Equal Employment Opportunity Commission v. La Rana Hawaii, LLC et al

Filing 55

ORDER(1) GRANTING IN PART AND DENYING IN PART 14 DEFENDANT ALTRES, INC.'S MOTION TO DISMISS COMPLAINT FILED DECEMBER 30, 2011 AND (2) GRANTING 30 DEFENDANT LA RANA HAWAII, LLC'S MOTION TO DISMISS COMPLAINT FILED DECEMBER 30, 2011: &q uot;On the basis of the foregoing, ALTRES's Motion to Dismiss Complaint Filed December 30, 2011, filed on March 15, 2012 is GRANTED to the extent it seeks dismissal of the Complaint and DENIED to the extent it requests that the Court not grant l eave to amend. La Rana's Motion to Dismiss Complaint Filed December 30, 2011, filed on April 26, 2012, is HEREBY GRANTED. The present action is STAYED pending the parties' good-faith conciliation. Upon completing proper conciliation, the EE OC may file a First Amended Complaint no later than November 1, 2012. The Court CAUTIONS the EEOC that, if it fails to file its First Amended Complaint by November 1, 2012, the claims that this Order dismissed without prejudice will be automatical ly dismissed with prejudice. Further, if the EEOCs First Amended Complaint fails to cure the defects identified in this Order or adds new parties, claims, facts, or theories of liability, this Court may dismiss those claims with prejudice. IT IS SO ORDERED.". Signed by JUDGE LESLIE E. KOBAYASHI on August 22, 2012. (bbb, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
EQUAL EMPLOYMENT
OPPORTUNITIES COMMISSION,

)
)
)
)
Plaintiff,
)
vs.
)
)
LA RANA HAWAII, LLC D/B/A
)
)
SENOR FROG’S and ALTRES,
INC., DOE 1-15, INCLUSIVE,
)
)
)
Defendants.
_____________________________ )

CIVIL NO. 11-00799 LEK-BMK

ORDER(1) GRANTING IN PART AND DENYING IN PART
DEFENDANT ALTRES, INC.’S MOTION TO DISMISS COMPLAINT
FILED DECEMBER 30, 2011 AND (2) GRANTING DEFENDANT LA RANA
HAWAII, LLC’S MOTION TO DISMISS COMPLAINT FILED DECEMBER 30, 2011
Before the Court is Defendant ALTRES, Inc.’s (“ALTRES”)
Motion to Dismiss Complaint Filed December 30, 2011 (“ALTRES
Motion”), filed on March 15, 2012, [dkt. no. 14,] and Defendant
La Rana Hawaii, LLC’s (“La Rana”) Motion to Dismiss Complaint
Filed December 30, 2011 (“La Rana Motion”), filed on April 26,
2012 [dkt. no. 30].

Plaintiff United States Equal Employment

Opportunity Commission (“EEOC”) filed its memoranda in opposition
on July 9, 2012, [dkt. nos. 41, 42,] and ALTRES and La Rana
(collectively, “Defendants”) filed their respective replies on
July 16, 2012 [dkt. nos. 45, 46].
hearing on July 30, 2012.

These matters came on for

Appearing on behalf of the EEOC were

Michael J. Farrell, Esq., and Amrita Mallik, Esq.; appearing on
behalf of La Rana were Barbara A. Petrus, Esq., and Anne T.

Horiuchi, Esq.; and appearing on behalf of ALTRES were Andrew L.
Pepper, Esq., and Laura J. Maechtlen, Esq.

After careful

consideration of the motions, supporting and opposing memoranda,
and the arguments of counsel, the ALTRES Motion is HEREBY GRANTED
IN PART AND DENIED IN PART and the La Rana Motion is HEREBY
GRANTED for the reasons set forth below.
BACKGROUND
I.

The Complaint
The EEOC’s Complaint against Defendants alleges

violations of Title VII of the Civil Rights Act of 1964 (“Title
VII”) and Title I of the Civil Rights Act of 1991 (“Title I”) for
“unlawful employment practices on the basis of sex (female) and
retaliation, and [] to provide appropriate relief to a class of
female employees similarly situated to Charging Party Heather
Colletto (collectively, the ‘Claimants’) who were adversely
affected by such practices.”

[Complaint at pg. 1.]

The EEOC

alleges that Defendants subjected Claimants to unwelcome physical
and verbal sexual conduct, disparate treatment, constructive
discharge, and retaliation on the basis of sex.

[Id. at pg. 2.]

The EEOC alleges that, during the relevant period
between 2007 and 2008, ALTRES was under contract with La Rana for
employment-related services, and Defendants were joint employers
that “generally controlled the terms and conditions of the
employment of the Claimants.”

[Id. at ¶ 8.]

2

It argues that

Defendants: (1) jointly hired and managed non-management
employees; (2) shared common management over non-management
employees, who were employed by both ALTRES and La Rana; (3) gave
non-management employees an employee handbook containing sexual
harassment policies created by ALTRES; and (4) instructed
employees to direct complaints of sexual harassment to ALTRES,
which investigated such allegations.

[Id.]

At some unspecified time, employee Heather Colletto
filed charges with the EEOC alleging violations of Title VII by
La Rana and ALTRES.

[Id. at ¶¶ 12, 15.]

The EEOC investigated

the charges and issued a Letter of Determination finding that
Defendants subjected Colletto and a class of other similarly
situated female employees to a hostile work environment,
disparate treatment, constructive discharge, and retaliation in
violation of Title VII.

[Id. at ¶¶ 13, 15, 16.]

The EEOC claims

that it attempted to eliminate the allegedly unlawful employment
practices and effect voluntary compliance with Title VII.

[Id.

at ¶ 17.]
The EEOC argues that, since at least 2007, Defendants
engaged in unlawful employment practices in violation of Sections
703 and 704 of Title VII, 42 U.S.C. §§ 2000e-2 and 2000e-3.

As

to Section 703, the EEOC alleges “unwelcome sexual conduct,
constructive discharge, and disparate treatment against females”
that were “sufficiently severe and pervasive to adversely affect

3

the terms and conditions of their employment and create a
hostile, abusive work environment.”

[Id. at ¶ 20.]

The EEOC

alleges that: (1) there existed sexually explicit remarks by the
owner toward a female server; sexual advances and demands by
management officials to female employees; and sexual comments and
unwanted touching of female employees’ breasts and
buttocks; (2) the conduct was unwelcome, and the female employees
tried to rebuff or avoid the unwelcome conduct; (3) the sexual
harassment was sufficiently severe and pervasive to create a
hostile work environment; and (4) the female employees took steps
to stop the harassment and complained to Defendants’ management
officials, but Defendants “failed to take reasonable steps to
prevent and correct the harassment, but instead engaged in
tangible employment actions of reducing the female employees’
hours, giving them less favorable working conditions, terminating
them and/or causing their constructive discharge[.]”

[Id.]

Also regarding Section 703, the EEOC contends that
Defendants subjected Colletto and other female employees to
disparate treatment, as evidenced when Defendants assigned female
employees to shorter work shifts, afforded them less desirable
assignments with less earning opportunities, and stationed female
employees only in certain areas of the restaurant.

The EEOC also

alleges that “Senor Frog’s Human Resource Manager made
[Defendants’] anti-female animus clear when at a meeting wherein

4

other management [officials] explored the possibilities of hiring
additional female bartenders, the Human Resources Manager
disapprovingly rejected the idea saying he did not want more
females as they were too much ‘drama[.]’”

[Id. at ¶ 22(c).]

As to Section 704, the EEOC alleges that Defendants
retaliated against Colletto and other female employees for
complaining of the hostile work environment: (1) female employees
engaged in a protected activity when they complained of the
unlawful sexual harassment to Defendants’ management officials;
(2) Defendants reduced female employees’ work hours, gave them
less favorable working conditions, and harassed them at work; and
(3) Defendants constructively discharged Colletto for engaging in
a protected activity, while similarly situated employees who did
not complain did not face retaliation.

[Id. at ¶ 21.]

The EEOC requests that the Court: (1) issue a permanent
injunction enjoining Defendants from engaging in employment
practices or retaliation that discriminate on the basis of sex;
(2) order that Defendants institute and carry out policies,
practices, and programs that provide equal employment
opportunities; (3) order that Defendants pay backpay with
prejudgment interest and other appropriate relief; (4) order that
Defendants pay appropriate past and future pecuniary losses,
and/or other appropriate relief; (5) order that Defendants pay
compensation for past and future non-pecuniary losses; (6) order

5

Defendants to pay punitive damages; (7) grant further relief as
necessary; and (8) award the EEOC its costs.

[Id. at pgs. 10-

11.]
II.

The Conciliation Process
Both the ALTRES Motion and the La Rana Motion discuss

the EEOC’s investigation and correspondence with Defendants
preceding the instigation of the present action.
According to ALTRES, it received a copy of the EEOC’s
Charge of Discrimination (“Charge”) on or around December 29,
2008.

With respect to ALTRES, the Charge alleged that ALTRES

ratified the hostile work environment and Colletto’s constructive
discharge by not taking “reasonable and/or necessary measures” to
put a stop to the alleged wrongdoing.

[Mem. in Supp. of ALTRES

Motion at 2-3.]
The EEOC issued its Letter of Determination on or
around June 27, 2011, in which it stated that, regarding
Colletto’s charges of discrimination:
No finding has been made with regards to
Charging Party’s allegations.
The Commission has determined that there
is reasonable cause to believe that a class
of female employees were subjected to sexual
harassment, intimidation, adverse terms &
conditions of employment and constructive
discharge because of their sex, female and/or
in retaliation for engaging in protected
activity.
[ALTRES Motion, Decl. of Andrew Pepper (“Pepper Decl.”), Exh. 2

6

(emphasis omitted).]
On or around July 29, 2011, the EEOC wrote:
The policies, procedures, and/or
practices that ALTRES had during this period
with respect to addressing discrimination and
harassment occurring at a client’s worksite
failed to prevent the discrimination that
occurred in this case. As such, it is
necessary for ALTRES to revise and/or
implement measures to ensure the proper
handling of such discrimination or harassment
at a client’s worksite. The injunctive
relief proposed in the attached Agreement
seeks to achieve that goal.
The Commission is seeking monetary
relief for a class of aggrieved individuals,
to include the following:
1)

Payment of $800 to Ms. Beverly Subia.
This amount represents lost wages.

2)

Payment of $200,000 for each of the two
(2) identified Class Member [sic], Ms.
Beverly Subia and Ms. Connie Sanchez.
This amount constitutes non-pecuniary
compensatory damages (emotional
distress, pain and suffering) for any
other aggrieved individuals identified
by the EEOC.

3)

Establishment of a Class Fund in the
amount of $500,000. This amount
constitutes economic damages (lost
wages, benefits, etc.) and non-pecuniary
compensatory damages (emotional
distress, pain and suffering) for any
other aggrieved individuals identified
by the EEOC.

[Pepper Decl., Exh. 3.]

ALTRES responded by submitting a Freedom

of Information Act (“FOIA”) request for information regarding the
alleged “class of aggrieved individuals” and “the bases for the

7

EEOC’s cause finding as to how the EEOC formulated its
conciliation demand.”

[Mem. in Supp. of ALTRES Motion at 5

(quoting Pepper Decl., Exh. 4).]

The EEOC denied the FOIA

request on the ground that disclosure could interfere with law
enforcement proceedings.

[Id. (citing Pepper Decl., Exh. 5).]

Regarding the EEOC’s investigation, ALTRES points to
correspondence from the EEOC dated August 19, 2011, in which the
EEOC represented that it reviewed documents and interviewed
Colletto and relevant witnesses.

The EEOC stated that it had

identified three class members: Beverly Subia, Connie Sanchez,
and Kristen Ertefai.

ALTRES contends that, although the letter

mentions “retaliation” in passing, it does not describe the
retaliated or whether the class members engaged in a protected
activity.

Moreover, although the letter references “yet to be

identified class members,” ALTRES argues that the EEOC
investigation was closed as of June 27, 2011, and the letter did
not discuss how those class members would be identified.

