Miller v. Delaware Technical & Community College et al

Filing 14

REPORT AND RECOMMENDATIONS recommending GRANTING-IN-PART and DENYING-IN-PART D.I. 4 MOTION to Dismiss Based upon Complaint filed by Robert W. Hearn, Jr., George E. Booth, Kyle L. Serman, H. Allan Schirmer, Delaware Technical & Community Colle ge, Linford P. Faucett, III. Please note that when filing Objections pursuant to Federal Rule of Civil Procedure 72(b)(2), briefing consists solely of the Objections (no longer than ten (10) pages) and the Response to the Objections (no longer than ten (10) pages). No further briefing shall be permitted with respect to objections without leave of the Court. Objections to R&R due by 5/20/2013. Signed by Judge Christopher J. Burke on 5/1/2013. (dlk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
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MICHAEL C. MILLER, SR. d/b/a,
MILLER'S LAWN SERVICE,
Plaintiff,

v.
DELAWARE TECHNICAL &
COMMUNITY COLLEGE, LINFORD
P. FAUCETT, III, GEORGE E.
BOOTH, ROBERT W. HEARN, JR.,
KYLE L. SERMAN, and H. ALLAN
SCHIRMER, each individually and in their
official capacities,
Defendants.

Civ. Action No. 12-216-SLR-CJB

REPORT AND RECOMMENDATION
In this action filed pursuant to 42 U.S.C. §§ 1981 and 1983, Plaintiff Michael C. Miller,
Sr., d/b/a/ Miller's Lawn Service ("Plaintiff'), brought suit against Defendant Delaware
Technical & Community College ("DTCC") and Defendants Linford P. Faucett, III, George E.
Booth, Robert W. Hearn, Jr., Kyle L. Serman, and H. Allan Schirmer, in their individual and
official capacities (collectively, "Individual Defendants"). Presently pending before the Court is
Defendants' motion to dismiss all claims pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6)
("Motion"). (D.I. 4) For the reasons that follow, I recommend that the Motion be GRANTEDIN-PART and DENIED-IN-PART.

I.

BACKGROUND
A.

The Parties

Plaintiff is a Delaware resident and the African-American and Native American Indian

1

owner of a landscaping business. (D.I. 1 at 2,

at~

5) DTCC, established pursuant to Del. Code

tit. 14, § 9102, is an institution of higher education that operates on a few different locations in
Delaware, including the Jack F. Owens Campus ("Owens Campus") in Georgetown, Delaware.
(!d. at ~ 6) Defendant Faucett, a Caucasian male, served at all times relevant to the Complaint as

the Director of Administrative Services at the Owens Campus; he was a member of the fiveperson DTCC panel ("five-person panel") assigned the task of scoring bidders to award the 20102013 landscaping contract for the Owens Campus ("the 2010 Contract"). (!d. at~ 7) 1 Defendant
Booth, a Caucasian male, served at all times relevant to the Complaint as the Assistant Director
of Administrative Services at the Owens Campus, and was a member of the five-person panel.
(!d. at 2-3,

at~

8) Defendant Hearn, a Caucasian male, served at all times relevant to the

Complaint as the Campus Business Manager for the Owens Campus, and was a member of the
five-person panel. (!d. at 3,

at~

9) Defendant Serman, a Caucasian male, served at all times

relevant to the Complaint as the Chair of the Department of Applied Agriculture, was based at
the Owens Campus, and was a member of the five-person panel. (!d.

at~

10) Defendant

Schirmer, a Caucasian male, served at all times relevant to the Complaint as a maintenance
worker at the Owens Campus, and was a member of the five-person panel. (!d. at ~ 11)

B.

Factual Background

In September 2006, Plaintiff submitted a bid for a landscaping contract with DTCC's
Owens Campus for the period of January 2007 through January 2010 (the "2007 Contract"). (!d.

Although Plaintiffs Complaint indicates that the five-person panel undertook the
task of awarding the "2007-20 10 landscaping contract," this is a mistake, as the remainder of the
Complaint makes clear that the five-person panel was responsible for scoring bidders for the
2010-2013 contract, (see D.l. 1 at 8, at~~ 33-46), and Plaintiffs brief confirms this, (D.I. 7 at 2).
2

at 4,

at~~

bids. (!d.

13-14) Six other companies, all of which were owned by Caucasians, also submitted
at~

14) Plaintiff submitted the lowest of the qualified bids. (!d.) However, thereafter

Defendant Faucett claimed that Plaintiff had failed to tum in a required Certified Pesticide
Applicator License, and required the applicants to re-bid for the contract. (!d.

at~

6) Though

Plaintiff contends that he did in fact submit the required license, he participated in the re-bid,
along with nine other companies, all of which were owned by Caucasians. (!d. at ~~ 7-8) Again,
Plaintiffs bid was the lowest, and he was ultimately awarded the 2007 Contract. (!d. at ~~ 9-1 0)
However, despite notifying Plaintiff in November 2006 that he was the winning bidder,
DTCC did not prepare the contract until January 2007, after Plaintiffs attorney had sent DTCC a
letter asking when the contract would be ready. (!d. at 4-5,

at~~

10-11) The prepared contract

included a "permits and licensure" clause. (!d. at 5, at~ 12) DTCC employed Plaintiff under the
contract from January 2007 until January 2010, when the contract expired. (!d.

at~

13) During

this time, Plaintiff performed landscaping duties and ground maintenance for the Owens
Campus, without incident or complaint about his performance. (!d.) In November 2008,
Defendants recommended Plaintiff to Delaware State University ("DSU") for its grounds
keeping needs. (!d. at 8,

at~

31) Defendants also implemented multiple recommendations that

Plaintiff had made during his service to DTCC. (!d.

at~

32)

Though the 2007 Contract was renewable for another two-year period at DTCC's option,
DTCC chose not to renew the contract and to instead re-bid it. (!d. at 5,

at~~

14-15)

Accordingly, in September 2009, DTCC issued Requests for Proposals (the "RFP") for bid for
the 2010 Contract. (!d. at 5,

at~

15) The RFP set forth specific causes that would result in the

disqualification of a bidder and in rejection of the bid proposal, which included the bidder's

3

failure to provide certain required information listed in the RFP at the time of bid submission.
(!d. at 5-6, at ~~ 16-17) The RFP also set out the Safety Requirements and General Conditions to

which the successful bidder must adhere, as well as the pertinent details regarding the work
required to be done under the contract. (!d. at 6,

at~~

18-19) In a change from DTCC's routine

procedures for solicitation of bids, it requested that the submitted bids be sealed rather than open.
(!d. at 7,

at~

22)

In March 2010, Plaintiff submitted his bid proposal of $68,868 per year. (!d.

at~

23) Of

the seven bidders, Plaintiffs company was the only one owned and operated by a non-Caucasian.
(!d.

at~~

24-25) DTCC interviewed three bidders, consisting of Plaintiff, Priority Services, LLC

("Priority") and Outdoor Design Group, LLC ("Outdoor"). (!d.

at~

24) The bid proposals were

reviewed and scored by the five-person panel (on a 100-point scale), based on five criteria listed
in the RFP. (!d. at 8,

at~~

33, 36) On April12, 2010, Plaintiff was notified that the 2010

Contract had not been awarded to him, but instead was awarded to Outdoor, owned by Jeffrey
Thompson, a Caucasian. (!d. at 7,

at~~

26-27)

Plaintiff asked to review the previously sealed bids and scoring. (!d.

at~

28) DTCC

granted the request, and Plaintiff learned that Outdoor's bid was $65,750.00 per year, which was
lower than Plaintiffs bid by just over $3,000. (!d.

at~~

28-29) Plaintiffs bid was the second

lowest, with all of the other companies' bids coming in at over $80,000 per year. (!d.

at~

29)

Plaintiff alleges that DTCC ultimately paid Outdoor not only more than the amount that Outdoor
had bid, but more than even the amount of Plaintiffs bid. (!d. at 7-8,

at~

30)

Plaintiff further alleges that, in reviewing the score sheets, he discovered a number of
contradictions and inconsistencies in scoring. (!d. at 8-11,

4

at~~

33-46) For example, Defendant

Schirmer gave Plaintiff and Priority the same score (a 45) for the "Price" category, even though
Priority's bid was over $13,000 higher than Plaintiffs bid. (!d. at 7,

at~~

23, 29; id. at 9,

at~

37)

As another example, several Individual Defendants gave Outdoor and Priority higher scores than
Plaintiff in the "Capacity to Meet Requirements" category despite the fact that Plaintiff had
successfully met the requirements of the 2007 Contract. (!d. at 9,

at~~

39-43) Plaintiff alleges

that had the scoring been consistent across bidders, Plaintiff would have received a higher rating
than Outdoor. (!d. at 11,

at~

46)

Moreover, Plaintiff alleges that the bidding information he reviewed showed that Outdoor
failed to meet a number of requirements which should have resulted in it being disqualified from
the bidding process. (!d. at 11-13,

at~~

47-56) These issues included a problem with Outdoor's

listed address and phone number, as well as its failure to provide appropriate certifications, proof
of necessary insurance coverage, and licenses. (!d.) Outdoor was not disqualified for such
deficiencies, and was awarded the contract in spite of them. (!d. at 13,

at~

56) Outdoor obtained

and signed its contract within a week of being selected by Defendants (unlike Plaintiff, who had
previously received a contract only after his lawyer issued a demand letter to DTCC). (!d. at ~~
57-58) Outdoor's contract did not include the "permits and licensure" clause that Plaintiffs
contract had contained. (!d.

