL STANDARD
A. Summary Judgment

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Federal Rule of Civil Procedure 56(c)(1)(A) provides that “a party may move for

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summary judgment at any time until 30 days after the close of discovery.” “A party

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opposing the motion must file a response within 21 days after the motion is served or a

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responsive pleading is due, whichever is later.” FED. R. CIV. P. 56(c)(1)(B).

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A party is entitled to summary judgment “if the pleadings, depositions, answers to

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interrogatories, and admissions on file, together with the affidavits, if any, show that there

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is no genuine issue as to any material fact and that the moving party is entitled to a judgment
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as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). To avoid summary

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judgment, disputes must be both 1) material, meaning concerning facts that are relevant

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and necessary and that might affect the outcome of the action under governing law, and 2)

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genuine, meaning the evidence must be such that a reasonable jury could return a verdict

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for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Cline

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v. Indus. Maint. Eng’g & Contracting Co., 200 F.3d 1223, 1229 (9th Cir. 2000).

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The moving party bears the initial burden of establishing the basis for its motion by

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“identifying those portions of the pleadings, depositions, answers to interrogatories, and

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admissions on file, together with the affidavits, if any, which it believes demonstrate the

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absence of a genuine issue of material fact.” See Celotex Corp., 477 U.S. at 323 (internal

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quotations omitted). If the moving party can demonstrate that its opponent has not made a

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sufficient showing on an essential element of his case, the burden shifts to the opposing

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party to set forth facts showing that a genuine issue of disputed fact remains. Id. at 324.

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When ruling on a summary judgment motion, the court must view all inferences drawn

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from the underlying facts in the light most favorable to the nonmoving party. Matsushita

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Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). However, “[t]he district

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court need not examine the entire file for evidence establishing a genuine issue of fact,

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where the evidence is not set forth in the opposing papers with adequate references so that

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it could conveniently be found.” Carmen v. San Francisco Unified Sch. Dist., 237 F.3d

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1026, 1031 (9th Cir. 2001).

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III.

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Home Depot moves for summary judgment on Plaintiff’s request for punitive

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damages. Because all of Plaintiff's remaining causes of action are based on state statutes

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and/or doctrines, the availability of punitive damages here is a question of state law. Cent.

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Off. Tel. v. AT&T Co., 108 F.3d 981, 993 (9th Cir. 1997), rev'd on other grounds, 524 U.S.

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214, 228 (1998). In California, a plaintiff may recover punitive damages in addition to

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actual damages from a defendant when the plaintiff proves by clear and convincing

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evidence that the defendant has been guilty of oppression, fraud, or malice. CAL. CIV.

ANALYSIS

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CODE § 3294(a). When a plaintiff sues an employer for punitive damages based on the

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tortious acts of an employee, the employer may be statutorily liable in three situations: “(1)

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when an employee was guilty of oppression, fraud or malice, and the employer with

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advance knowledge of the unfitness of the employee employed him or her with a conscious

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disregard of the rights or safety of others, (2) when an employee was guilty of oppression,

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fraud or malice, and the employer authorized or ratified the wrongful conduct, or (3) when

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the employer was itself guilty of the oppression, fraud or malice.” Weeks v. Baker &

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McKenzie, 74 Cal. Rptr. 2d 510, 524 (1998). In the case of a corporate employer, “the

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advance knowledge and conscious disregard, authorization, ratification or act of

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oppression, fraud, or malice must be on the part of an officer, director, or managing agent

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of the corporation.” CAL. CIV. CODE § 3294(b). By confining an employer’s liability to

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the acts of its corporate leaders, or “the group whose intentions guide corporate conduct,”

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California law “avoids punishing the corporation for malice of low-level employees which

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does not reflect the corporate ‘state of mind’ or the intentions of the corporate leaders.”

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Cruz v. HomeBase, 99 Cal. Rptr. 2d 435, 439 (2000).

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Home Depot, a corporate employer, is the sole defendant named in this case.

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Plaintiff alleges that he was wrongfully terminated and discriminated against by two Home

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Depot employees: store manager Chris Collins (“Collins”) and district manager Jeff

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Grooms (“Grooms”). [Doc. No. 5 at pp. 29-30, 34-37.] Collins and Grooms are the only

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Home Depot employees alleged by Plaintiff to have committed any wrongdoing.

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Accordingly, in order to recover punitive damages from Home Depot for the allegedly

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tortious acts of its employees under section 3294(b), Plaintiff must show by clear and

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convincing evidence that either Collins or Grooms was an “officer, director, or managing

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agent” of Home Depot.