[Id. at

5-6 (citing Pepper Decl., Exh. 6).]
By correspondence dated August 31, 2011, the EEOC
required a monetary settlement offer to continue negotiations:
“as the EEOC asserted, ‘ALTRES must make some offer of monetary
relief for the class of aggrieved individuals in this case in
order to demonstrate that they are engaging in this process in
good faith and to enable EEOC to continue to work toward a

8

resolution.’”

[Id. at 7 (quoting Pepper Decl., Exh. 8).]

ALTRES settled with Colletto on August 29, 2011.
(citing Pepper Decl. at ¶ 11).]

[Id.

On November 21, 2011, the EEOC

notified ALTRES that it was ending the conciliation process.
[Id. (citing Pepper Decl., Exh. 10).]
Similarly, according to La Rana, it also requested
copies of documents relating to the allegations of Title VII
violations on or around August 8, 2011.

[Mem. in Supp. of La

Rana Motion at 4 (citing La Rana Motion, Decl. of Barbara Petrus
(“Petrus Decl.”), Exh. E).]

The EEOC responded that it would not

provide the requested documents, but explained that it had
reached its “‘determination after conducting a thorough
investigation, including a review of the charge of discrimination
filed against [La Rana], providing [La Rana] the opportunity to
respond to the charge, requesting and reviewing documents
provided from [Colletto] and [La Rana] to support their
positions, and interviewing [Colletto] and the relevant
witnesses.’”

[Id. at 5 (quoting Petrus Decl., Exh. F at 1)

(brackets La Rana’s).]

The EEOC also stated that, “‘in addition

to these identified class members [Beverly Subia, Connie Sanchez,
and Kristen Ertefai], there may be other yet to be identified
class members who would be entitled to relief.’”

[Id. (quoting

Petrus Decl., Exh. F at 1) (emphasis added by movant)).]

9

By letter dated August 26, 2011, La Rana responded to
the conciliation demand by stating that it had “no understanding
of the bases for this alleged ‘class action[,]’” because it had
never received any charges or other documents related to the
three Claimants.
2).]

[Id. at 6 (quoting Petrus Decl., Exh. G at 1-

La Rana claims that it was unaware that the EEOC was

investigating claims related to Subia, Sanchez, or Ertefai, and
thus it did not have an opportunity to respond to allegations of
discrimination or retaliation regarding the three Claimants.
[Id. at 6-7.]
The EEOC responded by letter on the same day, stating
that La Rana “was given ample notice of the nature and scope of
EEOC’s investigation, was given every opportunity to fully
participate in EEOC’s investigation and, in fact, did participate
in EEOC’s investigation.”
H at 1).]

[Id. at 7 (quoting Petrus Decl., Exh.

The EEOC requested that La Rana offer a monetary

settlement to demonstrate that it was engaging in the
conciliation process in good faith.

[Id. (quoting Petrus Decl.,

Exh. H at 1).]
On September 14, 2011, La Rana stated that the EEOC had
provided no indication that it was seeking “class” relief, as it
did not indicate that it was investigating alleged misconduct
toward any employee other than Colletto.

La Rana contends that

it could not assess the reasonableness of the EEOC’s conciliation

10

demand because it had no information regarding the alleged
harassment and retaliation.

La Rana also asserted that the

$500,000 demand for a class fund was unreasonable.

[Id. at 7-8

(citing Petrus Decl., Exh. I at 1-2).]
Counsel for La Rana and the EEOC held an in-person
meeting, after which the EEOC asserted that La Rana had been
aware of the scope of the claims.

The EEOC did not offer new

information, but rather repeated the facts asserted in the
Charge.

[Id. at 9-10 (citing Petrus Decl., Exh. J at 2).]

On or

around October 14, 2011, La Rana responded by stating that the
number of class members was insufficient to justify $200,000 in
compensatory and punitive damages per claimant.

La Rana objected

to the class fund as unreasonable because “the EEOC is demanding
that [La Rana] make a ‘nearly blind settlement offer’ in order
for the conciliation process to continue.”

[Id. at 10 (quoting

Petrus Decl., Exh. K at 3).]
On or around October 20, 2011, the EEOC asserted that
La Rana had been “repeatedly and unequivocally” put on notice of
the alleged violations.

It also reduced its demand for

compensatory relief to $100,000 per Claimant and $350,000 for the
class fund.

[Id. at 11-12 (quoting Petrus Decl., Exh. L at 2).]

In response, La Rana offered $11,250 for the three Claimants and
an additional $11,250 for the class fund.
Petrus Decl., Exh. M at 2).]

[Id. at 13 (citing

A week later, the EEOC ended the

11

conciliation process, stating that it had “determined that
efforts to conciliate the above-mentioned charge . . . have been
unsuccessful.”

[Id. at 13-14 (quoting Petrus Decl., Exh. N).]

III. ALTRES Motion
A.

Motion
The ALTRES Motion focuses primarily on two arguments:

(1) that the Court lacks subject matter jurisdiction because the
EEOC did not comply with the compulsory conciliation obligation;
and (2) that the Complaint alleges insufficient facts under Rule
12(b)(6) of the Federal Rules of Civil Procedure.
1.

Subject Matter Jurisdiction

ALTRES argues that the Complaint should be dismissed
because, on its face, it does not allege that the EEOC
conciliated the claims in good faith.

Before the EEOC has

standing to bring suit against an employer: (1) an administrative
charge must be filed against the employer; (2) the EEOC must give
the employer notice of the charge; (3) the EEOC must investigate
the charge; (4) the EEOC must issue a reasonable cause
determination; and (5) the EEOC must engage in a good faith
effort at conciliation.

[Mem. in Supp. of ALTRES Motion at 11

(citing 42 U.S.C. § 2000e-5(b); EEOC v. Cal. Psychiatric
Transitions, Inc., 644 F. Supp. 2d 1249, 1263-64 (E.D. Cal.
2009); EEOC v. Outback Steak House of Fla., Inc., 520 F. Supp. 2d
1250, 1262 (D. Colo. 2007)).]

ALTRES argues that these

12

prerequisites are jurisdictional limitations on the EEOC’s
ability to initiate a civil action.

[Id. (citing EEOC v.

Dillard’s Inc., No. 08-CV-1780-IEG (PCL), 2011 WL 2784516, at *13
(S.D. Cal. July 14, 2011)).]

It contends that the EEOC failed to

allege facts showing that EEOC completed these pre-litigation
requirements, or facts showing that its pre-litigation efforts
“were sufficient to put [ALTRES] on notice that it potentially
faced claims arising from a . . . class of current and former
employees.”

[Id. at 11-12 (quoting Dillard’s, Inc., 2011 WL

2784516, at *20).]
Next, ALTRES argues that the EEOC failed to conciliate
all allegations in this action.

It asserts that “[t]here is a

split among the circuit courts of appeal as to how far a court
may go in examining the substance of the conciliation
negotiations between the parties.”
omitted).]

[Id. at 12-13 (citations

It argues that the Ninth Circuit has not decided this

issue, but that district courts in this circuit follow the
reasoning of EEOC v. Delight Wholesale Co., 973 F.2d 664, 669
(8th Cir. 1992), and focus on whether the EEOC “provided the
employer with an opportunity to confront all the issues at the
conciliation stage.”

[Id. at 13-14 (citing EEOC v. Lawry’s

Rests., Inc., CV 06-01963DDP (PLAX), 2006 WL 2085998, at *2 (C.D.
Cal. July 17, 2006)).]

13

ALTRES argues that the split in circuits does not
matter because, even under Delight Wholesale’s deferential
approach, the EEOC’s actions in this case were insufficient.
[Id. at 14.]

It contends that the EEOC did not conciliate as to

the unnamed class of “aggrieved individuals” it claims to
represent; rather, it identified only two employees who were
similarly situated to Colletto.

ALTRES cites to EEOC v. CRST Van

Expedited, Inc., 670 F.3d 897 (8th Cir. 2012),1 for the
proposition that the EEOC’s failure to identify the total number
of employees who were similarly situated to the charging party
was a failure to conciliate on their behalf before filing suit.
[Id. at 15.]

ALTRES contends that “the EEOC must discover such

individuals and wrongdoing during the course of its
investigation.”

[Id. at 16 (quoting Dillard’s Inc., 2011 WL

2784516) (emphasis ALTRES’s).]

ALTRES argues that, because the

EEOC failed to identify or conciliate on behalf of employees
other than Subia and Sanchez, the EEOC should be precluded from
trying to represent a larger “class” of employees.

[Id. at 17

(citing EEOC v. Bruno’s Rest., 13 F.3d 285, 288 (9th Cir.
1993)).]

1

Subsequent to the filing of the ALTRES Motion, the
February 22, 2012 decision was vacated and superseded on
rehearing by EEOC v. CRST Van Expedited, Inc., 679 F.3d 657 (8th
Cir. May 8, 2012).
14

2.

Conclusory Allegations

ALTRES argues that the Complaint contains conclusory
statements rather than facts.

It invokes Rule 8(a)(2) of the

Federal Rules of Civil Procedure, which requires that a
“‘plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.’”

[Id. at 18 (quoting Caviness v. Horizon

Cmty. Learning Ctr., Inc., 590 F.3d 806, 812 (9th Cir. 2010)).]
3.

Failure to State a Title VII Claim

ALTRES contends that the Complaint fails to allege
facts to support a cognizable theory under Title VII.

First, it

argues that the EEOC does not provide facts showing that ALTRES
and La Rana are joint employers.

It argues that the EEOC “lumps

together ‘Defendants’ owner[s], high level executives, management
and employees.’”

[Id. at 21.]

Rather, “the employer charged

with discrimination under Title VII must have been the
plaintiff’s functional employer at the time of the alleged
discrimination for plaintiff to prevail.”

[Id. at 21 (citing

City of Los Angeles v. Manhart, 435 U.S. 702, 718 n.33 (1978)).]
Joint-employer liability may be shown where “‘both employers
control the terms and conditions of employment of the employee.’”
[Id. (quoting EEOC v. Pac. Mar. Ass’n, 351 F.3d 1270, 1275 (9th
Cir. 2003)).]

ALTRES asserts that the Ninth Circuit “consider[s]

all factors relevant to the particular situation” in an “economic

15

reality test.”
1275).]

[Id. (quoting Pac. Mar. Ass’n, 351 F.3d at

Considerations include: “whether the joint employer (1)

supervised the employee, (2) had the power to hire and fire him,
(3) had the power to discipline him, and (4) supervised,
monitored, and/or controlled his work site.”

[Id. at 21-22

(citing Pac. Mar. Ass’n, 351 F.3d at 1277).]
ALTRES argues that the Complaint does not specifically
allege that it “harassed, discriminated against, or retaliated
against the Claimants.

Instead, ALTRES is implicated solely by

virtue of a few threadbare and conclusory allegations that it is
a ‘joint employer.’”

[Id. at 22.]

ALTRES contends that the

Complaint ignores the pleading requirements of Rule 8, Bell
Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v.
Iqbal, 556 U.S. 662 (2009), by only offering conclusory
allegations against ALTRES.

It contends that “the EEOC must

allege facts sufficient to state a claim against ALTRES as a
joint employer under the Ninth Circuit’s economic reality test.”
[Id. at 23.]

It also argues that allegations in the Complaint

contradict each other.

[Id. at 23-24.]

Second, ALTRES argues that the Complaint fails to
sufficiently allege that the Claimants were subjected to
disparate treatment or sexual harassment by ALTRES.

Regarding

disparate treatment, ALTRES claims that the EEOC must prove a
“causal connection” between an employee’s protected status and

16

the adverse employment action.

[Id. at 25 (citing McDonnell

Douglas Corp. v. Green, 411 U.S. 792, 801-02 (1973)).]

The

employee must show that the employer had a discriminatory motive.
[Id.]

Regarding hostile work environment, ALTRES argues that an

employee must show that “the workplace is permeated with
‘discriminatory intimidation, ridicule, and insult’ that is
‘sufficiently severe or pervasive to alter the conditions of the
victim’s employment and create an abusive working environment.’”
[Id. (quoting Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101,
115-16 (2002)).]