C.

at~

58)

Procedural Background

On February 22, 2012, Plaintiff filed a two-count Complaint against DTCC and the
Individual Defendants. (D.I. 1) Plaintiff alleges that racial discrimination was the reason that his
2007 Contract with DTCC for landscaping services was not renewed, and the reason that
Defendants selected a different landscaping company for the 2010 Contract. (!d. at 1, at ~ 1; id.

5

at 3,

at~

12; id. at 14-16,

at~~

67-83) Plaintiff alleges that this conduct violated the Equal

Protection Clause of the Fourteenth Amendment2 and asserts claims pursuant to 42 U.S.C. §§
1981 and 1983. (/d. at 14-16,

at~~

67-83) Plaintiff seeks declaratory, monetary, and injunctive

relief for the alleged wrongdoing. (!d. at 16-17)
On April20, 2012, in lieu of answering, Defendants filed the instant Motion, pursuant to
Federal Rules of Civil Procedure 12(b)(1)3 and 12(b)(6). (D.I. 4) On May 3, 2012, this case was
referred to the Court by Judge Sue L. Robinson to "conduct all proceedings, including alternative
dispute resolution; hear and determine all motions, through and including the pretrial
conference." (D.I. 6) Defendants' motion was fully briefed as of May 14, 2012, (D.I. 8), and on
July 16, 2012, the Court heard oral argument regarding the motion.
II.

STANDARD OF REVIEW
A.

Rule 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) authorizes dismissal of a complaint for lack of
subject matter jurisdiction. "Under Rule 12(b)(1), the court's jurisdiction may be challenged
either facially (based on the legal sufficiency of the claim) or factually (based on the sufficiency
of jurisdictional fact)." Kuhn Constr. Co. v. Diamond State Port Corp., Civ. No. 10-637-SLR,
2011 WL 1576691, at *2 (D. Del. Apr. 26, 2011). Normally, once a challenge to subject matter
jurisdiction is made, the plaintiff bears the burden of establishing that it exists. !d. (citing Carpet

2

Plaintiff's Complaint only refers generally to the Fourteenth Amendment, (D.I. 1
at 1-2, ~~ 2-3; id. at 16, at~ 83), but Plaintiff represented in his brief on this Motion that his
claim is with respect to the Equal Protection Clause specifically, (D.I. 7 at 14-15).
With respect to the portions of the Motion that appear to be based upon Rule
12(b)(1), Defendants argue that the Eleventh Amendment of the U.S. Constitution bars claims
against (1) DTCC and (2) the Individual Defendants in their official capacities.
6

Grp. Int'l v. Oriental Rug Importers Ass 'n, Inc., 227 F.3d 62, 69 (3d Cir. 2000)). "In reviewing a
facial attack, the court must only consider the allegations of the complaint and documents
referenced therein and attached thereto, in the light most favorable to the plaintiff." Gould Elecs.

Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000); see also Kuhn, 2011 WL 1576691, at *2.
Dismissals on this basis are only proper "where the alleged claim under the Constitution or
federal statutes clearly appears to be immaterial and made solely for the purpose of obtaining
jurisdiction or where such a claim is wholly insubstantial and frivolous." Bell v. Hood, 327 U.S.
678, 682-83 (1946); see also Kuhn, 2011 WL 1576691, at *2. On the other hand, "[i]n reviewing
a factual challenge to the Court's subject matter jurisdiction, the Court is not confined to the
allegations of the complaint, and the presumption of truthfulness does not attach to the
allegations in the Complaint." Shahin v. Delaware Dept. of Fin., Civ. No. 10-188-LPS, 2012
WL 1133730, at *3 (D. Del. Mar. 30, 2012) (citing Mortensen v. First Fed. Sav. and Loan Ass 'n,
549 F.2d 884, 891 (3d Cir. 1977)). "Instead, the Court may consider evidence outside the
pleadings, including affidavits, depositions and testimony, to resolve any factual issues bearing
on jurisdiction." Shahin, 2012 WL 1133730, at *3 (citing Gotha v. United States, 115 F.3d 176,
179 (3d Cir. 1997)); see also Kuhn, 2011 WL 1576691, at *3.

B.

Rule 12(b)(6)

The sufficiency of pleadings for non-fraud cases is governed by Federal Rule of Civil
Procedure 8, which requires "a short and plain statement of the claim showing that the pleader is
entitled to relief." Fed. R. Civ. P. 8(a)(2). When presented with a Rule 12(b)(6) motion to
dismiss for failure to state a claim, the Court conducts a two-part analysis. Fowler v. UP MC

Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). First, the Court separates the factual and legal

7

elements of a claim, accepting "all of the complaint's well-pleaded facts as true, but
[disregarding] any legal conclusions." !d. at 210-11. Second, the Court determines "whether the
facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for
relief."' !d. at 211 (quoting Ashcroft v. Iqbal, 129 S.Ct 1937, 1950 (2009)). Thus, although a
non-fraud claim need not be pled with particularity or specificity, that claim must "give the
defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell At!.

Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks and citation omitted).
Determining whether a claim is plausible is "a context-specific task that requires the
reviewing court to draw on its judicial experience and common sense." Ashcroft v. Iqbal, 556
U.S. 662, 679 (2009). A plausible claim does more than merely allege entitlement to relief; it
must also demonstrate the basis for that "entitlement with its facts." Fowler, 578 F.3d at 211
(citation omitted). Thus, a claimant's "obligation to provide the 'grounds' of his 'entitle[ment]
to relief requires more than labels and conclusions, and a formulaic recitation of the elements of
a cause of action will not do." Twombly, 550 U.S. at 555; accord Iqbal, 556 U.S. at 678
("Threadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice."). In other words, "[a] claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged." !d. (citing Twombly, 550 U.S. at 556). In assessing the
plausibility of a claim, the court must "construe the complaint in the light most favorable to the
plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may
be entitled to relief." Fowler, 578 F.3d at 210 (citing Phillips v. Cnty. ofAllegheny, 515 F.3d
224, 233 (3d Cir. 2008)).

8

III.

DISCUSSION
Defendants argue that Plaintiffs Complaint fails to state a claim for the following

reasons: (1) the Eleventh Amendment of the United States Constitution immunizes DTCC and
the Individual Defendants in their official capacities from liability; (2) Plaintiff has failed to
plead sufficient facts to identify a plausible claim for relief; and (3) the doctrine of qualified
immunity applies to protect the Individual Defendants from liability. (D.I. 5) The Court will
address each of these arguments in tum.

A.

Eleventh Amendment Immunity

Defendants' first argument is that Plaintiffs claims against DTCC and the Individual
Defendants in their official capacity should be dismissed for lack of subject matter jurisdiction,
because DTCC is an arm of the state that is entitled to sovereign immunity pursuant to the
Eleventh Amendment (and the Individual Defendants are thus state officials who are also
immunized from liability for official capacity claims). (D.I. 5 at 6; D.I. 8 at 1-6) Plaintiff
disputes that DTCC is an arm of the state that is afforded the protection of Eleventh Amendment
immunity. (D.I. 7 at 5-9) Therefore, the Court must "analyz[e] the relationship between [DTCC]
and the State, to determine whether there is such an identity of interest between the two that the
suit against [DTCC] is in fact one against the State." Hanshaw v. Delaware Technical & Cmty.
Col!., 405 F. Supp. 292, 300 (D. Del. 1975).
The Eleventh Amendment provides:
The Judicial power of the United States shall not be construed to
extend to any suit in law or equity, commenced or prosecuted
against one of the United States by Citizens of another State, or by
Citizens or Subjects of any Foreign State.
U.S. Const. amend. XI. "While the text of the Amendment does not specifically bar lawsuits
9

against a State by its own citizens, the 'ultimate guarantee of the Eleventh Amendment is that
nonconsenting States may not be sued by private individuals in federal courts."' Paoli v.

Delaware, Civil Action No. 06-462 (GMS), 2007 WL 4437219, at *2 (D. Del. Dec. 18, 2007)
(quoting Bd ofTrs. ofUniv. ofAlabama v. Garrett, 531 U.S. 356, 363 (2001)). It is well-settled
that "Eleventh Amendment immunity extends to entities that are considered arms of the state."