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Collins was the store manager for Home Depot Store Number 673 in Santee (“the

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Santee store”), and was Plaintiff’s direct supervisor, from approximately June 2010

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through Plaintiff’s termination in February 2013. [Doc. No. 91-4 ¶ 3.] Grooms was the

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district manager of District 199 in Home Depot’s Pacific South Region, which includes the
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Santee store, from approximately March 2011 through Plaintiff’s termination. [Doc. No.

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91-3 ¶ 2.] Home Depot states that it is undisputed that Collins and Grooms are neither

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officers nor directors of Home Depot. [Doc. No. 91-1 at p. 17.] Despite Plaintiff’s

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conclusory statement that this is a misrepresentation [Doc. No. 93 at p. 7], Plaintiff does

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not actually claim that either Collins or Grooms are officers or directors of Home Depot.

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Instead, Plaintiff argues that Collins and Grooms were “managing agents,” and thus Home

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Depot should be held liable for their wrongdoing. [Id. at p. 12.] In sum, the pleadings filed

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by both parties indicate that neither Collins nor Grooms was an officer or director of the

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defendant corporation, and Plaintiff has not shown any genuine dispute of fact as to

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whether they were officers or directors. Accordingly, the Court focuses its analysis on

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whether a genuine dispute of fact exists as to Collins and Grooms’ status as “managing

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agents” of Home Depot.

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A. Neither Collins nor Grooms Were Managing Agents of Home Depot

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The Supreme Court of California defines managing agents as corporate employees

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who “exercise substantial independent authority and judgment in their corporate

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decisionmaking so that their decisions ultimately determine corporate policy.” White v.

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Ultramar, Inc., 21 Cal. 4th 563, 566-67 (1999). Thus, under section 3294(b), a plaintiff

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seeking punitive damages “would have to show that the employee exercised substantial

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discretionary authority over significant aspects of a corporation’s business.” Id. at 577. A

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determination of whether employees are managing agents “does not necessarily hinge on

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their ‘level’ in the corporate hierarchy . . . rather, the critical inquiry is the degree of

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discretion the employees possess in making decisions that will ultimately determine

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corporate policy.” Pulte Home Corp. v. Am. Safety Indem. Co., 223 Cal. Rptr. 3d 47, 79

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(2017) (quoting Kelly-Zurian v. Wohl Shoe Co., 27 Cal. Rptr. 2d 457, 470 (1994)). In this

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context, “corporate policy” refers to “formal policies that affect a substantial portion of the

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company and that are the type likely to come to the attention of corporate leadership.”

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Roby v. McKesson Corp., 47 Cal. 4th 686, 714 (2009); see also Cruz, 99 Cal. Rptr. 2d at

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440 (explaining that “‘corporate policy’ is the general principles which guide a corporation,
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or rules intended to be followed consistently over time in corporate operations,” and thus

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a managing agent “is one with substantial authority over decisions that set these general

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principles and rules”). “It is this sort of broad authority that justifies punishing an entire

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company for an otherwise isolated act of oppression, fraud, or malice.” Roby, 47 Cal. 4th

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at 714.

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As the moving party, Home Depot has the initial burden of establishing the

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nonexistence of any triable issue of material fact. Davis v. Kiewit Pac. Co., 162 Cal. Rptr.

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3d 805, 813-14 (2013). Along with its motion for summary judgment, Home Depot

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provided declarations from both Collins and Grooms describing their positions,

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employment history and job duties at Home Depot, and attached the job description for

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each of their respective positions. [Doc. No. 91-4 at pp. 8-10; Doc. No. 91-3 at pp. 7-9.]

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In response, Plaintiff attached various excerpts from Grooms’ deposition testimony taken

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in two other cases brought by Plaintiff’s attorneys against Home Depot. [Doc. No. 93-1 at

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pp. 52-92.] Plaintiff did not attach any deposition testimony from Collins, but instead

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referred to the same store manager job description attached by Defendant as evidence of

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Collins’ “managing agent” status. [Doc. No. 93 at p. 21.] Nevertheless, drawing all

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inferences in the light most favorable to Plaintiff, Plaintiff has not set forth facts showing

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that a genuine dispute of material fact exists as to whether Collins or Grooms was a

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managing agent of Home Depot.