ALTRES argues that, “[e]ven if the conduct is

severe or pervasive, harassment is actionable only if it is
directed at an employee ‘because of’ a protected status defined
by Title VII.”

[Id. at 26 (citing Oncale v. Sundowner Offshore

Servs., Inc., 523 U.S. 75, 80-81 (1998); Ross v. Douglas Cnty.,
234 F.3d 391, 396 (8th Cir. 2000)).]

Harassment and offensive

behavior caused by personality conflicts, work-related conflicts,
and general meanness are not actionable under employment
discrimination laws.

[Id. (some citations omitted) (citing

Palesch v. Missouri Comm’n on Human Rights, 233 F.3d 560, 566-67
(8th Cir. 2000)).]
ALTRES contends that the EEOC “does not allege that the
adverse actions complained of occurred ‘because of’ the
Claimant’s protected status. . . .

[T]he EEOC alleges no facts

to support its claim that the Claimants were treated differently

17

because of their sex.”

[Id. at 27-28.]

ALTRES argues that the

Complaint’s failure to allege the identity of the alleged
perpetrators or dates on which the harassment occurred warrants
dismissal.

[Id. at 28 (citing Taylor v. Donley, No. CIV S-08-

0869 JAM DAD PS, 2012 WL 292841, at *14 (E.D. Cal. Jan. 31,
2012)).]

The Complaint additionally fails to identify the

frequency of the unwelcome conduct, other than to allege that the
sexual conduct was “pervasive” because it “occurred on a daily
basis.”

[Id. (quoting Complaint at ¶ 20(c)).]

ALTRES contends

that these claims do not show that the EEOC is entitled to
relief.

[Id. at 29.]
Third, regarding retaliation, ALTRES contends that the

Complaint “fail[s] to allege any facts supporting the conclusory
statement that the Claimants ‘complained’ of ‘unlawful sexual
harassment.’”

[Id. at 29-30 (quoting Complaint at ¶ 21).]

ALTRES alleges that, because the Complaint fails to put forth a
cognizable theory of discrimination or harassment, “even if
female employees complained about alleged comments or conduct in
the workplace, the allegations are insufficient to conclude that
they have been opposing ‘any practice made an unlawful employment
practice’ under Title VII or participating in a proceeding under
Title VII.”

[Id. at 30 (citing 24 U.S.C. § 2000e-3(a);

Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 56
(2006)) (emphasis ALTRES’s).]

18

Fourth, ALTRES argues that the Complaint offers no
facts to support its allegation that ALTRES caused the Claimants
to be constructively discharged.

ALTRES contends that, although

the Complaint alleges that ALTRES “reduced the female employees’
work hours, gave them less favorable working conditions, harassed
them at work to the point of making the workplace too
intolerable[,]” the Complaint does not satisfy the specificity
requirement of Iqbal, Twombly, or Rule 8, because “it is wholly
conclusory and fails to establish that any Claimant was compelled
to resign.”

[Id. (quoting Complaint at ¶ 21; EEOC v. Bimbo

Bakeries USA, Inc., Civil No. 1:09-CV-1872, 2010 WL 598641 (M.D.
Pa. Feb. 17, 2010)).]
B.

Memorandum in Opposition
1.

Jurisdiction

In opposition to the ALTRES Motion, the EEOC argues
that “this Court has subject matter jurisdiction over the instant
action as this action involves (1) a federal question under
federal statutes, and (2) the plaintiff in this case is an agency
of the United States.

The instant lawsuit is a government

enforcement action brought by the EEOC pursuant to federal
statute.”

[Mem. in Opp. to ALTRES Motion at 14.]

Moreover,

ALTRES claims that Congress specifically conferred jurisdiction
of the EEOC’s enforcement action on this Court by Sections
706(f)(1) and (3) of Title VII.

[Id. (citing 42 U.S.C. § 2000e-

19

5(f); Arbaugh v. Y & H Corp., 546 U.S. 500 (2006)).]
The EEOC next argues that the conciliation requirement
is not a jurisdictional prerequisite.

It contends that, although

ALTRES relies on EEOC v. Pierce Packing Co., 669 F.2d 604, 607
(9th Cir. 1982), subsequent Supreme Court authority casts doubt
on the validity of Pierce Packing.

In Arbaugh v. Y & H Corp.,

546 U.S. 500, 503 (2006), the Supreme Court articulated:
an interpretive approach for determining
whether a provision of Title VII is a
jurisdictional prerequisite impacting the
court’s subject matter jurisdiction.
Specifically, the Arbaugh court imposed the
requirement that prior to a judicial finding
that a requirement is a jurisdictional
prerequisite, a court find clear
congressional intent and statutory language
regarding jurisdiction.
[Mem. in Opp. to ALTRES Motion at 16.]
The EEOC argues that the Supreme Court’s decision in
Arbaugh “compels a finding that the conciliation requirement is
not a jurisdictional prerequisite as there is no clear
congressional intent nor is there any plain language in the
conciliation provision that would make the conciliation
requirement jurisdictional.”

[Id.]

The EEOC contends that the

language of the conciliation provision2 does not evidence a

2

42 U.S.C. § 2000e-5(b) provides: “If the Commission
determines after such investigation that there is a reasonable
cause to believe that the charge is true, the Commission shall
endeavor to eliminate any such alleged unlawful employment
practice by informal methods of conference, conciliation, and
(continued...)
20

congressional intent to make the requirement jurisdictional and
is separate from the jurisdictional provisions in Title VII.
[Id. at 17-18.]

The Ninth Circuit has not addressed this issue

subsequent to Arbaugh, but the EEOC argues that other circuits
have addressed the conciliation requirement or similar
requirements and found that they are not jurisdictional
requirements.

[Id. at 18 (citations omitted).]

The EEOC

represents that the Fifth Circuit is the only circuit to analyze
specifically whether the conciliation requirement is a
jurisdictional prerequisite under Arbaugh in EEOC v. Agro
Distribution, LLC, 555 F.3d 462, 469 (5th Cir. 2009).

[Id.]

In

that case, the Fifth Circuit held that there was no clear
congressional intent or language that would make the conciliation
provision a jurisdictional limitation.

[Id. at 18-19 (some

citations omitted) (citing Agro Distrib., 555 F.3d at 469).]

The

EEOC also cites to a Sixth Circuit case, relying on Arbaugh, that
held that another Title VII pre-suit requirement was not
jurisdictional.

[Id. at 19 (citing Allen v. Highlands Hosp.

Corp., 545 F.3d 387, 400-02 (6th Cir. 2008)).]
The EEOC argues that, since the filing of the ALTRES
Motion, the interpretive approach has been embraced by several
districts within the Ninth Circuit, including the District of

2

(...continued)
persuasion.”
21

Hawai‘i in EEOC v. Global Horizons, Inc., Cv. No. 11-00257 DAERLP, 2012 WL 928160 (D. Hawai‘i Mar. 16, 2012), the Eastern
District of California, the District of Nevada, and the Eastern
District of Washington.
2.

[Id. at 20-21 (some citations omitted).]

Good Faith Conciliation

The EEOC argues that, even if the Court finds that the
conciliation requirement is a jurisdictional requirement, it
conciliated in good faith.

It also notes in passing that, even

if it did not conciliate in good faith, the appropriate remedy is
not to dismiss this case, but to stay the case and allow the EEOC
an opportunity to fulfill its statutory obligations.

[Id. at 22

n.7 (citing EEOC v. Hometown Buffet, Inc., 481 F. Supp. 2d 1110,
1113 (S.D. Cal. 2007)).]
The EEOC notes ALTRES’s acknowledgment that district
courts within this circuit apply the Eighth Circuit’s deferential
approach in EEOC v. Delight Wholesale Co., 973 F.2d 664, 669 (8th
Cir. 1992).

Moreover, the EEOC notes that district courts in

this jurisdiction have adopted the standard of review articulated
by the Sixth Circuit.

[Id. at 23 (citing EEOC v. Keco

Industries, 748 F.2d 1097, 1102 (6th Cir. 1984) (finding that the
“EEOC must make a good faith effort to conciliate the claim.
However, once the employer rejects the conciliation attempts, the
EEOC is free to file suit under Title VII”)).]
The EEOC argues that the evidence demonstrates that it

22

conciliated in good faith, because the Letter of Determination
provided ALTRES with notice about the nature and scope of the
claim against it and invited ALTRES to conciliate the claim.

The

EEOC contends that ALTRES should have been on notice as to the
size of the purported class due to the size of the class fund.
The EEOC claims that the investigator outlined the evidentiary
basis for the EEOC’s determination in its correspondence with
ALTRES.

[Id. at 24-25.]

The EEOC also contends that it

attempted to engage ALTRES in negotiations, but, when ALTRES
received the EEOC’s conciliation proposal, it inappropriately
issued a FOIA request, then subsequently only offered $10,000 on
the $200,000 demand for compensatory damages.

ALTRES also

conditioned the offer on overly onerous terms and refused to
acknowledge the class fund.

[Id. at 25-26.]

Furthermore, the EEOC argues that it is entitled to
seek relief for class members besides just Colletto.

The Ninth

Circuit recognizes the EEOC’s authority to seek relief on all
aggrieved individuals affected by an unlawful practice, including
those who did not file formal EEOC charges.

[Id. at 26 (citing

Bean v. Crocker Nat’l Bank, 600 F.2d 754, 759 (9th Cir. 1979);
EEOC v. Dillard’s, Inc., No. 08-CV-1780-IEG (PCL), 2011 WL
2784516 (S.D. Cal. July 14, 2011) (finding that the “EEOC can
seek relief for individuals situated similarly to the charging
party and is not required to identify every potential class

23

member”)).]

For example, in EEOC v. Evans Fruit Co., No. CV-10-

3033-LRS, 2012 WL 1899194 (E.D. Wash. May 24, 2012), the district
court declined to adopt the Eighth Circuit’s rule in EEOC v. CRST
Van Expedited, Inc., 679 F.3d 657 (8th Cir. 2012), and instead
held that it was “not persuaded the Ninth Circuit would adopt a
rule that the EEOC must specifically identify, investigate and
conciliate each alleged victim of discrimination before filing
suit.”

2012 WL 1899194, at *3.

The district court proceeded to

find that the EEOC’s pre-litigation efforts were sufficient to
put the defendant on notice of the class, even though the exact
number of class members remained unknown.

Id.

The EEOC argues

that, similarly, ALTRES has always been on notice of the class.
3.

Sufficiency of Facts Pled

The EEOC argues that dismissal is not warranted under
Rule 12(b)(6), because it sufficiently pled allegations against
ALTRES.3

It requests that, if the Court does find any deficiency

in the Complaint, it grant the EEOC leave to amend the Complaint.
The EEOC argues that it properly pled that ALTRES is
liable for discrimination as a joint employer.

It argues that

joint employer liability under Title VII is demonstrated where

3

The EEOC argues that the Declaration of Don Huynh,
attached to the ALTRES Motion, is inappropriate for consideration
under Rule 12(b)(6), as it is outside the scope of information
that can be considered on a motion to dismiss. Moreover, that
declaration is factually inaccurate, as the EEOC did interview
Colletto during its investigation. [Mem. in Opp. to ALTRES
Motion at 30.]
24

“‘both employers control the terms and conditions of employment
of the employee.’”

[Id. at 31 (quoting EEOC v. Pac. Mar. Ass’n,

351 F.3d 1270, 1275-77 (9th Cir. 2003)).]

It contends that the

Complaint clearly articulates the reason the EEOC filed suit
against both employers: “At all relevant times, Defendant ALTRES
has continually been under contract with Defendant Senor Frog’s
for services rendered, and has continuously been a joint employer
with Defendant Senor Frog’s where both generally controlled the
terms and conditions of the employment of the Claimants.”
(quoting Complaint at ¶ 8).]

[Id.