Paoli, 2007 WL 4437219, at *4; see also Regents of the Univ. ofCalifornia v. Doe, 519 U.S.
425, 429 (1997). In other words, where the state is essentially the "real party in interest," the
Eleventh Amendment will operate to bar the suit even if the state is not named as a party to the
action. Fitchik v. New Jersey Transit Rail Operations, Inc., 873 F.2d 655, 659 (3d Cir. 1989).
In Fitchik v. New Jersey Transit Rail Operations, Inc., 873 F.2d 655 (3d Cir. 1989), the
United States Court of Appeals for the Third Circuit adopted a three-factor test to determine
whether "a suit against an entity is actually a suit against the state itself," thus implicating
Eleventh Amendment immunity. Fitchik, 873 F.2d at 659. Those factors are: "(1) [w]hether the
money that would pay the judgment would come from the state ... (2) [t]he status of the agency
under state law ... ; and (3) [w]hat degree of autonomy the [entity] has." Id; see also Paoli,
2007 WL 4437219, at *4. All of the factors are to be considered equally, with none of them
having predominant importance. Kuhn, 2011 WL 1576691, at *4 (citing cases). The United
States Supreme Court has instructed, however, that "in close cases, where 'indicators of
immunity point in different directions,' [] the principal rationale behind the Eleventh
Amendment-protection of the sovereignty of states through 'the prevention of federal-court
judgments that must be paid out of a State's treasury,'[]- should 'remain [a court's] prime
guide."' Febres v. Camden Bd ofEduc., 445 F.3d 227,229-30 (3d Cir. 2006) (quoting Hess v.

10

Port Auth. Trans-Hudson Corp., 513 U.S. 30, 47-48, 52 (1994)).
The Third Circuit has recognized that an assertion of Eleventh Amendment immunity
does not implicate subject matter jurisdiction in the ordinary sense. Christy v. Pennsylvania Tpk.

Comm 'n, 54 F.3d 1140, 1146 (3d Cir. 1995). In that regard, Eleventh Amendment immunity is
treated as an affirmative defense, and the party asserting immunity must prove its existence. Id.
With respect to factual questions that arise in that analysis, the party asserting Eleventh
Amendment immunity bears the burden of production and persuasion. Febres, 445 F.3d at 229;

Christy, 54 F .3d at 1146.
The question of whether DTCC is cloaked with Eleventh Amendment immunity has been
presented to this Court in two cases prior to this one. In the first, Hanshaw v. Delaware

Technical & Cmty. Coli., 405 F. Supp. 292 (D. Del. 1975), DTCC moved to dismiss a civil rights
lawsuit filed against it pursuant to the Eleventh Amendment. Hanshaw, 405 F. Supp. at 299-300.
Treating the motion as a motion for summary judgment due to accompanying affidavits, this
Court noted that on "the incomplete record" before it, there was "at the least, a substantial
problem as to whether [DTCC] is a State agency independent of the State for Eleventh
Amendment purposes." Jd. at 295, 300-01. In light of the explicit powers that were enjoyed by
DTCC's Board of Trustees, the Hanshaw Court concluded that "Del Tech is not an alter ego of
the State," and further held that DTCC had not met its burden of proof regarding the issue of
whether ultimate payment for any judgment would come from the State treasury. Id. at 300-01.
Accordingly, the Hanshaw Court held that, on the record before it, the college "ha[ d] not
successfully invoked the Eleventh Amendment as a bar to the monetary damage relief requested
by plaintiffs." !d. at 301.

11

In the second case, Paoli v. Delaware, Civil Action No. 06-462-GMS, 2007 WL
4437219, at *1 (D. Del. Dec. 18, 2007), DTCC had been sued along with the State of Delaware
by a plaintiff alleging violations of certain constitutional rights. The defendants filed a motion
for judgment on the pleadings, with DTCC arguing, inter alia, that the plaintiffs complaint
should be dismissed because it was entitled to sovereign immunity under the Eleventh
Amendment. !d. at * 1, *4. However, DTCC did not address the Fitchik factors in its briefing,
prompting the Paoli Court to conclude that there was insufficient evidence in the record to make
a determination regarding immunity at that early, pre-discovery stage in the proceedings. !d. at

While this Court has issued substantive rulings with respect to the immunity of other
Delaware in-state universities (the University of Delaware and Delaware State University), to
which the parties cite in support of their positions for or against a finding of immunity here, 5 this
Court, as well as the Third Circuit, has found consideration of such rulings to be of minimal
utility when conducting an Eleventh Amendment immunity analysis. Specifically, this Court has

4

Plaintiffs answering brief could be read to suggest that the Paoli Court issued a
substantive ruling with respect to the question ofDTCC's immunity (and that it denied DTCC's
argument in this regard on the merits). (D.I. 7 at 7-8) To the extent that is Plaintiffs suggestion,
the Court does not find it to be a fair reading of Paoli. Rather, on the sparse record before it, the
Paoli Court merely was "unwilling to conclude at [that] time" that DTCC was entitled to
Eleventh Amendment immunity. Paoli, 2007 WL 4437219, at *4 (emphasis added).
(D.I. 7 at 8 n.9 (citing Gordenstein v. Univ. of Del., 381 F. Supp. 718,722 (D.
Del. 1974) and McKay v. Delaware State Univ., No. Civ. A. 99-219-SLR, 2000 WL 1481018 (D.
Del. Sept. 29, 2000)) and D.l. 8 at 2 n.1 0 (citing McKay and Carter v. Del. State Univ., No. Civ.
A. 99-642-GMS, 2002 WL 335309, at *7 (D. Del. Feb. 27, 2002))) In these cases, the Court
held, respectively, that the University of Delaware was not an arm of the State of Delaware for
purposes of the Eleventh Amendment analysis, while Delaware State University was protected by
Eleventh Amendment immunity.
12

found that "[a]nalogies to other institutions of higher learning are of limited value because 'each
state university exists in a unique governmental context, and each must be considered on the
basis of its own peculiar circumstances."' Eaton v. Univ. of Delaware, No. C.A. 00-709-GMS,
2001 WL 863441, at *3 n.6 (D. Del. July 31, 2001) (quoting Kovats v. Rutgers, 822 F.2d 1303,
1312 (3d Cir. 1987). For this reason, though the Court recognizes that there are some similarities
between DTCC and other Delaware in-state educational institutions, the Court will conduct an
independent analysis ofDTCC's status pursuant to the factors set out in Fitchik. 6
1.

Source of Money for a Judgment

The first Fitchik factor-whether the money that would pay the judgment would come
from the state- includes consideration of "whether payment will come from the state's treasury,
whether the [entity] has the money to satisfy the judgment, and whether the sovereign has
immunized itself from responsibility for the [entity's] debts." Fitchik, 873 F.2d at 659. "The
crux of this criterion is whether the state treasury is legally responsible for the payment of a
judgment against the entity." Kuhn, 2011 WL 1576691, at *4 (citations omitted).
DTCC argues that this factor supports a finding of immunity for two reasons. First,
DTCC asserts that it "receives a large portion of its funding from the State." (D.I. 8 at 4) In

6

Plaintiff contends that Defendants failed to timely brief the Fitchik factors since
Defendants' opening brief did not address those factors. (D .I. 7 at 6-7) In response, Defendants
explain that because Plaintiffs Complaint averred that DTCC "is a state agency governed by a
Board of Trustees under 14 Del. C. § 9102," DTCC believed that Plaintiff had conceded that it is
an arm of the state and that a Fitchik analysis was therefore unnecessary. (D.I. 8 at 1 (citing D.I.
1 at 2, at~ 6) (emphasis added)) To the extent that Plaintiff believes that Defendants have
somehow waived their Eleventh Amendment immunity argument for failing to initially address
the Fitchik factors in their opening brief, the Court disagrees, as not only is Defendants'
explanation a logical one, but Defendants both ( 1) asserted immunity pursuant to the Eleventh
Amendment in their opening brief; and (2) specifically addressed the Fitchik factors in their reply
brief.
13

support, DTCC cites to Del. Code tit. 14, § 9108, which requires that the college give a bond
"with good and sufficient security to the State in the sum of $10,000, conditioned for the faithful
application of all the moneys received." (!d.) It also cites to an appropriations bill from the
Delaware House of Representatives, indicating that over $67 million was allocated to DTCC in
fiscal year 2012, which DTCC asserts was more than 50% of its annual budget. (!d.) Because
DTCC also receives funding from other sources including tuition, fees, and sales, it argues that
"it would be increasingly difficult to determine the source of the funds that would satisfy a
judgment." (/d. at 5) Second, DTCC contends that it is unaware of any immunization that
prevents the State from being responsible for DTCC's debts. (/d.)
For its part, Plaintiff argues that this factor weighs against immunity because the
Delaware Code does not authorize payments to DTCC as it does to other state colleges (such as
DSU). (D.I. 7 at 6) Instead, Plaintiff argues, the Code makes DTCC's Board of Trustees (the
"Board") responsible for the institution, its management and control. (/d. (citing Del. Code tit.
14, § 9105(c)))
The first inquiry relevant to this factor is whether payment will come from the state's
treasury. As DTCC itself has conceded, " [a]pplication of the first factor is far more complicated
than one would expect." (D.I. 8 at 2) For example, the fact that DTCC receives a substantial
sum of money from the State in a given fiscal year is not dispositive of the question of whether a
judgment against DTCC would ultimately be paid by the State. Febres, 445 F.3d at 233 ("[T]he
fact that New Jersey is the principal source of the Board's finances does not alone confer
immunity, or even compel a finding that this prong of the analysis favors immunity."). The
reason why such a fact is not afforded conclusive weight as to this factor is that "[t]he magnitude