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As store manager, Collins was responsible for the complete day to day operation of

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the Santee store. [Doc. No. 91-4 at p. 9.] Collins’ responsibilities included maximizing

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store sales and profitability, developing store strategies and objectives, leading a team of

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associates in executing those strategies and objectives, ensuring adequate stock levels,

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providing excellent customer service, and overseeing personnel issues. [Id.] Plaintiff

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argues that as a store manager, Collins oversaw 200 to 250 employees and had discretion

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in setting policies within the store (including staffing and overtime policies), and therefore

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was a managing agent. [Doc. No. 93 at p. 21.] However, even assuming Collins had

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freewheeling discretion over the Santee store’s policies and practices, the Santee store was
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just one out of over 2,000 Home Depot store locations in North America at the time of

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Plaintiff’s termination. [Doc. No. 91-1 at p. 20.] Plaintiff has not demonstrated that the

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actions taken or decisions made by Collins at the Santee store had any effect on a

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“substantial portion of the company,” or that the policies created by Collins were of “the

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type likely to come to the attention of corporate leadership.” Roby, 47 Cal. 4th at 714. As

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a multinational corporation with thousands of stores, Home Depot’s business could not

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operate without store managers exercising some level of discretion over their stores and

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employees. However, that does not mean individual store managers influence Home Depot

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policy at a company-wide level. Plaintiff also argues that Collins had discretion over

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staffing (i.e., hiring and firing), thereby making him a managing agent. A manager’s ability

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to hire or fire other employees alone does not equate to “managing agent” status as required

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by section 3294(b). See White, 21 Cal. 4th at 575 (“A rule defining managing agent as any

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supervisor who can hire or fire employees, but who does not have substantial authority

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over decisions that ultimately determine corporate policy, effectively allows punitive

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damage liability without proof of anything more than simple tort liability, which we have

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long recognized is insufficient.”). In sum, none of Collins’ discretionary responsibilities

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pointed to by Plaintiff show that Collins had independent authority over Home Depot’s

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corporate policy which would justify punishing the entire corporation for his alleged

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wrongdoing.

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Plaintiff has similarly failed to present a dispute of material fact as to whether

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Grooms was a managing agent of Home Depot. From 2011 through Plaintiff’s termination,

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Grooms worked as the district manager of District 199, which required him to oversee the

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operations of eleven Home Depot stores throughout the Pacific South Region. [Doc. No.

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91-3 at p. 2.] As district manager, Grooms’ responsibilities included “ensur[ing] that

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company standards are uniformly met and adhered to across all stores within [the] assigned

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district,” providing guidance and feedback to store managers based on sales reports and

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profitability, overseeing resource and inventory balancing across stores, and supervising

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staffing decisions. [Id. at p. 8.] Grooms’ position required him to work “in the field”
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surveying stores in his district and assisting store managers with training and development.

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[Id. at p. 3.] By including and bolding portions of Grooms’ deposition testimony (taken in

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two different cases against Home Depot) in his responsive papers, Plaintiff presumably

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argues that Grooms’ job duties qualify him as a managing agent. The deposition excerpts

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included by Plaintiff refer to Grooms’ various responsibilities as a district manager in

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which he exercises some discretion, including personnel management, hiring and firing,

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profit and loss management, and overall store operations. [Doc. No. 93 at pp. 17-21.] This

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testimony is not clear and convincing evidence that Grooms was a managing agent of

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Home Depot. As discussed above, exercising some discretion does not equate to managing

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agent status without additional proof that the employee’s discretion affected widespread

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corporate policy. Plaintiff does not include any additional evidence to show that Grooms

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exercised such discretion.

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Plaintiff also appears to argue that because Grooms managed multiple Home Depot

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stores and had broad authority over their operations, he was a managing agent. However,

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the fact that an employee supervises many employees or store locations does not

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necessarily establish that status. See Muniz v. United Parcel Serv., Inc., 731 F. Supp. 2d

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961, 976 (N.D. Cal. 2010) (finding no triable issue of whether operations manager was a

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managing agent, although he was “in charge of 6 divisions, 23 package centers and

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approximately 40 managers, 150 supervisors and 4,200 employees,” without additional

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evidence that he set corporate policy); Almaweri v. Walgreen Specialty Pharmacy, LLC,

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No. 13-cv-04920-EDL, 2015 WL 349158, at *10-11 (N.D. Cal. Jan. 26, 2015) (finding no

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triable issue of whether district manager was a managing agent, though he supervised

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thirty-three stores in his district and 0.41% of stores nationwide, without evidence that he

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was responsible for a significant aspect of the defendant’s business or made significant

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decisions affecting company policy); Razo v. TIMEC Co., Inc., No. 15-cv-03414-MEJ,

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2017 WL 5079249, at *16-17 (N.D. Cal. Nov. 3, 2017) (finding no triable issue of whether

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a site manager, who oversaw personnel, site profitability and client interactions, was a

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managing agent because he had no role in setting company-wide policies or decision8
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making authority in creating company policy). Solely relying on the number of stores and

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employees managed by Grooms is not enough to show that he had discretionary authority

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over Home Depot’s corporate policy. Unlike in White where the court found a zone

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manager to be a managing agent because the eight stores and sixty-five employees she

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managed were a “significant aspect of [the defendant’s] business,” the eleven Home Depot

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stores managed by Grooms constitute approximately one half of one percent of Home

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Depot’s store locations. See White, 21 Cal. 4th at 577-78; see also Cortez v. Chipotle

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Mexican Grill, Inc., No. CV 17-4787-GW(JPRx), 2018 WL 6071093, at *16 (C.D. Cal.