Regarding claims against ALTRES,

the Complaint alleges that ALTRES was responsible for sexual
harassment policies and employment regulations, conducted an
internal investigation in response to the charge of
discrimination, and made recommendations to Senor Frog’s.
at 32 (citing Complaint at ¶ 8(c)).]

[Id.

The Complaint also alleges

that the Charge had been filed against both Defendants, the EEOC
investigated both Defendants, the Letter of Determination was
issued to both Defendants, and both Defendants were invited to
participate in conciliation.

[Id. (citing Complaint at ¶¶ 12-

18).]
The EEOC argues that it properly pled that the class
members were victims of discrimination on the basis of their sex.
It rejects ALTRES’s argument that the Complaint did not allege
discrimination “because of” sex, because the Complaint utilized

25

that terminology and it is clear that this action was brought on
behalf of a class of females to address sexual harassment and
disparate treatment.

[Id. at 33.]

Regarding the frequency of

the discrimination, the Complaint pled that “the offensive sexual
conduct ‘occurred on a daily basis.’”
Complaint at ¶ 20(c)).]

[Id. at 34 (quoting

Regarding the identity of the harassers,

the Complaint properly pled that they were members of “high level
executives and/or management” and “Defendants’ owner, high level
executives, management and employees.”

[Id. (quoting Complaint

at ¶¶ 20).]
The EEOC also argues that it properly pled that ALTRES
retaliated against the class members.

The Complaint states that

“Charging Party and other female employees engaged in a protected
activity when each opposed the unlawful sexual harassment by
complaining about it to the Defendants Employers’ management
officials and requesting they take action to stop it.”
[Complaint at ¶ 21(a).]

The Complaint describes how the female

employees faced retaliation for their opposition to sexual
harassment by identifying the adverse actions taken by
management.

[Mem. in Opp. to ALTRES Motion at 36.]

The EEOC contends that the Complaint alleges sufficient
facts regarding its claim of constructive discharge.

It argues

that constructive discharge is not a separate claim, but is a
part of the larger claim of discrimination.

26

[Id. (citing

Complaint at ¶ 20).]

For example, the Complaint alleges that the

Claimants were “harassed . . . at work to the point of making the
workplace too intolerable to work” and that the Claimants were
subjected to “conditions too intolerable to continue working[.]”
[Id. at 37 (quoting Complaint at ¶ 21(b), (c)).]

The EEOC

clarifies that its claim of constructive discharge is also a part
of a larger claim of discrimination that spans three pages,
rather than a stand-alone claim.

[Id.]

Finally, regarding conciliation, the EEOC argues that
it need only plead generally its conciliation efforts.

[Id. at

38 (citing Fed. R. Civ. P. 9(c); EEOC v. Global Horizons, Inc.,
Cv. No. 11-00257 DAE-RLP, 2012 WL 928160, at *5 (D. Hawai‘i Mar.
16, 2012)).]

It alleges that it adequately pled the conciliation

efforts, including Colletto’s Charge, the EEOC investigation, the
Letter of Determination, and its attempts to eliminate the
unlawful employment practices at issue.
C.

[Id. at 39.]

Reply
1.

Jurisdiction

ALTRES argues that the EEOC’s failure to conciliate is
a proper basis for dismissal on jurisdictional grounds.

The

Ninth Circuit stated: “Conciliation is ‘a jurisdictional
condition[] precedent to suit by the EEOC.’

EEOC v. Pierce

Packing Co., 669 F.2d 605, 608 (9th Cir. 1982).”

[Reply to

ALTRES Motion at 1 (quoting EEOC v. Bruno’s Rest., 13 F.3d 285,

27

288 (9th Cir. 1982)).]

It argues that the Supreme Court’s

decision in Arbaugh v. Y & H Corp., 546 U.S. 500 (2006), does not
affect this conclusion.

Arbaugh only addressed whether the

employee-numerosity threshold was a jurisdictional prerequisite,
[Id. at 2.]

but did not address the conciliation requirement.

ALTRES contends that, although United States District
Judge David Alan Ezra opined in Global Horizons that Arbaugh
casts doubt on the proposition that conciliation is a
jurisdictional prerequisite, it is clear that “‘[a] decision of a
federal district court judge is not binding precedent in either a
different judicial district, the same judicial district, or even
upon the same judge in a different case.’”

[Id. at 3 (quoting

Camreta v. Greene, 131 S. Ct. 2020, 2033 (2011)).]

It also

argues that Judge Ezra’s departure from Pierce Packing is
improper, as he is bound by the Ninth Circuit’s decision until
that case is overturned by the circuit court sitting en banc or
the Supreme Court.

[Id. at 3-4.]

Moreover, it is not clear that

the Ninth Circuit would disturb Pierce Packing in light of
Arbaugh, as the Ninth Circuit has, in at least one instance,
distinguished Arbaugh.

[Id. at 4 (citing Fleming v. Yuma Reg’l

Med. Ctr., 587 F.3d 938, 945 (9th Cir. 2009)).]

ALTRES contends

that, unless and until the Ninth Circuit revisits Pierce Packing,
this Court is bound to faithfully apply Pierce Packing and
conclude that: (1) conciliation is a jurisdictional requirement;

28

and (2) the failure to conciliate is a basis for dismissal.

[Id.

at 5.]
2.

Conciliation Process

Regarding the conciliation process, ALTRES argues that
the EEOC undermined the process by refusing to provide
information necessary to assess the class claims.

ALTRES

contends that, as evidenced by the correspondence between the
EEOC and ALTRES, ALTRES was willing to negotiate and requested
information on the size of the class and identity of the
Claimants, but the EEOC refused to cooperate.

[Id. at 5-6

(citing ALTRES Motion, Pepper Decl., Exhs. 4, 5).]

ALTRES argues

that the EEOC did not dispute that it failed to identify the
purported class of Claimants, which, ALTRES contends, is a
failure to conciliate.

[Id. at 6.]

ALTRES argues that Title VII includes procedures to
give an employer adequate notice of the nature of the charges
against it and an opportunity to resolve the charges through
conciliation.

[Id. at 7 (some citations omitted) (quoting EEOC

v. Outback Steak House of Fla., Inc., 520 F. Supp. 2d 1250, 1262
(D. Colo. 2007)).]

It argues that violations uncovered during

the EEOC’s investigation are actionable, but the EEOC “may not
use discovery in the resulting lawsuit as a fishing expedition to
uncover more violations.”

[Id. (quoting EEOC v. CRST Van

Expedited, Inc., 679 F.3d 657, 675 (8th Cir. 2012) (“CRST”)).]

29

Particularly, in actions requesting backpay, the EEOC must
identify specific class members and offer an explanation of
damages sought.

[Id. at 8 (citations omitted).]

In CRST, the

Eighth Circuit held that the EEOC’s failure to discover sixtyseven women during its administrative investigation and to
disclose those individuals during the conciliation process
warranted the dismissal of their claims, as “‘the EEOC wholly
failed to satisfy its statutory pre-suit obligations.’”
(quoting 679 F.3d at 675-76).]

[Id.

Similarly, the district court in

EEOC v. First Midwest Bank, N.A., 14 F. Supp. 2d 1028 (N.D. Ill.
1998), found that the EEOC’s presentment of a settlement figure
without providing information related to the class of female
employees or the calculation of damages forced the employer “to
make a conciliation proposal in an evidentiary vacuum” and was a
failure to engage in a “‘sincere and reasonable effort’” to
conciliate.

[Id. at 10 (quoting 14 F. Supp. 2d at 1032-33).]

In EEOC v. Dillard’s Inc., No. 08-CV-1780-IEG (PCL),
2011 WL 2784516 (S.D. Cal. July 14, 2011), relied upon by the
EEOC, although the district court concluded that the EEOC was not
required to identify every potential class member, the court
further instructed that “‘the EEOC must discover such individuals
and wrongdoing during the course of its investigation.’”

[Id. at

12 (quoting 2011 WL 2784516, at *6) (emphasis omitted).]

The

court held that, although the claims could proceed, the EEOC

30

could not “use discovery in the resulting lawsuit ‘as a fishing
expedition’ to uncover more violations” that had not been
previously identified or conciliated.

[Id. (quoting 2011 WL

2784516, at *7).]
ALTRES argues that, when taken as a whole, the various
cases show that the EEOC’s claims must be limited to the “alleged
violations and allegedly aggrieved individuals it discovered
during its pre-lawsuit investigation. . . .

Indeed, when the

EEOC demands a large settlement based on nothing more than vague,
conclusory allegations, the employer is trapped in an
‘evidentiary vacuum’ and can neither investigate the claims, nor
reasonably assess the EEOC’s settlement offer.”

[Id.]

It

asserts that the EEOC’s failure to explain the size of the class
and identify the individuals in that class is a failure to
conciliate.

[Id. at 13 (citing EEOC v. Evans Fruit Co., No. CV-

10-3033-LRS, 2012 WL 1899194 (E.D. Wash. May 24, 2012) (a “good
faith” attempt at conciliation requires “some justification for
the amount of damages sought, potential size of the class,
general temporal scope of the allegations, and the potential
number of individuals”)).]
3.

Failure to State a Claim

Finally, ALTRES argues that the EEOC did not
meaningfully respond to its arguments regarding the sufficiency
of the Complaint under the Twombly and Iqbal standard, but rather

31

forwarded arguments under the “no set of facts” standard in
Conley v. Gibson, 355 U.S. 41 (1957).

[Id. at 14.]

ALTRES

further argues that the EEOC failed to address the joint-employer
argument in light of Doe I. v. Wal-Mart Stores, Inc., 572 F.3d
677, 682-83 (9th Cir. 2009), King v. Corcoran State Prison, No.
1:10-cv-00878-LJO-SKO, 2011 WL 2295035 (E.D. Cal. June 8, 2011),
and Thomas v. Farley, 31 F.3d 557, 558-59 (7th Cir. 1994).
Rather, the EEOC simply repeats the allegations in the Complaint.
Moreover, ALTRES argues that the EEOC fails to respond to
ALTRES’s arguments that the EEOC cannot base its claim of sexual
harassment on an aggregate of all conduct across an unspecific
group of claimants by unspecified perpetrators.
IV.

[Id. at 14-15.]

La Rana Motion
A.

Motion
1.

Conciliation

La Rana first argues that the Court lacks subject
matter jurisdiction, because the EEOC failed to fulfill the
statutory prerequisites when it did not provide sufficient notice
as to the “class” or engage in the conciliation process in good
faith.

La Rana cites to Pierce Packing for the proposition that

the pre-litigation requirements are jurisdictional limitations
that can prevent the EEOC from pursuing this action.

[Mem. in

Supp. of La Rana Motion at 17-18.]
La Rana contends that the EEOC did not conciliate in

32

good faith.

Although there are different tests for “good faith”

conciliation, La Rana argues that the Court should examine the
EEOC’s conduct “to see if it attempted to conciliate in a manner
which demonstrated a willingness to work toward settlement and a
fundamental element of working toward settlement is providing a
reasonable amount of information to make settlement a
possibility.”

[Id. at 19-20 (citing EEOC v. High Speed Enter.,

Inc., No. CV-08-01789-PHX-ROS, 2010 WL 8367452, at *5 (D. Ariz.
Sept. 30, 2010)).]
La Rana relies on EEOC v. Bloomberg, L.P., 751 F. Supp.
2d 628 (S.D.N.Y. 2010), in which the court found that, after a
five-month conciliation process, “the EEOC failed to meet the
requirement that it respond in a reasonable and flexible manner
to the employer in conciliation,” because, after demanding a
large sum of money, the EEOC had “stonewalled” the employer’s
“plainly reasonable” requests to obtain further information.
at 641.