14

of the State's voluntary contributions does not alter the fact that, once deposited into the entity's
accounts, these funds belong to the entity. [] If subsequently used to pay a judgment, the
judgment has been satisfied with the entity's monies, not the State's." Kuhn, 2011 WL 1576691,
at *5; see also Febres, 445 F.3d at 233-34 (affording no legal consequence to the state's
substantial funding of defendant entity, such that "non-state funds comprise a relatively small
percent of the [defendant entity's] budget," where "[t]he record does not suggest that [the state]
retains ownership or control of the funds appropriated to [the defendant]"). Here, though DTCC
has cited to evidence regarding the State's issuance of money to it, there is no evidence to
suggest that the State continues to exercise control over those funds once they are in DTCC' s
possession, and thus this factor weighs against a finding of immunity.
The second part of the state treasury inquiry is whether the entity has money to satisfy the
judgment. Kuhn, 2011 WL 1576691, at *4. Neither of the parties explicitly addressed this issue
in their briefing, and the lack of record evidence on the point put forth by DTCC redounds in
Plaintiffs favor. Christy, 54 F.3d at 1146 (stating that "the [agency's] failure to provide
pertinent information regarding its ability, or lack thereof, to satisfy a potential judgment against
it simply means that the [agency] has failed to sustain its burden of proof on this important
question").
As to the third part of the inquiry-whether the sovereign has immunized itself from
responsibility for the agency's debts- while states can and do take affirmative steps to expressly
shield themselves from such liability, 7 Delaware has apparently not done so with respect to

7

See e.g., Kuhn, 2011 WL 1576691, at *4 ("[T]he State's potential legal liability
for [the Diamond State Port Corporation's] debts has been disclaimed by statute. See 29 Del. C.
§ 8785 (' [T]he State shall not assume or be deemed to have assumed any debt or liability of
15

DTCC. (D.I. 8 at 5) DTCC suggests that the lack of any statutory immunity should be read as
suggesting that the State is obligated, by default, to pay a judgment. (ld) However, on this
point, Third Circuit case law counsels that the absence of a blanket disclaimer from liability is
not significant; what is significant is whether DTCC has established that the State is "under any
affirmative obligation to pay [DTCC's] unassumed liabilities in the first place." Christy, 54 F.3d
at 114 7. Here, DTCC has made no such showing.
On the record presently before the Court then, DTCC has failed to establish that: (1)
payment for a judgment against DTCC will come from the State's treasury (as opposed to funds
controlled by DTCC itself); (2) DTCC lacks financial resources to satisfy any judgment; and (3)
Delaware would be under any obligation to satisfy any such judgment against DTCC.
Accordingly, the first, important, Fitchik factor weighs against a finding of immunity. See id at
1147-48 (finding that where defendant entity failed to put forth sufficient evidence regarding
these inquiries, "the funding factor, the most important of the three, weighs heavily in support of
the conclusion that the [defendant entity] is not an arm of the Commonwealth of Pennsylvania
and does not enjoy Eleventh Amendment immunity").

2.

DTCC's Status under State Law

The second Fitchik factor involves a determination of the agency's status under state law.
This factor requires the Court to consider "how state law treats the agency generally, whether the

[defendant] as the result of any exercise of power by' defendant). This absence of legal liability
provides a compelling indicator that the state treasury criterion ... weighs against immunity.")
(internal quotation marks and citations omitted); Cooper v. SEPTA, 548 F.3d 296, 304 (3d Cir.
2008) (holding that Pennsylvania's disclaimer of liability for judgments against the debts of
SEPTA, as set out in 74 Pa. Cons. Stat. § 1741 (c), was a key factor that weighed heavily against
a finding of immunity as to the state-treasury prong).
16

entity is separately incorporated, whether the agency can sue or be sued in its own right, and
whether it is immune from state taxation." Fitchik, 873 F.2d at 659.
Plaintiff argues that DTCC, through its Board, has the power under State law to acquire,
own, lease, use and operate property, to enter into contracts, and to accept money or property.
(D.I. 7 at 6 (citing Del. Code tit. 14, §§ 9105(d)(l0)-(12))) Plaintiff notes that these powers were
deemed important in Riley v. Delaware River and Bay Auth., 457 F. Supp. 2d 505 (D. Del. 2006),
when analyzing Fitchik' s second prong, and that the Court should take them into account here as
well. (D .I. 7 at 6-7)
In support of its contrary position that State law treats DTCC as a state agency,
Defendants point to: (1) DTCC's enabling statute, which refers to DTCC as a "state agency,"
Del. Code tit. 14, § 91 02; (2) DTCC's inclusion on Delaware's Departmental List of State
Agencies; (3) the fact that DTCC's employees are considered State employees; and (4) the
Superior Court of Delaware has issued opinions noting that DTCC's employees are State
employees, that the college's land is State owned, and that the college falls within the State's
Administrative Procedures Act. 8 (D.I. 8 at 5) Defendants assert that these facts distinguish this
case from the facts at issue in Riley. (!d.)
In Riley, the Court considered whether the Delaware River and Bay Authority (the
"DRBA"), an entity created by a compact between Delaware and New Jersey, was entitled to
sovereign immunity. Riley, 457 F. Supp. 2d at 513-14. The Court found that there were a

The cases Defendants point to in this regard include Garrett v. State, No. 07 A-04004 (JTV), 2008 WL 4152743 (Del. Super. Ct. Aug. 29, 2008), which considers a worker's
compensation benefits appeal, and Sinha v. Bd. ofTr. of Del. Technical & Cmty. Col!., 585 A.2d
1310 (Del. Super. Ct. 1990), which considers a breach of contract claim filed against DTCC by a
terminated employee.
17

number of facts that could support a finding in either party's favor as to Fitchik's second prong.

!d. Weighing these competing facts relating to DRBA's status, the Court concluded that "[o]n
balance ... the DRBA cannot be said to be the creature of either state. It arises from a compact
between two sovereigns and is synonymous with neither." !d. at 514. The Court reads the
holding in Riley as being ultimately dependent more upon the unique circumstances surrounding
the DRBA's creation than upon any other particular right or restriction asserted by State law.
That is, faced with factors that could support a finding for either side as to Fitchik' s second
prong, the Riley Court was ultimately persuaded by the fact that neither of the two states involved
in the DRBA's creation really intended for it to be "an arm" of one state or another.
However, Riley and other cases from this Court, such as Kuhn Constr. Co. v. Diamond

State Port Corp., Civ. No. 10-637-SLR, 2011 WL 1576691 (D. Del. Apr. 26, 2011), can be
helpful guides in understanding what a court should consider when examining the first factor
under Fitchik's second prong: "how state law treats the agency generally." Fitchik, 873 F.2d at
659. These cases take into account facts including some cited by the parties here, including
whether the entity: (1) is subject to the Delaware Administrative Procedures Act; (2) is listed as
a state agency on Delaware's departmental list of state agencies; and (3) has its employees treated
as state employees. Kuhn, 2011 WL 1576691, at *5. Some of these facts weigh in favor of
immunity in this case, including DTCC's listing as a state agency on Delaware's departmental
list of such agencies (D.I. 8 at 5 n.25), and the fact that state law appears to treat DTCC's
employees as state employees (id. at 5 n.26), and refers to DTCC as a "state agency", Del. Code
tit. 14, § 9102. At least one appears to weigh against immunity-as although DTCC asserts that
case law suggests that "the College falls within the Administrative Procedures Act," the case it

18

cites in support of that proposition, Sinha v. Bd. ofTr. of Del. Tech. & Cmty. Col!., 585 A.2d
1310 (Del. Super. Ct. 1990), appears to stand for the opposite proposition. See Sinha, 585 A.2d
at 1311 (stating that "the number of agencies controlled by the Act has grown from nineteen to
thirty-four" but "Del Tech is not included" on that list of agencies) (emphasis added); (D.I. 8 at 5
n.28). 9
The Court next looks to the other three factors that are specifically called out for
consideration as to Fitchik's second prong. As to "whether the entity is separately incorporated,"
the parties do not address this issue in their briefing. With regard to "whether the [entity] can sue
or be sued in its own right," it is clear that DTCC can independently sue and be sued, pursuant to
State law, which weighs against a finding of immunity. Del. Code tit. 14, § 9105(d)(4). And as
to whether DTCC "is immune from state taxation", the parties also fail to take up this point.
Ultimately, the factors for determining DTCC's status under state law do not all point
clearly in one direction. However, of those that are before the Court with sufficiently clarity,
they weigh slightly in favor of a finding of immunity as to the second Fitchik prong.

9

As for other factors cited by the parties, DTCC asserted that the opinion in
Garrett v. State, No. 07 A-04-004, 2008 WL 4152743 (Del. Super. Ct. Aug. 29, 2008) stands for
the proposition that "the College's employees are State employees and the College's land is State
owned." (D.I. 8 at 5 & n.27) The case does make reference to the fact that DTCC's parking lot
was (at least at the time) "state owned," though it says nothing about the former question, as the
employee in that case was employed by Delaware's Department of Children, Youth and their
Families, not by DTCC. 2008 WL 4152743, at *1-3. For its part, Plaintiff, as noted above, cites
to a number of factors considered in Riley as to Fitchik's second prong. These include DTCC's
statutory authority to purchase and lease property, enter into contracts, and borrow money
without the State's approval. (D.I. 7 at 6-7) However, as these facts tend to relate to the issue of
DTCC's autonomy, the Court finds that they are best considered as to Fitchik's third prong,
which speaks directly to that issue, in order to avoid double-counting. In Kuhn, this Court took
these factors into account as to Fitchik's third prong, 2011 WL 1576691, at *6, and the Court
will do so here as well.
19

3.