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Aug. 9, 2018) (“Managing less than one percent of Defendants’ restaurants and supervising

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less than one percent of Defendants’ employees does not evidence ‘substantial

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discretionary authority over significant aspects of a corporation’s business.’” (quoting

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White, 21 Cal. 4th at 577)). For a large multinational corporation like Home Depot, less

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than one percent of its stores can hardly be said to constitute a significant aspect of its

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business. Thus, any evidence of discretion exercised by Grooms that affected operations

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in the eleven stores he managed—including personnel matters, profitability metrics and

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other store performance assessments—is not evidence that his decisions impacted

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corporate policy throughout a “substantial portion” of Home Depot. Roby, 47 Cal. 4th at

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686.

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The district manager job description attached by Home Depot further supports its

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contention that Grooms did not create corporate policy. District managers are expected to

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“ensure that company standards are uniformly met and adhered to across all stores within

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assigned district”—not subjectively set those standards themselves. [Doc. No. 91-3 at p.

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8.] Similarly, in one of the deposition transcripts lodged by Plaintiff, Grooms testified that

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when going through the “discipline process” with an employee, district managers have “a

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policy that we follow, standard operating procedures, and a code of conduct policy that are

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guidelines, and there are normals in there.” [Doc. No. 93-1 at p. 90.] Though district

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managers may consider “extenuating circumstances” of the individual employee, they still

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must abide by Home Depot’s corporate policy. [Id.] Plaintiff has failed to establish that
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Grooms had any discretionary authority over the creation of those policies, or that any

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decisions made by Grooms affected a substantial portion of Home Depot’s business beyond

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the eleven retail locations he managed.

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Finally, Plaintiff argues that even if Collins and Grooms are not managing agents,

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some unidentified officer, director or managing agent of Home Depot knew of Collins and

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Grooms’ allegedly tortious conduct through Home Depot’s Management Incentive

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Program (“MIP”). [Doc. No. 93 at p. 24.] Plaintiff claims that Grooms intentionally

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terminated him before his retirement in order to decrease payroll expenses and increase

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store profitability, thereby increasing Grooms’ bonus paid under the MIP. As proof of his

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theory, Plaintiff cites to a slide deck entitled “Financial Management at The Home Depot”

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that discusses the importance of payroll with regards to store profitability. [Doc. No. 93-1

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at p. 94, pp. 277-89]. However, evidence that payroll is important to store profitability is

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not evidence that Home Depot or its employees oppressively, fraudulently or maliciously

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terminated Plaintiff to save money. Nor does Plaintiff provide the Court with evidence

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that Home Depot authorized or ratified any alleged wrongful conduct or had the advance

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knowledge and conscious disregard required under section 3294(b). Plaintiff’s conclusory

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accusations fall short of the clear and convincing evidence of oppression, fraud or malice

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required to recover punitive damages under California law. See Shade Foods, Inc. v.

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Innovative Prods. Sales & Mktg., Inc., 93 Cal. Rptr. 2d 364, 394 (2000) (describing the

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“clear and convincing” standard as “requiring that the evidence be so clear as to leave no

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substantial doubt; sufficiently strong to command the unhesitating assent of every

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reasonable mind” (internal quotations omitted)).

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The Court concludes that there are no genuine issues of material fact as to Plaintiff’s

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request for punitive damages. Defendant has demonstrated that neither Collins nor Grooms

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was an officer, director, or managing agent of Home Depot, and Plaintiff failed to set forth

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facts showing that a genuine issue of disputed fact remains as to their corporate leadership

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status. See Celotex Corp., 477 U.S. at 324. Plaintiff also failed to identify any other

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corporate leader at Home Depot that exhibited the “advance knowledge and conscious
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disregard, authorization, ratification, or act of oppression, fraud, or malice” required to

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sustain punitive damages under section 3294(b).

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Defendant is entitled to summary judgment on Plaintiff’s request for punitive damages.

Accordingly, the Court finds that

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IV.

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For the reasons set forth above, Defendant’s renewed motion for summary judgment

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CONCLUSION

as to punitive damages [Doc. No. 91] is GRANTED.

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It is SO ORDERED.

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Dated: November 23, 2020

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