That court stated:
The Court concludes that the EEOC’s position,
in these circumstances, does not embody a
“reasonable and flexible” response to the
“reasonable attitudes” of the employer.
The EEOC focused on Bloomberg’s failure
to provide any “monetary offer to settle” the
claims to the exclusion of other
considerations. In this context, this
inflexibility represented a
“take-it-or-leave-it demand.” The EEOC did
not respond to Bloomberg’s initial letter
asking for more information, and its ultimate
response to such requests was to refuse to
33

Id.

provide any further information. In a
complex case like this one, the EEOC cannot,
when the employer reasonably asks for
information to formulate a monetary
counteroffer, make substantial monetary
demands and require employers simply to pony
up or face a lawsuit. The EEOC’s approach
suggests, in the back-and-forth that
transpired here, that the EEOC was not making
a sincere effort to conciliate the claims.
Id. at 642 (internal citations omitted); see High Speed Enter.,
2010 WL 8367452, at *5 (“[t]he EEOC’s refusal to offer any
meaningful explanation of how it calculated [Claimant’s] damages,
despite repeated requests from Defendant, prevented Defendant
from being able to fully participate in the conciliation
process”).
La Rana argues that, as in Bloomberg, the EEOC’s
conciliation efforts in the present case “consisted of demanding
a large class fund for an unknown and potentially non-existent
number of ‘class’ claimants - which the EEOC would then give to a
charity of its choosing if it could not find additional Claimants
- yet the EEOC refused to provide any meaningful information on
the size and scope of the class.”

[Mem. in Supp. of La Rana

Motion at 22 (citing Petrus Decl., Exh. D).]

La Rana argues that

the EEOC did not conciliate in good faith because it continually
rejected La Rana’s reasonable requests for information regarding
the purported claimants.

La Rana contends that, conversely, it

continually exhibited the intent to conciliate with the EEOC, as
evidenced by its “significant” settlement offer.
34

[Mem. in Supp.

of La Rana Motion at 22-23.]

In the face of that offer and an

expressed desire to continue the conciliation process, the EEOC
terminated conciliation because such efforts were “futile.”

La

Rana contends that “the EEOC’s conciliation efforts consisted of
rebuffing La Rana’s reasonable requests for information, . . .
and continually proffering ‘take-it-or-leave-it’ conciliation
offers[.]”

[Id. at 24 (internal citations omitted).]
La Rana next argues that, even if the EEOC conciliated

in good faith, it may only seek relief for the identified class
members discovered in the course of the investigation of the
Charge.

[Id. at 24-25 (citing Dillard’s, 2011 WL 2784516, at *6

(“[e]ach step along the administrative path - from charge to
investigation and from investigation to lawsuit - must grow out
of the one before it.”); CRST, 670 F.3d at 916 (“Absent an
investigation and reasonable cause determination apprising the
employer of the charges lodged against it, the employer has no
meaningful opportunity to conciliate.”)).]

The EEOC’s Letter of

Determination indicated that it had not discovered specific
claimants during its investigation, and the EEOC admitted that it
had not discovered any additional class members.

Thus, the EEOC

did not discover specific claimants during the investigation, and
it only discovered three claimants prior to ending conciliation.
La Rana requests that the Court dismiss the Complaint for failing
to discover the class members during its investigation, or limit

35

relief to the three class members it discovered prior to filing
the Complaint.
2.

[Id. at 27.]
Failure to Plead Constructive Discharge

La Rana argues that the discrimination and retaliation
claims should be dismissed for failure to properly plead
constructive discharge as an element of the claims.

[Id. (citing

Dawson v. Entek Int’l, 630 F.3d 928, 936 (9th Cir. 2011) (to
establish a prima facie retaliation claim, “the employee must
show that he engaged in a protected activity, he was subsequently
subjected to an adverse employment action, and that a causal link
exists between the two”); Tanaka v. Dep’t of Accounting & Gen.
Servs., Civil. No. 09-00579 SOM/KSC, 2011 WL 1598718, at *5 (D.
Hawai‘i Apr. 27, 2011)).]
La Rana argues that the EEOC’s allegations of
constructive discharge are conclusory allegations prohibited by
Rule 8 and fail to provide any factual allegation that the
Claimants had no reasonable alternative except to quit.

[Id. at

29 (citing Helgeson v. Am. Int’l Group, Inc., 44 F. Supp. 2d
1091, 1100 (S.D. Cal. 1999)).]

It contends that the factual

allegations relating to constructive discharge pertain only to
Colletto, who is not a Claimant in the present action.
30 n.5.]

[Id. at

Thus, because “the EEOC proffers no specific facts

supporting that the Claimants were constructively discharged,
these conclusory statements of law are insufficient to establish

36

a plausible constructive discharge claim.”

B.

[Id. at 29-30.]

Memorandum in Opposition
In opposition to the La Rana Motion, the EEOC recites

virtually verbatim its opposition to the ALTRES Motion, with only
two substantive differences.
First, the EEOC addresses La Rana’s reliance on
Bloomberg, arguing that that case was analyzed under the summary
judgment standard, rather than a Rule 12 motion to dismiss
standard.

The Bloomberg court also held that, although the EEOC

had not conciliated appropriately regarding the retaliation
claim, it had properly conciliated the discrimination claim.
Regarding the requisite notice to the employer, the court held
that “[t]his argument misapprehends the role notice plays in the
conciliation process.

Notice of the particulars of the

investigation is not required, and the scope of the EEOC’s
initial investigation does not limit the scope of the lawsuit
alleging Title VII violations it may later bring.”
2d at 633.

751 F. Supp.

Despite the defendant’s insistence on more

information, the EEOC’s conciliation efforts were adequate,
because they put the defendant on notice of the class.
Opp. to La Rana Motion at 27-28.]

[Mem. in

The EEOC argues that it

conciliated in good faith in the present case, because the Letter
of Determination provided La Rana with notice of the nature and

37

scope of the claim against La Rana and invited La Rana to
conciliate the claim.

The EEOC also alleges that, in

correspondence with La Rana, it outlined the evidentiary basis
for its determination and provided information regarding its
computation for monetary relief for the class members.

[Id. at

28-29.]
Second, also regarding its good faith efforts at
conciliation, the EEOC argues that it responded to La Rana’s
concerns and requests for evidence and agreed to an in-person
meeting, despite La Rana’s failure to provide a counteroffer.
The EEOC claims that it was flexible in reducing its demand to
$100,000 per named Claimant and $350,000 for the class fund.
Thereafter, La Rana made its only “meaningful” counteroffer for
only $11,250 between the three identified claimants and $11,250
for the remaining class members.

La Rana never addressed the

EEOC’s request for injunctive relief.

As such, the EEOC claims

that it “could not reasonably believe further conciliation
efforts with Defendant would be fruitful and failed
conciliation.”
C.

[Id. at 30-31.]

Reply
La Rana first raises two preliminary matters.

First,

it takes issue with the Declaration of Amrita Mallik attached to
the memorandum in opposition.

It argues that the declaration

contains statements that lack foundation, as they relate to

38

events of which the declarant has no personal knowledge, such as
the EEOC investigation and the in-person conciliation conference.
[Reply to La Rana Motion at 1 n.1.]

Second, it argues that the

EEOC’s certificate of compliance for the memorandum in opposition
excludes pages i through vi, as the inclusion of those pages
would increase the word count to over 9,000 words as provided by
Local Rule LR7.5(b).
1.

[Id. at 1 n.2.]

Jurisdiction

La Rana argues that the plain language of 42 U.S.C.
§ 2000e-5 establishes that conciliation is a jurisdictional
prerequisite.

[Id. at 3.]

It argues that Pierce Packing

established that “[g]enuine investigation, reasonable cause
determination and conciliation are jurisdictional conditions
precedent to suit by the EEOC[,]” 669 F.2d at 608, and no
subsequent Supreme Court or Ninth Circuit case has explicitly or
impliedly overturned this decision.
4.]

[Reply to La Rana Motion at

Regarding Arbaugh v. Y & H Corp., 546 U.S. 500 (2006), La

Rana argues that the EEOC’s reliance is misplaced:
the Supreme Court found that Title VII’s “15employee threshold” for application of the
statute was not a jurisdictional requirement
because it “appears in a separate provision
that does not speak in jurisdictional terms
or refer in any way to the jurisdiction of
the district courts.” [Arbaugh,] 546 U.S.
500, 55 (2006). Notably, the Arbaugh
decision did not address the EEOC’s prelitigation obligations, and it “made no broad
statement about all of Title VII’s prelitigation requirements.” [EEOC v.
39

Dillard’s, Inc., Case No. 08-CV-1780-IEG
(PCL), 2011 WL 2784516, at *4 n.2 (S.D. Cal.
2011).]
[Reply to La Rana Motion at 5.]
La Rana argues that, to determine whether a prelitigation requirement is jurisdictional, Reed Elsevier, Inc. v.
Muchnick, 130 S. Ct. 1237 (2010), requires an examination of four
factors.

In addition to the inquiry into the statutory language

discussed in Arbaugh, the Court must also consider “the location
of the pre-litigation requirement in relation to the statute’s
jurisdictional provision,” “the overall framework of the
statute,” and “whether the prerequisite is a type of limitation
that the Supreme Court or Congress has historically treated as
jurisdictional in nature[.]”

[Reply to La Rana Motion at 5-6

(citing Reed Elsevier, Inc., 130 S. Ct. at 1245-48).]

It argues

that the present case satisfies all four factors: as to the first
two, the statute states that the conciliation requirement is
jurisdictional; [id. at 6-7 (citing § 2000e-5(f)(1) (“If . . .
the Commission has been unable to secure . . . a conciliation
agreement . . . the Commission may bring a civil action against
any respondent”); § 2000e-5(f)(3) (“Each United States district
court . . . shall have jurisdiction of actions brought under this
subchapter.”));] the context of Title VII shows that Congress
intended to require the EEOC to conciliate in good faith before
filing suit; [id. at 7;] and courts in the Ninth Circuit have

40

treated conciliation as a jurisdictional requirement [id. 8
(citing Pierce Packing, 669 F.2d at 609; Dillard’s, 2011 WL
2784516)].
2.

Conciliation in Good Faith

La Rana argues that the EEOC failed to conciliate in
good faith and it cannot meet its obligations by merely
attempting to conciliate.

La Rana contends that, even under the

“deferential” standard urged by the EEOC, its “take it or leave
it” offer was not in good faith and did not encourage settlement.
La Rana urges the Court to look at the substance of the EEOC’s
conciliation efforts.

La Rana argues that the conciliation

process in question only involved the EEOC’s refusal to provide
information and its termination of the conciliation efforts in
the face of La Rana’s settlement offer.
3.

[Id. at 10-13.]

Limitation to Disclosed Claimants

La Rana argues that the EEOC’s claims should be limited
to Claimants who were disclosed during conciliation and urges the
Court to adopt the Eighth Circuit’s rule in CRST.
4.

[Id. at 16.]

Constructive Discharge

La Rana argues that the claims regarding constructive
discharge “are the type of generalized, conclusory allegations
that are insufficient to satisfy FRCP Rule 8.”

[Id. at 17.]

La

Rana argues that such claims are insufficient, and the EEOC must
establish that the employee actually quit.

41

[Id. at 18.]

42

STANDARDS
A.

Rule 12(b)(6)
Federal Rule of Civil Procedure 12(b)(6) permits the

dismissal of a claim for “failure to state a claim upon which
relief can be granted[.]”
Under Rule 12(b)(6), review is generally
limited to the contents of the complaint.
Sprewell v. Golden State Warriors, 266 F.3d
979, 988 (9th Cir. 2001). If matters outside
the pleadings are considered, the Rule
12(b)(6) motion is treated as one for summary
judgment. See Keams v. Tempe Tech. Inst.,
Inc., 110 F.3d 44, 46 (9th Cir. 1997);
Anderson v. Angelone, 86 F.3d 932, 934 (9th
Cir. 1996). However, courts may “consider
certain materials-documents attached to the
complaint, documents incorporated by
reference in the complaint, or matters of
judicial notice-without converting the motion
to dismiss into a motion for summary
judgment.” United States v. Ritchie, 342
F.3d 903, 908 (9th Cir. 2003).
On a Rule 12(b)(6) motion to dismiss,
all allegations of material fact are taken as
true and construed in the light most
favorable to the nonmoving party. Fed’n of
African Am. Contractors v. City of Oakland,
96 F.3d 1204, 1207 (9th Cir. 1996). To
survive a motion to dismiss, a complaint must
contain sufficient factual matter to “state a
claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929
(2007). “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.” Ashcroft v. Iqbal,
--- U.S. ----, 129 S. Ct. 1937, 1949, 173 L.
Ed. 2d 868 (2009). “Threadbare recitals of
the elements of a cause of action, supported
by mere conclusory statements, do not
43

suffice.” Id. (citing Twombly, 550 U.S. at
554, 127 S. Ct. 1955).
Hawaii Motorsports Inv., Inc. v. Clayton Group Servs., Inc., 693
F. Supp. 2d 1192, 1195-96 (D. Hawai`i 2010).
B.