DTCC's Autonomy

The third and final Fitchik factor requires the Court to determine what degree of
autonomy the agency has. Fitchik, 873 F .2d at 659. Defendants argue that DTCC lacks
autonomy because the Board is appointed by the Governor, and because the General Assembly
has created certain obligations by statute that DTCC must honor (in that, for example, it requires
the college to give aid to needy students and establishes a pay-scale offered to employees). (D.I.
8 at 5-6 (citing Del. Code tit. 14, §§ 9103, 9109, 9219))
Here, the Court again finds instructive this Court's observations in Kuhn, where the
parties made similar arguments regarding whether defendant Diamond State Port Corporation
("DSPC") was autonomous from the State of Delaware. The Kuhn Court pointed to a number of
factors suggesting the defendant's autonomy from the State, including its ability to freely adopt
its own by-laws, engage personnel, enter into contracts in its own name, borrow funds in its own
name and purchase and develop property. 2011 WL 1576691, at *6. Defendant DSPC, on the
other hand, had argued that several facts supported the conclusion that it lacked autonomy,
including that it was solely owned by the Delaware Department of State, that its board of
directors was controlled both in composition and method of appointment by the State, and that
approval of the General Assembly was required to amend its certificate of incorporation, effect a
merger or dissolution or sale of assets. Id The Kuhn Court concluded that, while the defendant
could not be called "highly autonomous," the State did not exercise the level of control over it
necessary for immunity. Id
By way of comparison, the Kuhn Court cited Fitchik and Feb res v. Camden Bd of Educ.,
455 F.3d 229 (3d Cir. 2006), two cases where, as here, there was significant gubernatorial control

20

over the entity's board of directors, but the entity at issue also exercised significant autonomy in
its day-to-day operations. See Fitchik, 873 F.2d at 663-64; Febres, 445 F.3d at 231. The Kuhn
Court noted that in both cases, the Third Circuit had found the Governor's veto power over the
respective boards' actions to be important to its conclusion that this factor counseled slightly in
favor of according immunity. 2011 WL 1576691, at *6 (citing Fitchik, 873 F.2d at 664 and
Febres, 445 F.3d at 231). Finding that the circumstances of the case before it, where DSPC was
not subject to such restrictions, were "notably distinguishable from those in which entities have
been accorded immunity," the Kuhn Court held that the third factor weighed against a finding of
immunity. 2011 WL 1576691, at *6.
The Court finds the Kuhn Court's analysis of the third Fitchik factor particularly helpful
here. It is true that the composition of DTCC' s Board is controlled by the Governor, but that
fact, while not insignificant, has been found to weigh "only slightly in favor of immunity" by the
Third Circuit. Febres, 445 F.3d at 231 (internal quotation marks and citation omitted). And
State law does provide certain broad financial constraints under which DTCC must function. On
the other hand, as Plaintiff points out, DTCC has the ability to act independently in many
ways-for example, to contract, buy and sell land, to borrow money in its own name, to hire
employees and fix their salaries and terms of employment, to make its own rules and
regulations-without threat of veto by the Governor or without the need to seek prior approval of
the legislature. Del. Code tit. 14, § 9105. The ability to freely exercise such powers is
significant in the autonomy analysis. Kuhn, 2011 WL 1576691, at *6; see also Kovats v.
Rutgers, The State Univ., 822 F.2d 1303, 1311 (3d Cir. 1987) (concluding that Rutgers
University was "largely autonomous," where although certain members of its governing bodies

21

were appointed by the governor, in running the university, those members were given a "high
degree of self government", even where state law required the members to direct expenditures in
accordance with certain financial and spending constraints) (internal quotation marks and citation
omitted) (cited in Kuhn, 2011 WL 1576691, at *6).
Ultimately, in light of the facts discussed above, and the reasoning set out in Kuhn and
the Third Circuit cases cited therein, the Court finds that the third Fitchik factor weighs slightly
against a finding of immunity.

4.

Weighing of Fitchik Factors

Having considered each of the three Fitchik factors, the Court concludes that at this stage
of the litigation, there is insufficient evidence in the record for a finding that DTCC is entitled to
immunity pursuant to the Eleventh Amendment. While the second factor, DTCC's status under
State law, weighs slightly in favor of immunity, the remaining two factors, the source of the
money for a judgment and the entity's autonomy, weigh against a finding of immunity (the latter
slightly so). The Court therefore finds that, at this time, DTCC has not met its burden of
establishing that it is entitled to Eleventh Amendment immunity, or relatedly, that the Individual
Defendants are immunized from claims brought against them in their official capacities. 10

B.

Alleged Pleading Deficiencies

Defendants' next argument is that Plaintiffs claims should be dismissed pursuant to Rule
12(b)(6) for failure to state a claim. Defendants assert that all of Plaintiffs claims fail to meet
the pleading standards of Rule 8(a), as that rule is interpreted by Twombly and Iqbal.

10

Accordingly, it is unnecessary for the Court to consider at this time the questions
of whether such immunity has been waived, or whether the Complaint seeks relief in violation of
that immunity (i.e., relief other than prospective injunctive relief).
22

1.

Section 1981 Claims

Section 1981 provides that:
All persons within the jurisdiction of the United States shall have
the same right in every State and Territory to make and enforce
contracts, to sue, be parties, give evidence, and to the full and equal
benefit of all laws and proceedings for the security of persons and
property as is enjoyed by white citizens, and shall be subject to like
punishment, pains, penalties, taxes, licenses, and exactions of
every kind, and to no other.
42 U.S.C. § 1981.
"To state a claim under section § 1981, a plaintiff 'must allege facts in support of the
following elements: (1) [that plaintiff] is a member of a racial minority; (2) intent to discriminate
on the basis of race by the defendant; and (3) discrimination concerning one or more of the
activities enumerated in the statute[,] which includes the right to make and enforce contracts ...

."' Watson v. Dep 't ofServs. for Children, Youths and Their Families Delaware, Civ. Nos. 10978-LPS, 12-019-LPS, 2012 WL 2072867, at *4 (D. Del. June 8, 2012) (quoting Brown v.

Phillip Morris, Inc., 250 F.3d 789,797 (3d Cir. 2001)). 11 Importantly, "[t]he statute is not

11

At the evidentiary stage of a case such as this, the framework to be applied for the
purpose of establishing intent to discriminate will vary depending on the type of claim. Such
frameworks, however, are not relevant at the pleading stage, at which Plaintiff "need not
establish his prima facie case to survive a motion to dismiss." Jackson v. Rohm & Haas Co.,
Civil Action No. 06-3682, 2007 WL 2668001, at *9 (E.D. Pa. Sept. 5, 2007), vacated and
modified in part on other grounds, 2007 WL 2702797 (E.D. Pa. Sept. 12, 2007), (citing
Swierkiewicz v. Sorema NA., 534 U.S. 506, 510-12 (2002)); see also Farmer v. Aramark Corp.,
Civil Action No. 11-5621, 2012 WL 346688, at *3 (E.D. Pa. Feb. 3, 2012). Instead, Plaintiff
need only "give respondent fair notice of what petitioner's claims are and the grounds upon
which they rest." Swierkiewicz, 534 U.S. at 514. However, in keeping with the standard the
Supreme Court has set forth in Twombly, "the complaint's 'factual allegations must be enough to
raise a right to relief above the speculative level."' Jackson, 2007 WL 2668001, at *9 (citations
omitted); see also Allstate Transp. Co. v. Se. Pennsylvania Transp. Auth., No. 971482, 1997 WL
666178, at *6 (E.D. Pa. Oct. 20, 1997) (in analyzing Section 1981 claim regarding public bidding
context at motion to dismiss stage, ultimately considering simply whether plaintiff had put
23

intended to 'include practices that were neutral on their face, and even neutral in terms of
intent."' Evans v. Chichester Sch. Dist., 533 F. Supp. 2d 523, 537 (E.D. Pa. 2008) (quoting Gen.
Bldg. Contractors Ass'n, Inc. v. Pennsylvania, 458 U.S. 375,388 (1982)). Thus, for Section

1981 to be violated, there must be "'purposeful discrimination,'" and "the impact of the action
must be traced to 'a discriminatory purpose."' Evans, 533 F. Supp. 2d at 537 (quoting Gen.
Bldg. Contractors, 458 U.S. at 390).

Though the Complaint is less than clear regarding Plaintiffs precise claims, Plaintiff has
asserted in his brief and at oral argument that he intends to assert two claims under 42 U.S.C. §
1981: a claim for non-renewal of the first contract, and a claim for rejection of the second
contract. (D.I. 7 at 12-13) The Court will consider each claim separately.

a.

Section 1981 Claim for Non-Renewal of a Contract

Plaintiffs allegations regarding the circumstances surrounding DTCC' s decision not to
renew the 2007 Contract are sparse. Reading the Complaint in the light most favorable to
Plaintiff, the Court can only discern three allegations that contain facts relating to the renewal
decision. They are: (1) that Plaintiff performed the 2007 Contract without incident or problem;
(2), that the 2007 Contract was renewable at DTCC's option for a period of two years on the
same terms; and (3) that on September 28, 2009, Plaintiff received notice that DTCC would issue
a request for proposals "instead of renewing the [2007] [C]ontract[,] as it was in the best interest
of [DTCC]." (D .I. 1 at 5, at ~~ 13-15) The Complaint also states that Plaintiff is an AfricanAmerican and a Native American Indian, and that the Individual Defendants are Caucasian.

forward "sufficient factual pleadings to make, at least, a tenuous inference that the awarding of
the bid was indeed motivated by racial concerns" and finding that plaintiff had done so).

24

(!d. at 2-3,

at~~

5, 7-11) On these facts, Plaintiff alleges that "[t]he sole reason Defendants non-

renewed [sic] Plaintiffs original contract ... was Plaintiffs race." (!d. at 15,

at~

73)

In their Motion, Defendants argue that Plaintiff has failed to adequately state a claim for
non-renewal because he has not set forth any facts from which an intent to discriminate could
fairly be inferred. (D.I. 5 at 9) Instead, Defendants argue, Plaintiff makes only conclusory
allegations regarding intent that are based on nothing more than the racial composition of the
individuals involved. (!d.) The Court agrees.
To sufficiently state a violation of Section 1981, "[a] specific factual basis must be pled
to create the inference of discrimination." Frederick v. Se. Pennsylvania Transp. Auth., 892 F.
Supp. 122, 125 (E.D. Pa. 1995) (citation omitted). Accordingly, in order to establish intent to
discriminate under the statute, "[ c]onclusory allegations of generalized racial bias" are
insufficient. Flagg v. Control Data, 806 F. Supp. 1218, 1223 (E.D. Pa. 1992). Put another way,
"a plaintiff must do more than allege a series of unfortunate events and baldly allege that the
defendants discriminated against him." Abdullah v. Small Bus. Banking Dep 't of the Bank of

America, Civil Action No. 13-305, 2013 WL 1389755, at *2 (E.D. Pa. Apr. 5, 2013) (citing
Gross v. R. T Reynolds, Inc., 487 F. App'x 711, 2012 WL 2673139, at *3 (3d Cir. July 6, 2012)).
"Instead, at bottom, a complaint must allege some facts to support the conclusion that the
defendant[']s acts were motivated by an intent to discriminate against the plaintiff because of his
race." Abdullah, 2013 WL 1389755, at *2 (citations omitted).
Here, Plaintiff has only set forth "conclusory allegations of generalized racial bias" to
support his claim that the decision not to renew the 2007 Contract was due to racial
discrimination. The allegations regarding DTCC' s decision not to renew the 2007 Contract

25

demonstrate only that DTCC exercised its contractual right to re-bid the work that was the
subject of that contract, instead of renewing the contract with Plaintiff. Plaintiff does not dispute
that DTCC had this right under the 2007 Contract. Plaintiff does not allege any comparator
evidence, such as facts regarding how other white employees were treated with regard to similar
contract renewals, nor anything at all from which it could be inferred that DTCC typically renews
such contracts and that its failure to do so here was plausibly the product of racial bias. Nor does
he allege any facts regarding incidents occurring during his employment that might plausibly
suggest a wrongful motive for DTCC's decision not to renew the contract. In fact, far from
alleging facts that would suggest an improper motive in choosing not to renew, Plaintiff simply
avers that DTCC's notice of non-renewal stated that the decision was "in the best interest of
Defendant." (D .I. 1 at ~ 15)
Plaintiffs allegations concerning DTCC' s decision not to renew the 2007 Contract are
thus clearly conclusory, as there are no factual allegations from which the Court could infer that
the decision, even assuming it was somehow improper, was motivated by Plaintiffs race.
Indeed, as noted above, there are barely any factual allegations at all in the Complaint regarding
the non-renewal decision itself (i.e., as to who made the decision, the process leading to that
decision, or how and why the decision was made). In such a circumstance, the claim cannot
withstand a Rule 12(b)(6) motion. See Gross, 487 F. App'x at 716-17 & n.9 (dismissing
plaintiffs claim where the complaint "allege[d) an abundance of wrongdoing by [defendant] and
its employees" but "fail[ ed] to allege any facts supporting the conclusion that those acts were
.motivated by discrimination on the basis of race" by, inter alia, "fail[ing] to allege how
[defendant] treated non-minority contractors any differently than it treated him" or "fail[ing] to

26

allege any facts suggesting that [defendant] exercised [authority expressly granted by a contract]
for discriminatory reasons"); Shipley v. Orndoff, 491 F. Supp. 2d 498, 506 (D. Del. 2007)
(dismissing plaintiffs Section 1981 claim where plaintiff"fail[ed] to allege any facts whatsoever
that would substantiate his broad allegations of racial discrimination and has only alleged a
conclusion without presenting any facts to support it").
Accordingly, the Court recommends that this Court dismiss Plaintiffs Section 1981
claim, to the extent it is based on DTCC's decision not to renew the 2007 Contract.

b.

Section 1981 Claim for Rejection of a Contract in a Public
Bidding Context

As compared with his non-renewal claim, Plaintiffs Section 1981 claim for rejection of a
contract is supported by substantially more facts. Though Defendants argue Plaintiffs claim
should be dismissed for failure to adequately plead intent to discriminate, (D.I. 5 at 9; D.I. 8 at 9),
the Court finds that Plaintiff has included sufficient facts in support of this claim to push it over
the line of plausibility.
Having disregarded the Complaint's legal conclusions in accordance with the instructions
of Twombly and Iqbal, the Court considers the factual allegations that remain: (1) Plaintiff was
the only minority among all bidders (both in 2007 and 201 0), and there were no minorities on the
selection panel (all of whom were Caucasian); (2) Plaintiff was required to meet specific
requirements to secure the 2007 Contract, even after establishing himself as the winning bidder;
(3) Defendants had no complaints about Plaintiffs work during the time he was employed with

DTCC, but chose not to renew his contract; (4) the bidding process for the 201 0 Contract was
subjective and inconsistent; (5) the winning bidder was Caucasian; (6) the winning bidder did not
meet certain requirements that, pursuant to DTCC' s own rules, must be satisfied; (7) certain
27

requirements previously enforced against Plaintiff as part of the 2007 Contract process were not
enforced against the winning bidder in the 2010 Contract process; (8) had the rules been enforced
and the winning bidder disqualified, then Plaintiff, as the second lowest bidder, would have won
the contract; and (9) DTCC's justification for awarding the contract to someone other than
Plaintiff-that the winner outbid him-is a pretext, as DTCC ultimately paid the winning bidder
more than the amount of Plaintiffs bid. (D.I. 1 at ,-r,-r 5-58) Taken as true, and when considered
together, these allegations make it at least plausible that Plaintiff was not awarded the 2010
Contract because of his race.
Courts in this Circuit have allowed cases to go forward on similar allegations. For
instance, in Anderson v. Wachovia Mortg. Corp., 497 F. Supp. 2d 572 (D. Del. 2007), defendants
moved to dismiss minority plaintiffs' Section 1981 claim, which was based on plaintiffs'
allegations that "[s]imilarly situated whites were not required [by defendants] to meet all the
requirements imposed upon the [p]laintiffs to be eligible for a mortgage." !d. at 580 (alterations
in original). This Court denied defendants' motion, finding that the allegations-specifically that
plaintiffs were minority home buyers seeking mortgages for houses in a white neighborhood, that
plaintiffs had previously successfully obtained mortgages from defendants for houses in minority
neighborhoods, and that plaintiffs were required by defendants to meet different requirements
than were similarly situated whites-were sufficient "to draw a reasonable inference of
intentional racial discrimination" for purposes of the "intent to discriminate" element of a
Section 1981 claim. !d. at 580-81. Here, Plaintiff makes similar factual allegations to those of
the home buyers in Anderson, including that he was the only minority applying for a position
before an entirely white panel of decision-makers and that he was treated differently than were

28

similarly situated white applicants.
Similarly, in Farmer v. Aramark Corp., Civil Action No. 11-5621, 2012 WL 346688
(E.D. Pa. Feb. 3, 2012), the plaintiff asserted a Section 1981 claim, in which he alleged, inter
alia, that his former employer discriminated against him on the basis of race by not posting

vacant employment positions, thereby denying plaintiff the opportunity to apply for the positions,
and by firing him. !d. at *1. The defendant moved to dismiss on the grounds that the plaintiffs
allegations were conclusory and that he failed to allege any concrete facts giving rise to an
inference of unlawful discrimination. !d. at *3. As the Farmer Court described it, the
defendant's primary complaint was that the plaintiffs claim was inadequate because it was based
"on mere speculation and bald assertions about the motives behind [defendant Aramark' s]
decisions not to post certain positions and to terminate [plaintiffs] employment." !d. But, as the
Farmer Court pointed out, the plaintiffs burden at the pleading stage is not high. Rather, "to

state a claim, a plaintiff must state enough factual matter, taken as true, to suggest the required
element, which does not impose a probability requirement at the pleading stage, but instead
simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence
of the necessary element." !d. Considering the standard that plaintiff needed to meet, the Court
held the allegations in the complaint were sufficient:
Aramark asserts that Farmer has not alleged any concrete facts that
would give rise to an inference of unlawful discrimination.
However, regarding the Concessions Manager position that was
not posted by Aramark, Farmer avers in his Complaint that
Aramark refused to post the vacant Concessions Director position,
and instead, created a new position, Concessions Manager, and
"selected Jeremy Campbell, a White male, to fill the position." In
addition, Farmer identified Kevin Tedesco, a White male, as
having been promoted to the Director of the Lincoln Financial
Field position that Aramark failed to post. Moreover, with respect
29

to Aramark's argument that Farmer failed to plead the identity of
the Aramark decision-makers, we agree with Farmer that this issue
can be developed in discovery. Thus, viewing all reasonable
inferences in the light most favorable to Farmer, we deny
Aramark's Motion to Dismiss with respect to Farmer's race
discrimination claim.