Rule 12(b)(1)
A motion to dismiss for lack of subject matter

jurisdiction under Rule 12(b)(1) may either attack the
allegations of the complaint as insufficient to confer upon the
court subject matter jurisdiction, or attack the existence of
subject matter jurisdiction in fact.

Thornhill Publ’g Co. v.

Gen. Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979).
When the motion to dismiss attacks the allegations of the
complaint as insufficient to confer subject matter jurisdiction,
all allegations of material fact are taken as true and construed
in the light most favorable to the nonmoving party.

Fed’n of

African Am. Contractors v. City of Oakland, 96 F.3d 1204, 1207
(9th Cir. 1996).

When the motion to dismiss is a factual attack

on subject matter jurisdiction, however, no presumptive
truthfulness attaches to the plaintiff’s allegations, and the
existence of disputed material facts will not preclude the trial
court from evaluating for itself the existence of subject matter
jurisdiction in fact.

Thornhill, 594 F.2d at 733.

44

DISCUSSION
I.

Conciliation
A.

Jurisdictional Requirement
The Court first addresses Defendants’ challenge to the

Court’s subject matter jurisdiction over the present action.
Regarding the pre-suit conciliation provision, Title VII states:
“If the Commission determines after such investigation that there
is reasonable cause to believe that the charge is true, the
Commission shall endeavor to eliminate any such alleged unlawful
employment practice by informal methods of conference,
conciliation, and persuasion.”

42 U.S.C. § 2000e-5(b).

Regarding the EEOC’s ability to file suit thereafter, the
relevant section of Title VII states:
(1) If within thirty days after a charge is
filed with the Commission or within thirty
days after expiration of any period of
reference under subsection (c) or (d) of this
section, the Commission has been unable to
secure from the respondent a conciliation
agreement acceptable to the Commission, the
Commission may bring a civil action against
any respondent not a government, governmental
agency, or political subdivision named in the
charge. . . .
. . . .
(3) Each United States district court and
each United States court of a place subject
to the jurisdiction of the United States
shall have jurisdiction of actions brought
under this subchapter. Such an action may be
brought in any judicial district in the State
in which the unlawful employment practice is
alleged to have been committed . . . .
45

42 U.S.C. § 2000e-5(f).
In EEOC v. Pierce Packing Co., 669 F.2d 605 (9th Cir.
1982), the Ninth Circuit explicitly construed § 2000e-5 as
requiring conciliation as a jurisdictional prerequisite:
Title VII of the Civil Rights Act of
1964 conferred upon the EEOC only the powers
of investigation and conciliation. A 1972
amendment empowered the agency to commence
civil suits in its own name. 42 U.S.C.
§ 2000e-5(f)(1). There are several
conditions precedent however, which the
agency must satisfy before it may bring suit.
See, e.g., EEOC v. Container Corp. of
America, 352 F. Supp. 262, 265 (M.D. Fla.
1972); EEOC v. Allegheny Airlines, 436 F.
Supp. 1300, 1304 (W.D. Pa. 1977); EEOC v. E.
I. DuPont de Nemours and Co., 373 F. Supp.
1321, 1333 (D. Del. 1974), aff’d, 516 F.2d
1297 (3rd Cir. 1975). The enabling act
states that: “The commission is empowered, as
hereinafter provided, to prevent any person
from engaging in any unlawful employment
practice . . .” 42 U.S.C. § 2000e-5(a).
(Emphasis added.) The initial step in a
Title VII action occurs when a charge of
unlawful employment practice is filed with
the EEOC. § 2000e-5(b). The EEOC next must
notify the alleged wrongdoer of the charge,
conduct an investigation, and determine
whether reasonable cause exists to believe
that the charge is true. Id. If reasonable
cause is not found, the charge shall be
dismissed. Id. If reasonable cause is
found, “. . . the commission shall endeavor
to eliminate any such alleged unlawful
employment practice by informal methods of
conference, conciliation, and persuasion.”
Id. If the commission determines that
further conciliation efforts would be futile
or nonproductive, it shall so notify the
respondent in writing. 29 CFR 1601.25
(1980). This notice is to apprise the
respondent of a “last chance” to conciliate.
46

See, e.g., EEOC v. Hickey-Mitchell Co., 507
F.2d 944, 948 (8th Cir. 1974). Only after
the preceding steps have been exhausted, and
the commission is unable to reach an
acceptable conciliation, may the commission
bring a civil action. 42 U.S.C.
§ 2000e-5(f)(1).
669 F.2d at 607 (emphases added).

The Ninth Circuit concluded

that “[g]enuine investigation, reasonable cause determination and
conciliation are jurisdictional conditions precedent to suit by
the EEOC . . . .”

Id. at 608.

Subsequently, the Ninth Circuit and district courts
within the circuit followed Pierce Packing’s characterization of
conciliation as a jurisdictional prerequisite:
the Ninth Circuit consistently characterizes
the EEOC’s pre-litigation requirements under
42 U.S.C. § 2000e–5(b) as jurisdictional
limitations to EEOC’s initiating civil
actions in federal court. Pierce Packing,
669 F.2d at 607 (“Genuine investigation,
reasonable cause determination and
conciliation are jurisdictional conditions
precedent to suit by the EEOC . . . .”); EEOC
v. Bruno’s Rest., 13 F.3d 285, 288 (9th Cir.
1993) (“Conciliation is a jurisdictional
condition precedent to suit by the EEOC.”);
see also Munoz v. Mabus, 630 F.3d 856, 861
n.3 (9th Cir. 2010) (noting that the EEOC
cannot “‘leapfrog[ ]’ Title VII
administrative procedures, which serve as
jurisdictional prerequisites, by bringing an
action to enforce a predetermination
settlement agreement.” (quoting Pierce
Packing, 669 F.2d at 609)). Furthermore,
district courts in this Circuit treat Title
VII’s pre-litigation requirements as
jurisdictional limitations. E.g., EEOC v.
Timeless Invs., Inc., 734 F. Supp. 2d 1035,
1051–52 (E.D. Cal. 2010); EEOC v. Cal.
Psychiatric Transitions, Inc., 725 F. Supp.
47

2d 1100, 1114–15 (E.D. Cal. 2010)
[hereinafter “Cal. Psychiatric II”]; U.S.
EEOC v. NCL Am., Inc., 536 F. Supp. 2d 1216,
1220 (D. Haw. 2008); EEOC v. Hometown Buffet,
Inc., 481 F. Supp. 2d 1110, 1113 (S.D. Cal.
2007). This Court finds no reason to ignore
the Ninth Circuit’s statements or the clear
trend among sister courts in this Circuit.
It will therefore consider Dillard’s
challenge to the sufficiency of the EEOC’s
pre-litigation efforts under Rule 12(b)(1).
EEOC v. Dillard’s, Inc., No. 08-CV-1780-IEG (PCL), 2011 WL
2784516, at *4 (S.D. Cal. July 14, 2011) (internal footnotes
omitted).
The EEOC urges the Court to depart from Pierce Packing
and its progeny, arguing that recent cases have called into
question the validity of the Ninth Circuit’s ruling.

In Arbaugh

v. Y & H Corp., 546 U.S. 500 (2006), the United States Supreme
Court considered whether the employee-numerosity requirement in
Title VII was a prerequisite to a civil lawsuit.

The Supreme

Court stated:
The dispute now before us concerns the
proper classification of Title VII’s
statutory limitation of covered employers to
those with 15 or more employees. If the
limitation conditions subject-matter
jurisdiction, as the lower courts held it
did, then a conclusion that Y & H had fewer
than 15 employees would require erasure of
the judgment for Arbaugh entered on the jury
verdict. But if the lower courts’
subject-matter jurisdiction characterization
is incorrect, and the issue, instead,
concerns the merits of Arbaugh’s case, then Y
& H raised the employee-numerosity
requirement too late.

48

546 U.S. at 510-11.
The Court conducted a four-part inquiry and held:
Arbaugh invoked federal-question
jurisdiction under § 1331, but her case
“aris[es]” under a federal law, Title VII,
that specifies, as a prerequisite to its
application, the existence of a particular
fact, i.e., 15 or more employees. We resolve
the question whether that fact is
“jurisdictional” or relates to the “merits”
of a Title VII claim mindful of the
consequences of typing the 15-employee
threshold a determinant of subject-matter
jurisdiction, rather than an element of
Arbaugh’s claim for relief.
First, “subject-matter jurisdiction,
because it involves a court’s power to hear a
case, can never be forfeited or waived.”
United States v. Cotton, 535 U.S. 625, 630,
122 S. Ct. 1781, 152 L. Ed. 2d 860 (2002).
Moreover, courts, including this Court, have
an independent obligation to determine
whether subject-matter jurisdiction exists,
even in the absence of a challenge from any
party. Ruhrgas AG v. Marathon Oil Co., 526
U.S. 574, 583, 119 S. Ct. 1563, 143 L. Ed. 2d
760 (1999). Nothing in the text of Title VII
indicates that Congress intended courts, on
their own motion, to assure that the
employee-numerosity requirement is met.
Second, in some instances, if
subject-matter jurisdiction turns on
contested facts, the trial judge may be
authorized to review the evidence and resolve
the dispute on her own. See 5B C. Wright &
A. Miller, Federal Practice and Procedure
§ 1350, pp. 243-249 (3d ed. 2004); 2 Moore
§ 12.30[3], pp. 12-37 to 12-38. If
satisfaction of an essential element of a
claim for relief is at issue, however, the
jury is the proper trier of contested facts.
Reeves v. Sanderson Plumbing Products, Inc.,
530 U.S. 133, 150-151, 120 S. Ct. 2097, 147
L. Ed. 2d 105 (2000).
49