!d. at *4 (internal citations omitted). The facts of Farmer also provide helpful context for what
types of pleading will be sufficient, and argue in favor of a finding that Plaintiffs allegations
here meet that threshold.
But because the line between "possible" and "plausible" is a thin one, it is also a useful
exercise to consider factually similar cases in which pleadings have been found insufficient. For
example, in Golod v. Bank ofAm. Corp., 403 F. App'x. 699 (3d Cir. 201 0), the Third Circuit
affirmed the district court's dismissal of plaintiffs Section 1981 claim. The district court
dismissed the claim because the plaintiff had "failed to allege that nonmembers of the protected
class were treated more favorably[,]'' and did not "detail what protected conduct she engaged in,
what promotions she was denied, or which Bank of America employee ... denied her
promotion." !d. at 701. The Third Circuit agreed with the district court's analysis, noting that
the plaintiff had the burden of pleading enough facts to permit the inference that the adverse
employment action at issue occurred because of her race, sex, or national origin. !d. at 702. The
Third Circuit found that the plaintiff had not met this burden, because she offered "no factual
allegations to bolster her legal conclusions." !d. The Court went on to describe the type of
allegations that the complaint lacked:
[S]he did not provide any characteristics of those individuals who
received the promotions to which she alleges she was entitled. She
did not provide any factual allegations regarding those promotions,
who rejected her promotion requests and whether she was, in fact,
qualified to fill those positions. Instead, she conclusorily asserted
30

that she was denied promotions and educational opportunities. The
District Court could not, nor can we, infer from these allegations
that the denial of these requests and opportunities was because of
her Russian and/or Jewish heritage.

Jd.12
In Wilkins v. Bozzuto & Assocs., Inc., Civil No. 09-2581,2009 WL 4756381 (E.D. Pa
Dec. 10, 2009), the United States District Court for the Eastern District of Pennsylvania
dismissed a complaint alleging racial discrimination for similar reasons. There, the Wilkins
Court was reviewing an allegation of race discrimination premised on the charge that plaintiffs
white supervisor had terminated him and hired a non-minority replacement. !d. at * 1-2. The
Wilkins Court held that the information presented in the complaint created "no more than a 'mere

possibility' of Plaintiffs right to relief[,]" in that it "does not record one incident in which
employees of other races were treated differently, [n ]or an occasion in which his new supervisor
expressed or displayed racial bias", and it lacked "any explanation of the circumstances that led
him to believe that racial discrimination was involved in Defendant's hiring and firing
decisions." !d. at *2. Instead, the plaintiff "simply state[d], in conclusory fashion, that his firing

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The Golod Court explained that allegations regarding similarly situated
individuals is only one of several ways a plaintiff could raise an inference of discrimination:
Like the District Court, we focus on the absence of adequate comparator
evidence because this appears to be the most obvious way to supplement
Golod's deficient complaint. But Golod was not required to plead
comparator evidence to support an inference of discrimination. Such an
inference could be supported in a number of ways, including, but not
limited to, comparator evidence, evidence of similar racial discrimination
of other employees, or direct evidence of discrimination from statements
or actions by her supervisors suggesting racial animus.

!d. at 703 n.2.
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was related to his race, based upon the race of his supervisor, his lack of knowledge of
complaints filed regarding his work ... , and the unverified race of the employee who was
subsequently hired to replace him." Id. Accordingly, the Wilkins Court dismissed plaintiffs
complaint. Id. at *3.
Plaintiffs Complaint in the instant matter falls more in line with cases like Anderson and
Farmer, in which motions to dismiss were denied, than with cases like Golod and Wilkins, where
such motions were granted. Here, Plaintiff included the type of comparator evidence that was
missing from both of the latter cases. Specifically, he included factual allegations regarding the
identities and racial composition of the other bidders, including the winning bidder, Outdoor. He
included specific allegations regarding his qualifications for the job and specific allegations
regarding the winning bidder's lack of qualification. He asserted instances in which the selection
criteria for the position were assertedly exercised in a contradictory and inconsistent fashion.
Finally, he included an account of the ways in which Outdoor was treated differently when it was
the winning bidder than was Plaintiff after Plaintiff won the 2007 Contract. Taken together,
these facts at least create a plausible inference of discrimination, which is all that Plaintiff must
do to survive the instant Motion. Cf Depelligrin v. A & L Motor Sales, LLC, Civil Action No.
2:11-cv-01579, 2012 WL 3073182, at *5 (W.D. Pa. July 27, 2012) (finding, as to ADEA claim,
that allegations regarding the "large disparity between [the ages of plaintiff and the person who
was hired to replace him], along with the [plaintiffs] claims that he was an exemplary employee
and that [his replacement] lacked the necessary qualifications for the driver position" were
sufficient to "make[] it at least plausible that [plaintiff] was terminated because of his age")
(internal quotation marks and citation omitted).

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For all of these reasons, the Court recommends that Defendants' Motion be denied with
respect to Plaintiffs Section 1981 claim for rejection of a contract.

2.

Section 1983 Claims

Section 1983 provides, in relevant part: "Every person who, under color [of law] ...
subjects, or causes to be subjected, any citizen of the United States ... to the deprivation of any
rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party
injured in an action at law, suit in equity, or other proper proceeding for redress." 42 U.S.C. §
1983. Section 1983 does not create substantive rights, but instead "merely provides a remedy for
deprivations of rights established elsewhere in the Constitution or federal laws." Estate ofSmith

v. Marasco, 318 F.3d 497, 505 (3d Cir. 2003). "To state a claim under [Section] 1983, a plaintiff
must allege the violation of a right secured by the Constitution and laws of the United States, and
must show that the alleged deprivation was committed by a person acting under color of state
law." 13 West v. Atkins, 487 U.S. 42, 48 (1988). "Under Third Circuit precedent, a [Section] 1983
claim will survive a motion to dismiss under Rule 12(b)(6) if it 'allege[s] the specific conduct
violating the plaintiffs rights, the time and place of the conduct, and the identity of the
responsible officials."' Knight v. Carmike Cinemas, Civil Action No. 11-280, 2011 WL
3665379, at *4 (D. Del. Aug. 22, 2011) (quoting Colburn v. Upper Darby Twp., 838 F.2d 663,
666 (3d Cir. 1988)). Here, Plaintiffs claims are based on alleged violations of the Equal

13

Plaintiff alleges, and Defendants do not here dispute, that Defendants' actions
were under color of State law. (D.I. 1 at 16, at ,-r 82) The Court will thus assume this
requirement is met for purposes of resolving the instant Motion. See Lamb v. Taylor, C.A. No.
08-324 GMS, 2009 WL 866793, at *3 n.1 (D. Del. Mar. 31, 2009) ("[A]n entity that is not an
arm of the state ... can be a state actor for purposes of [Section] 1983.").
33

Protection Clause of the Fourteenth Amendment. (See D.I. 7 at 14-15) 14
The Fourteenth Amendment provides that no State shall "deny to any person within its
jurisdiction the equal protection ofthe laws." U.S. Const. amend. XIV,§ 1. "This is essentially
a direction that all persons similarly situated should be treated alike." Shuman ex ref. Shertzer v.