Third, when a federal court concludes
that it lacks subject-matter jurisdiction,
the court must dismiss the complaint in its
entirety. See 16 Moore § 106.66[1], pp.
106-88 to 106-89. Thus in the instant case,
the trial court dismissed, along with the
Title VII claim, pendent state-law claims,
see supra, at 1239-1240, fully tried by a
jury and determined on the merits, see App.
to Pet. for Cert. 23, 47. In contrast, when
a court grants a motion to dismiss for
failure to state a federal claim, the court
generally retains discretion to exercise
supplemental jurisdiction, pursuant to 28
U.S.C. § 1367, over pendent state-law claims.
See 16 Moore § 106.66 [1], pp. 106-86 to
106-89.
Of course, Congress could make the
employee-numerosity requirement
“jurisdictional,” just as it has made an
amount-in-controversy threshold an ingredient
of subject-matter jurisdiction in delineating
diversity-of-citizenship jurisdiction under
28 U.S.C. § 1332. But neither § 1331, nor
Title VII’s jurisdictional provision, 42
U.S.C. § 2000e-5(f)(3) (authorizing
jurisdiction over actions “brought under”
Title VII), specifies any threshold
ingredient akin to 28 U.S.C. § 1332’s
monetary floor. Instead, the 15-employee
threshold appears in a separate provision
that “does not speak in jurisdictional terms
or refer in any way to the jurisdiction of
the district courts.” Zipes v. Trans World
Airlines, Inc., 455 U.S. 385, 394, 102 S. Ct.
1127, 71 L. Ed. 2d 234 (1982). Given the
“unfair[ness]” and “waste of judicial
resources,” App. to Pet. for Cert. 47,
entailed in tying the employee-numerosity
requirement to subject-matter jurisdiction,
we think it the sounder course to refrain
from constricting § 1331 or Title VII’s
jurisdictional provision, 42 U.S.C.
§ 2000e-5(f)(3), and to leave the ball in
Congress’ court. If the Legislature clearly
states that a threshold limitation on a
statute’s scope shall count as
50

jurisdictional, then courts and litigants
will be duly instructed and will not be left
to wrestle with the issue. See Da Silva[ v.
Kinsho Int’l Corp., 229 F.3d 358, 361 (2d
Cir. 2000)] (“Whether a disputed matter
concerns jurisdiction or the merits (or
occasionally both) is sometimes a close
question.”). But when Congress does not rank
a statutory limitation on coverage as
jurisdictional, courts should treat the
restriction as nonjurisdictional in
character. Applying that readily
administrable bright line to this case, we
hold that the threshold number of employees
for application of Title VII is an element of
a plaintiff’s claim for relief, not a
jurisdictional issue.
Id. at 513-16 (internal footnote omitted); see also Reed
Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237, 1243-48 (2010).
Relying on Arbaugh, this district court held that the
conciliation provision is not a jurisdictional requirement:
The Ninth Circuit has held that
“[c]onciliation is a ‘jurisdictional
condition [ ] precedent to suit by the
EEOC.’” E.E.O.C. v. Bruno’s Restaurant, 13
F.3d 285, 288 (9th Cir. 1993); see also
E.E.O.C. v. Pierce Packing Co., 669 F.2d 605,
608 (9th Cir. 1982). This holding is
premised on Congress’ preference for
achieving Title VII’s objectives through
voluntary means rather than through
litigation. Pierce Packing, 669 F.2d at 608.
However, recent developments in the law have
undermined the Ninth Circuit’s rationale for
characterizing conciliation as
jurisdictional. The Supreme Court “has
implicitly rejected the notion that Congress’
preference for conciliation, while important,
is a sufficient basis in of itself for
concluding that Congress intended the
requirement to be jurisdictional.” E.E.O.C.
v. Alia Corp., ––– F. Supp. 2d ––––, ––––,
2012 WL 393510, at *6 (E.D. Cal. February 6,
51

2012); see Reed Elsevier, Inc. v. Muchnick,
––– U.S. ––––, 130 S. Ct. 1237, 1248 n.9, 176
L. Ed. 2d 18 (2010) (“We do not agree that a
condition should be ranked as jurisdictional
merely because it promotes important
congressional objectives.”); see also Arbaugh
v. Y & H Corp., 546 U.S. 500, 504, 515–516,
126 S. Ct. 1235, 163 L. Ed. 2d 1097 (2006)
(holding that Title VII’s numerosity
requirement is non-jurisdictional even though
it serves the important policy goal of
“spar[ing] very small businesses from Title
VII liability” because the statutory
provision containing the requirement “does
not speak in jurisdictional terms or in any
way refer to the jurisdiction of district
courts”). The Supreme Court has made clear
that a statutory requirement is
jurisdictional only where there is “clear
indication that Congress wanted the rule to
be jurisdictional.” Henderson v. Shinseki,
––– U.S. ––––, 131 S. Ct. 1197, 1203, 179 L.
Ed. 2d 159 (2011) (internal quotation marks
and citation omitted). Here, the statutory
provisions pertaining to Title VII’s
conciliation requirement, 42 U.S.C.
§§ 2000e–5(b) and 2000e–5(f)(1), do not
clearly indicate that conciliation is a
jurisdictional prerequisite.
EEOC v. Global Horizons, Inc., Cv. No. 11-00257 DAE-RLP, 2012 WL
928160, at *4 (D. Hawai‘i Mar. 16, 2012).
Conversely, the district court in Dillard’s rejected
the argument that Arbaugh casts doubt on conciliation as a
jurisdictional prerequisite:
The EEOC, argues the Supreme Court’s
decision in Arbaugh establishes that, as a
matter of law, none of Title VII’s
administrative prerequisites to filing suit
are jurisdictional in nature. But Arbaugh
held only that Title VII’s statutory
definition of “employer” is not a
“jurisdictional” prerequisite for the EEOC to
52

file suit, but a substantive element of a
Title VII claim. 546 U.S. at 514–16.
Arbaugh made no broad statement about all of
Title VII’s pre-litigation requirements.
Nor do the two post-Arbaugh decisions in
the Ninth Circuit cited by the EEOC. In
Fleming v. Yuma Regional Medical Center, the
Ninth Circuit held only that Arbaugh’s
finding that the fifteen-employee minimum
formed part of the “substantive” claim rather
than a jurisdictional prerequisite did not
mean that the provision was a “substantive”
rather than a “procedural” requirement for a
Title VII claim. 587 F.3d 938, 946 (9th Cir.
2009). In Swift v. Realty Executives
Nevada’s Choice, the Ninth Circuit held that,
for the same reasons that Arbaugh held Title
VII’s definition of “employer” is not a
jurisdictional prerequisite, neither is the
statute’s definition of “employee.” 211 Fed.
Appx. 571, 573 (9th Cir. Nov. 29, 2006).
Dillard’s, 2011 WL 2784516, at *4 n.2.

The district court,

however, acknowledged that there is a split among circuits
regarding this issue:
Since Arbaugh, however, there has been
some disagreement among federal courts in
other circuits as to whether Title VII’s
preconditions to the EEOC’s filing a civil
suit are jurisdictional or merely elements of
a Title VII claim. Compare, e.g., Outback,
520 F. Supp. 2d at 1262 (“Where the EEOC
fails to exhaust administrative remedies
prior to bringing a public enforcement suit
pursuant to Title VII, a court lacks subject
matter jurisdiction over the action.” (citing
EEOC v. Am. Nat’l Bank, 652 F.2d 1178, 1185
(4th Cir. 1981))); U.S. EEOC v. Lockheed
Martin Global Telecomms., Inc., 514 F. Supp.
797, 806 (D. Md. 2007) (the EEOC’s
conciliation requirement—in which “the EEOC
must outline the basis for its determination
of discrimination”—is a “jurisdictional
requirement to filing suit”); EEOC v. CSRT
53

Van Expedited, Inc., No. 07–cv–95, 2009 WL
2524402, at *19 (N.D. Iowa Aug. 13, 2009);
with EEOC v. Agro Distrib., LLC, 555 F.3d
462, 469 (5th Cir. 2009) (interpreting
Arbaugh and concluding “that the EEOC’s
conciliation requirement is a condition to
suit but not a jurisdictional
prerequisite.”); EEOC v. Hibbling Taconite
Co., 266 F.R.D. 260, 268 n.3 (D. Minn. Dec.
7, 2009) (relying on Agro Distrib.); EEOC v.
Serv. Temps, Inc., No. 3:08–CV–1 552, 2010 WL
2381499, at *1–3 & n.3 (N.D. Tex. June 11,
2010) (same).
Id. at *4 n.3.
In the absence of any controlling precedent explicitly
overturning the Ninth Circuit’s pronouncement in Pierce Packing,
this Court remains bound by the Ninth Circuit’s holding that
“[g]enuine investigation, reasonable cause determination and
conciliation are jurisdictional conditions precedent to suit by
the EEOC . . . .”

669 F.2d at 608.

Although the Court

recognizes the split in authorities - indeed, within this very
circuit - over the effect of Arbaugh and its progeny, the Ninth
Circuit has consistently construed conciliation as a
jurisdictional prerequisite.
*4.

See Dillard’s, 2011 WL 2784516, at

Arbaugh, conversely, concerned the employee-numerosity

requirement in Title VII, which is separate and apart from
conciliation, and does not disturb Pierce Packing’s holding
relating to the conciliation requirement.

That provision, 42

U.S.C. § 2000e(b), is in a section dealing with definitions,
whereas the conciliation provision, § 2000e-5(b), and the

54

provision authorizing the EEOC to file a civil action, § 2000e5(f)(1), are at least within the same section as the provision
conferring jurisdiction on the federal district courts, § 2000e5(f)(3).

Accordingly, this Court will not depart from the Ninth

Circuit’s clear and unequivocal pronouncement that conciliation
is required to confer jurisdiction on this Court.
Nor does this district court’s decision in Global
Horizons compel a finding otherwise.

The Ninth Circuit

recognizes that “‘a district court opinion does not have binding
precedential effect” on other district courts.’”

United States

v. Ensminger, 567 F.3d 587, 591 (9th Cir. 2009) (quoting NASD
Dispute Resolution, Inc. v. Jud. Council of Cal., 488 F.3d 1065,
1069 (9th Cir. 2007) (citing McGinley v. Houston, 361 F.3d 1328,
1331 (11th Cir. 2004) (“The general rule is that a district
judge’s decision neither binds another district judge nor binds
him, although a judge ought to give great weight to his own prior
decisions.”)).

In the face of the Ninth Circuit’s construction

of conciliation as a jurisdictional prerequisite, this Court does
not follow Global Horizons’s departure from this circuit’s
precedent.
Accordingly, the Court is required, under Pierce
Packing, to construe the conciliation provision as a pre-suit
jurisdictional requirement.

The Court believes that the

conciliation requirement must have meaning beyond a statutory

55

formality, and the EEOC must actually investigate the claims of
discrimination and harassment and attempt to resolve the claims
through good-faith conciliation.

The Court thus CONCLUDES that

conciliation under Title VII is a jurisdictional precondition to
filing suit.
B.

The EEOC’s Attempt at Conciliation
The Court next considers whether the EEOC’s

conciliation efforts adequately satisfied Title VII’s pre-suit
requirement.4

This circuit has not articulated a standard for

determining the sufficiency of conciliation.

As one district

court in this circuit noted:
The Ninth Circuit has not provided a

4

The Court strikes the Declaration of EEOC Trial Attorney
Amrita Mallik, attached to the EEOC’s oppositions to both the
ALTRES Motion and the La Rana Motion, to the extent it purports
to attest to events of which the EEOC’s counsel has no personal
knowledge, including the EEOC’s investigation of the underlying
Charge and the EEOC’s in-person conciliation with La Rana. [Opp.
to ALTRES Motion, Decl. of Trial Attorney Amrita Mallik (dkt. no.
41-1) at ¶¶ 2, 5, 6; Opp. to La Rana Motion, Decl. of Trial
Attorney Amrita Mallik (dkt. no. 42-1) at ¶¶ 2, 5, 6, 15, 16.]
With regard to the EEOC’s exhibits, the Court cautions the
EEOC to comply with LR10.2 of the Local Rules of Practice of the
United States District Court for the District of Hawai‘i:
(d) Exhibits, Declarations and Affidavits.
Original documents and courtesy copies of
exhibits, declarations, and/or affidavits
shall have appropriately labeled tabs. All
exhibits attached to papers shall show the
exhibit number or letter at the bottom of the
first page of the exhibit. Exhibits,
declarations, and/or affidavits shall not
contain cover sheets in lieu of tabs.
56

standard for district courts to apply when
evaluating whether the EEOC met its statutory
obligation to conciliate in good faith.
Other circuit courts have taken different
approaches. Several circuits have adopted a
three-part test under which the EEOC fulfills
its duty to conciliate if it: “1) outlines to
the employer the reasonable cause for its
belief that the employer is in violation of
the Act, 2) offers an opportunity for
voluntary compliance, and 3) responds in a
reasonable and flexible manner to the
reasonable attitude of the employer.” EEOC
v. Johnson & Higgins, Inc., 91 F.23d 1529,
1534 (2d Cir. 1996); see also EEOC v.
Asplundh Tree Expert Co., 340 F.3d 1256, 1259
(11th Cir. 2003); EEOC v. Klinger Electric
Corp., 636 F.2d 104, 107 (5th Cir. 1981).
The Sixth Circuit has taken a more
deferential approach that focuses on whether
the EEOC made an attempt to conciliate,
without examining the substance of the
conciliation efforts. EEOC v. Keco Indus.,
Inc., 748 F.2d 1097, 1102 (6th Cir. 1984).
The Sixth Circuit has not provided a standard
district courts should apply, but has
emphasized that the “form and substance of
[the EEOC’s] conciliations is within the
discretion of the EEOC as the agency created
to administer and enforce our employment
discrimination laws and is beyond judicial
review.” Id.
District courts within the Ninth Circuit
have applied both the deferential approach
taken by the Sixth Circuit in Keco and the
three-part test applied by other circuits.
See Timeless Investments, Inc., 2010
WL3220306 at *10. Some courts have ruled
that the EEOC fulfills the conciliation
requirement if it “provides the employer an
opportunity to confront all issues.” EEOC v.
Lawry’s Restaurants, Inc., 2006 WL 2085998,
*2 (C.D. Cal. 2006). Other courts have
stated that “the fundamental question is the
reasonableness and responsiveness of the
EEOC’s conduct under all the circumstances.”
Asplundh, 340 F.3d at 1259 (quoting Klinger,
57

636 F.2d at 107).
Although courts have taken different
approaches when evaluating the EEOC’s duty to
engage in conciliation, there is no
disagreement that the statutory duty is a
real one rather than a mere formality, and
that the underlying goal is to encourage
settlements. The Ninth Circuit has
interpreted the statute to mean that
conciliation is “the preferred means of
achieving the objectives of Title VII.”
Pierce Packing Co., 669 F.2d at 609. The
Eleventh Circuit has stated that “the duty to
conciliate is at the heart of Title VII. It
clearly reflects a strong congressional
desire for out-of-court settlements of Title
VII violations.” Asplundh, 340 F.3d at 1259.
“The courts have interpreted the statute to
mean precisely what it says. Nothing less
than a ‘reasonable’ effort to resolve with
the employer the issues raised by the
complainant will do.” Id. (internal
citations omitted). The Fifth Circuit has
similarly stated that conciliation “is one of
the most essential functions of the EEOC.”
Agro Distribution, 555 F.3d at 468 (internal
citation and quotation marks omitted).
EEOC v. High Speed Enter., Inc., No. CV-08-01789-PHX-ROS, 2010 WL
8367452, at *2-3 (D. Ariz. Sept. 30, 2010).
The Court need not decide the appropriate standard,
because, under either the deferential approach or the Sixth
Circuit’s three-part approach, the Court finds that the EEOC
failed to conciliate in good faith when it failed to provide
either Defendant with any information with which they could
evaluate the EEOC’s claims.

See EEOC v. Bloomberg, L.P., 751 F.

Supp. 2d 628, 642 (S.D.N.Y. 2010) (“the EEOC cannot, when the
employer reasonably asks for information to formulate a monetary
58

counteroffer, make substantial monetary demands and require
employers simply to pony up or face a lawsuit”).

For example,

despite Defendants’ repeated requests, the EEOC did not furnish
information regarding the class of unnamed “aggrieved
individuals,” the allegedly unlawful acts, or any other fact that
would put Defendants on notice of the class or its claims.

The

EEOC’s obstinate refusal to offer any information, including the
results of its investigation, does not demonstrate “a willingness
to work toward settlement,” because “a fundamental element of
working toward settlement is providing a reasonable amount of
information to make settlement a possibility.”
Enter., 2010 WL 8367452, at *5.

See High Speed

The statute requires EEOC to

conduct conciliation and therefore Congress must have intended it
to be done in a meaningful way.

In order to be meaningful,

conciliation must have context and provide for an exchange of
relevant and specific information between the parties.

It is no

surprise that Defendants, faced with little information, were
unwilling to entertain the EEOC’s “take-it-or-leave-it” offer.
The EEOC cannot expect employers to make substantial offers of
settlement when they are provided with no information with which
to evaluate their liability.
At the hearing on the present Motions, the Court asked
counsel for the EEOC to point out where, in the record, the EEOC
provided Defendants with any information with which they could

59

reasonably evaluate the EEOC’s claims.

Although counsel referred

to a number of correspondence attached as exhibits, she was
unable to show that the EEOC provided Defendants with anything
more than generalities, instead insisting that the correspondence
built upon prior correspondence and the initial Charge.

Counsel

requested that the Court consider the correspondence in “a
holistic sense,” but could not identify any particular instance
where Defendants received information other than the names of the
Claimants and the fact that they allege sexual harassment and
discrimination.

[Tr. of 7/30/12 Hrg., filed 7/31/12 (dkt. no.

49), at 40-61.]

The Court finds that, based on the

correspondence supplied by the parties, the EEOC did not provide
Defendants with sufficient information to understand or evaluate
the claims.

The Court thus CONCLUDES that the EEOC failed to

conciliate in good faith.
In the event that the EEOC fails to satisfy its presuit conciliation obligation, the EEOC should be provided the
opportunity to cure any defect in the process:
Conciliation is a condition precedent that
the EEOC must satisfy before filing suit.
EEOC v. Pierce Packing Co., 669 F.2d 605, 607
(9th Cir. 1982). In the event the court
finds that the EEOC failed to adequately
conciliate the claims, the remedy is to stay
the action in order to allow the EEOC an
opportunity to comply with its statutory
conciliation duties. EEOC v. Zia Company,
582 F.2d 527, 533 (10th Cir. 1978) (in the
event court finds conciliation efforts
inadequate, district court should stay the
60

proceedings pending “further conciliation
efforts”) . . . .
EEOC v. Hometown Buffet, Inc., 481 F. Supp. 2d 1110, 1113 (S.D.
Cal. 2007) (some citations omitted).
The Court thus STAYS the present action and ORDERS the
EEOC to redo the conciliation process with both ALTRES and La
Rana.

The EEOC is instructed to provide Defendants with

information such as the number or identity of Claimants
identified during its investigation, specific incidents of
harassment or discrimination, and any other information
reasonably necessary for Defendants to evaluate the claims and
formulate a reasonable offer of settlement.
II.

Adequacy of the Complaint
Even if Arbaugh supersedes Pierce Packing such that

conciliation is not a jurisdictional requirement, the Court must
still determine whether the EEOC’s claims are adequately pled so
as to survive a Rule 12(b)(6) motion to dismiss.
Rule 8(a)(2) of the Federal Rules of Civil Procedure
provides that a complaint must contain “a short and plain
statement of the claim showing that the pleader is entitled to
relief[.]”

In its current form, the Complaint does not allege

facts sufficient to state a claim for relief that is plausible on
its face.
(2007).

See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

The EEOC fails to offer sufficient facts concerning its

substantive claims that would enable “the court to draw the
61

reasonable inference that the defendant is liable for the
misconduct alleged.”
(2009).

See Ashcroft v. Iqbal, 556 U.S. 662, 677

First, the Court finds that the EEOC fails to

distinguish between ALTRES and La Rana.

Although the Complaint

notes that ALTRES contracted with La Rana only between June 2007
and December 2008, the majority of the Complaint refers
collectively to “Defendants” without distinction between the two
parties.

This problem is compounded by the fact that the EEOC

alluded in the hearing on this issue that its claim against
ALTRES may encompass other workplaces.
39.]

[Tr. of 7/30/12 Hrg. at

The EEOC must allege specifically what wrongdoing it is

assigning to each Defendant.

If the EEOC intends to proceed on a

theory of joint employer liability, it must allege facts
sufficient to support its contention that both Defendants
controlled the terms and conditions of the Claimants’ employment.
See EEOC v. Pac. Mar. Ass’n, 351 F.3d 1270, 1275-77 (9th Cir.
2003).
Relatedly, the Complaint also fails to identify dates
of the alleged harassment and discrimination.

Other than to

allege that the relevant events took place “[s]ince at least in
or about 2007,” [id. at 19,] the EEOC does not identify when the
acts allegedly occurred.

The timeline of events may prove

significant, given that ALTRES was allegedly not under contract
with La Rana after December 2008.

62

The Complaint also offers little information regarding
the identity of the alleged harassers.

Other than references to

“the owner,” [Complaint at ¶ 20(a),] and “Senor Frog’s Human
Resource Manager,” [id. at 23(c),] the remainder of the Complaint
refers collectively to “Defendant Employers,” “management
officials,” and “employees.”

Again, the EEOC cannot offer broad

generalizations and must allege specifics with regard to the
identities of the alleged harassers.
With regard to the assertion that Colletto was
constructively discharged, the Court finds that the Complaint
alleges insufficient facts to support this claim.

The Complaint

offers only one allegation directly related to constructive
discharge:
Defendant Employers constructive discharge
Charging Party’s employment in retaliation
for engaging in a protected activity. [sic]
The officials who were engaged in her
constructive discharge knew of her complaints
regarding the sexual harassment. Similarly
situated employees who did not complain of
any type of harassment were not subject to
reduced work hours, less favorable working
conditions, termination or intolerable
working conditions too intolerable to
continue working.
[Complaint at ¶ 21(c).]

This allegation fails to allege “the

element that requires the plaintiff to have actually quit.”

See

Hubbard v. Bimbo Bakeries USA, Inc., 207 Fed. Appx. 607, 609 (9th
Cir. 2008).

Even assuming that Colletto resigned, the Complaint

does not allege that any Claimant in the present litigation
63

suffered such intolerable working conditions that she was forced
to resign.

Even accepting the EEOC’s argument that its claim of

constructive discharge is part of a larger claim of
discrimination, the currently pled facts allege an aggregate of
harassment and discrimination claims and do not indicate that any
female employee was subject to harassment creating such
intolerable working conditions that she was forced to resign.
Regarding Defendants’ arguments that the Complaint
fails to allege sufficient facts in support of the claims for
disparate treatment and retaliation, the Court finds that the
Complaint, while sometimes general, alleges sufficient
information regarding the nature of those claims to meet the
pleading standard in Iqbal and Twombly.

For example, the

Complaint alleges specific facts related to disparate treatment
on the basis of the Claimants’ gender, [Complaint at ¶¶ 22-23,]
and retaliation against Claimants in response to complaints of a
hostile work environment [id. at ¶ 21].

With the exception of

the deficiencies discussed above, these allegations are otherwise
sufficient to state claims for disparate treatment and
retaliation.
The Court thus FINDS that the Complaint fails to meet
the pleading standards of Iqbal, Twombly, and Rule 8.

The Court

GRANTS the EEOC leave to amend the Complaint to cure the defects
discussed herein after it fulfills its conciliation obligation.

64

The Court expects that, by disclosing more information during
conciliation and in the First Amended Complaint, the EEOC will
provide Defendants and the Court with a fuller picture of its
claims of harassment and discrimination.
CONCLUSION
On the basis of the foregoing, ALTRES’s Motion to
Dismiss Complaint Filed December 30, 2011, filed on March 15,
2012 is GRANTED to the extent it seeks dismissal of the Complaint
and DENIED to the extent it requests that the Court not grant
leave to amend.

La Rana’s Motion to Dismiss Complaint Filed

December 30, 2011, filed on April 26, 2012, is HEREBY GRANTED.
The present action is STAYED pending the parties’ good-faith
conciliation.

Upon completing proper conciliation, the EEOC may

file a First Amended Complaint no later than November 1, 2012.
The Court CAUTIONS the EEOC that, if it fails to file its First
Amended Complaint by November 1, 2012, the claims that this Order
dismissed without prejudice will be automatically dismissed with
prejudice.

Further, if the EEOC’s First Amended Complaint fails

to cure the defects identified in this Order or adds new parties,
claims, facts, or theories of liability, this Court may dismiss
those claims with prejudice.
IT IS SO ORDERED.

65

DATED AT HONOLULU, HAWAII, August 22, 2012.

/S/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

EEOC V. LA RANA HAWAII, LLC, ETC., ET AL; CIVIL NO. 11-00799 LEKBMK; ORDER (1) GRANTING IN PART AND DENYING IN PART DEFENDANT
ALTRES, INC.’S MOTION TO DISMISS COMPLAINT FILED DECEMBER 30,
2011 AND (2) GRANTING DEFENDANT LA RANA HAWAII, LLC’S MOTION TO
DISMISS COMPLAINT FILED DECEMBER 30, 2011

66