Penn Manor Sch. Dist., 422 F.3d 141, 151 (3d Cir. 2005) (citation omitted). To bring a claim for
the denial of equal protection, a plaintiff must demonstrate that he "received different treatment
from that received by other individuals similarly situated." !d. (citation omitted). Ultimately,
"plaintiffs must prove the existence of purposeful discrimination." Andrews v. City of

Philadelphia, 895 F.2d 1469, 1478 (3d Cir. 1990). Relatedly, in considering whether a plaintiff
has adequately pled a claim for denial of equal protection, a court must determine whether, as a
threshold matter, the complaint alleges facts supporting the conclusion that: "(1) the
complaining person, compared with others similarly situated, was selectively treated, and (2) the
selective treatment was motivated by an intention to discriminate on the basis of impermissible
considerations, such as race or religion, to punish or inhibit the exercise of constitutional rights,

14

Defendants contend that Plaintiffs Complaint fails to explain the relevance of the
Fourteenth Amendment, including which type of claim was being asserted (i.e., Equal Protection
or Due Process). (D.I. 5 at 2, 10) Without citation to any supporting legal authority, Defendants
appear to argue that, for these reasons alone, Plaintiffs claims premised upon the Fourteenth
Amendment must be dismissed. (!d.) However, because the Court is instructed to "construe the
complaint in the light most favorable to [] [P]laintiff," Fowler, 578 F.3d at 210, and because the
Complaint does assert violations of the Fourteenth Amendment and does contend that Plaintiff
was treated differently than others-the crux of an Equal Protection claim-the Court is
unpersuaded by this argument. Cf Metzgar v. Lehigh Valley Hous. Auth., No. Civ. A. 98-CV3304, 1999 WL 562756, at *2 (E.D. Pa. July 27, 1999) (where plaintiff had generally alleged a
cause of action under Section 1983, stating that "[r]eading the [] Complaint in the light most
favorable to Plaintiff, the Court will construe the allegations. in Count Three as a claim that
Defendants, while acting under color of state law, deprived Plaintiff of her rights under the Due
Process Clause of the Fourteenth Amendment").
34

or by a malicious or bad faith intent to injure the person." Hennis v. Tedrow, Civil Action No.
10-445, 2011 WL 6780692, at *3 (W.D. Pa. Dec. 27, 2011) (citing Sabatini v. Reinstein, No.
Civ. A. 99-2393, 1999 WL 636667, at *2 (E.D. Pa. Aug. 20, 1999)).
Plaintiffs counsel stated at oral argument that, like his Section 1981 claim, he intends to
plead two distinct Section 1983 claims: one arising out of the non-renewal of the 2007 Contract
and one arising out of the failure to hire him for the 2010 Contract. This point is also clarified in
Plaintiffs brief. (D.I. 7 at 15 ("[T]he § 1983 claims for race discrimination in the non-renewal of
Plaintiffs original contract and in the denial of hiring him for the new contract (Compl. Count II)
are adequately pled .... ")) Because the requirements for Plaintiffs Section 1983 claim are so
similar to those of his Section 1981 claim, Plaintiffs respective Section 1983 claims fail and
succeed, respectively, for the same reasons that his Section 1981 claims do.
Plaintiffs Section 1983 claim for non-renewal suffers from the same problem as does his
Section 1981 claim for non-renewal: the failure to plead sufficient facts to give rise to an
inference of discrimination. Plaintiff has alleged no more facts in support of his Section 1983
claim regarding DTCC's failure to renew the 2007 Contract than he did for his Section 1981
claim arising out of the same facts. Even construing the Complaint in the light most favorable to
Plaintiff and accepting all well-pled allegations as true, there are insufficient bases presented
upon which the Court may conclude that Plaintiff was "selectively treated" in the non-renewal of
the 2007 Contract and that it was not renewed because of "an intention to discriminate on the
basis of ... race." Hennis, 2011 WL 6780692, at *3.
Similarly, just as Plaintiffs Section 1981 claim for failure to hire under the 2010 Contract
survives Defendants' Motion, the Court finds that his Section 1983 failure to hire claim is also

35

sufficient to withstand the Motion. As discussed above, in support of his Section 1981 claim,
Plaintiff has adequately alleged both that: (1) he was treated differently than similarly situated
individuals-specifically, that he was treated differently than Outdoor, a landscape company like
Plaintiffs that was competing for the same work; and (2) that such selective treatment was
motivated by an intention to discriminate on the basis of race. For purposes of a Rule 12(b)(6)
analysis, Plaintiff has adequately pled his claim. See Chan v. Cnty. of Lancaster, Civil Action
No. 10-cv-03424, 2011 WL 4478283, at *14-15 (E.D. Pa. Sept. 26, 2011) (holding that, on a
motion to dismiss, "a general allegation that plaintiff has been treated differently from others
similarly situated will suffice" and denying motion to dismiss where plaintiff had alleged that
Caucasians holding similar positions were not disciplined for engaging in certain activities,
whereas plaintiff was disciplined for similar alleged misconduct).
For these reasons, the Court recommends that Defendants' Motion with respect to
Plaintiffs Section 1983 claim for failure to renew the 2007 Contract be granted, and Defendants'
Motion with respect to DTCC's failure to hire as to the 2010 Contract be denied.

C.

Qualified Immunity of Individual Defendants

Defendants' last argument is that the claims against the Individual Defendants should be
dismissed pursuant to the doctrine of qualified immunity. "Qualified immunity shields federal
and state officials from money damages unless a plaintiff pleads facts showing ( 1) that the
official violated a statutory or constitutional right, and (2) that the right was 'clearly established'
at the time of the challenged conduct." Ashcroft v. al-Kidd,- U.S.-, 131 S.Ct. 2074, 2080
(2011) (citing Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982)). "It is the burden of a defendant
official asserting qualified immunity to establish an entitlement to the same." Neuberger v.

36

Gordon, 567 F. Supp. 2d 622, 638 (D. Del. 2008) (citations omitted).
The Individual Defendants' primary argument in support of the application of this
doctrine here is that Plaintiff has failed to sufficiently plead the violation of any constitutional or
statutory rights, much less "clearly established" ones. (D.I. 5 at 15) Instead, Individual
Defendants argue, Plaintiffs allegations, at most, show only that Individual Defendants
wrongfully exercised their discretion in a contract bid process, a showing that is not enough to
overcome their qualified immunity. (!d.) Plaintiff disagrees, arguing that he has sufficiently
alleged a violation of his clearly established right to be free from racial discrimination. (D.I. 7 at
15)
Focusing on the grounds at issue here regarding the qualified immunity claim, the Court
finds that the Individual Defendants have not met their burden of establishing that they are
entitled to that immunity. As discussed above, the Court finds that Plaintiff has sufficiently pled
claims for racial discrimination with respect to the 201 0 Contract pursuant to Section 1981 and
Section 1983. That Plaintiff has the right to be free from racial discrimination in the making and
enforcing of contracts and his right to equal protection of the law is clearly established. Wilson v.
Taylor, 466 F. Supp. 2d 567, 574 (D. Del. 2006) (denying motion to dismiss on the basis of
qualified immunity and noting that "[t]he right to be free of racial discrimination is a clearly
established Constitutional right"); see also Williams v. Richland Cnty. Children Servs., 489 F.
App'x 848, 854 (6th Cir. 2012) (affirming denial of qualified immunity defense where plaintiff
adequately pled claims pursuant to Section 1981 and 1983 and observing that "[i]f any 'right'
under federal law is 'clearly established,' it is the constitutional right to be free from racial
discrimination. Not only is this obligation 'clearly established,' but it is evident from the face of

37

[Section 1981 and the Equal Protection Clause].") As the Individual Defendants' only argument
in support of their qualified immunity defense is that Plaintiff has not alleged the violation of a
clearly established right, the defense must fail on that ground.

D.

Nature of Dismissal

As noted above, Plaintiff has failed to allege sufficient facts to make out a plausible claim
for relief on either Count of the Complaint that is directed at DTCC' s decision not to renew the
2007 Contract. However, in this jurisdiction, a court must generally grant leave to amend before
dismissing a pleading asserting claims of this variety that are merely deficient. See, e.g., Shane v.

Fauver, 213 F.3d 113, 116-17 (3d Cir. 2000). "Dismissal without leave to amend is justified
only on the grounds of bad faith, undue delay, prejudice, or futility." Alston v. Parker, 363 F.3d
229, 236 (3d Cir. 2004). There is no evidence here that Plaintiff has acted improperly or in bad
faith, and Plaintiff has not yet sought to amend his pleading. Although Defendants essentially
argue that Plaintiffs claims are futile, the Court recommends that at this early stage, and based
on the incomplete record currently before it, Plaintiff should be granted leave to amend. See,

e.g., Knight, 2011 WL 3665379, at *3 (stating that "in a civil rights case, a court must allow a
plaintiff leave to amend the complaint unless it would be inequitable or futile to do so") (citing

Phillips, 515 F.3d at 245); see also Hudson v. Aaron Rental Co., Inc., C. A. No. 09-332 (GMS),
2010 WL 2679863, at *5 (D. Del. July 6, 2010).

IV.

CONCLUSION
For the above reasons, I recommend that the Court GRANT Defendants' Motion to

dismiss Plaintiffs claims that arise out of DTCC' s decision not to renew the 2007 Contract, but
do so without prejudice to allow Plaintiff the opportunity to file an amended complaint that

38

addresses the factual and legal deficiencies outlined above. I further recommend that the Court
DENY the remainder of Defendants' Motion.
This Report and Recommendation is filed pursuant to 28 U.S.C. § 636(b)(1 )(B), Fed. R.
Civ. P. 72(b)(1), and D. Del. LR 72.1. The parties may serve and file specific written objections
within fourteen (14) days after being served with a copy of this Report and Recommendation.
Fed. R. Civ. P. 72(b). The failure of a party to object to legal conclusions may result in the loss
of the right to de novo review in the district court. See Henderson v. Carlson, 812 F.2d 874, 87879 (3d Cir. 1987); Sincavage v. Earhart, 171 F. App'x 924, 925 n.1 (3d Cir. 2006).
The parties are directed to the Court's Standing Order in Non-ProSe Matters For
Objections Filed Under Fed. R. Civ. P. 72, dated November 16, 2009, a copy of which is
available on the District Court's website, located at http://www.ded.uscourts.gov.

Dated: May 1, 2013
Christopher J. Burke
UNITED STATES MAGISTRATE JUDGE

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