Mearig v. Chugach Alaska Corporation

Filing 55

ORDER GRANTING DEFENDANT'S JUNE 22, 2017 MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANT'S AUGUST 9, 2017 MOTION FOR SUMMARY JUDGMENT re 54 re 33 MOTION for Summary Judgment re 36 MOTION for Summary Judgment.< p> Signed by JUDGE ALAN C. KAY on 10/23/2017. The Court GRANTS Defendant's Motion for Summary Judgment filed on June 22, 2017, ECF No. 33 . The Court DENIES Defendant's Motion for Summary Judgment filed on Augu st 9, 2017, ECF No. 36 , as moot. The Court DISMISSES the case WITHOUT PREJUDICE (eps, )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).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
___________________________________
)
ADELA MEARIG,
)
)
Plaintiff,
)
v.
) Civ. No. 16-00500 ACK-KSC
)
CHUGACH ALASKA CORPORATION,
)
)
Defendant.
)
___________________________________)
ORDER GRANTING DEFENDANT’S JUNE 22, 2017 MOTION FOR SUMMARY
JUDGMENT AND DENYING DEFENDANT’S AUGUST 9, 2017 MOTION FOR
SUMMARY JUDGMENT
For the reasons set forth below, the Court GRANTS
Defendant’s Motion for Summary Judgment filed on June 22, 2017,
ECF No. 33.

The Court DENIES Defendant’s Motion for Summary

Judgment filed on August 9, 2017, ECF No. 36, as moot.

The

Court DISMISSES the case WITHOUT PREJUDICE.
FACTUAL BACKGROUND
In July 2015, Plaintiff Adela Mearig (“Plaintiff”) was
hired by Chugach Federal Solutions, Inc. (“CFS”) as a temporary
cook on Wake Island.

Def. June 22, 2017 CSF, Hopper Decl. ¶ 4;

Complaint (“Compl”) ¶ 4.

Chugach Federal Solutions has been a

wholly owned subsidiary of Chugach Government Solutions (“CGS”)
since 2013.

Def. June 22, 2017 CSF, Hopper Decl. ¶¶ 3-4.

Chugach Government Solutions was established in 2013 as a
holding company for Defendant Chugach Alaska Corporation’s
(“Defendant” or “CAC”) subsidiaries, which perform government
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contracting work.

Id.

Plaintiff alleges that between July 26, 2015 and
September 27, 2015 she was subject to sexual harassment, sexual
assault, verbal harassment, and physical violence by Defendant
CAC’s employees.

Compl. ¶ 4.

She was discharged from her

position on October 18, 2015 and filed an administrative charge
with the EEOC regarding the alleged discrimination and
retaliation in April 2016.

Id. ¶¶ 4, 9.

The EEOC closed its

file on Plaintiff’s charge on June 22, 2016 because CAC employs
less than the required number of employees or is otherwise not
covered by the statutes.

Id. at 5.

PROCEDURAL BACKGROUND
Plaintiff, acting pro se, filed a Title VII complaint
in federal court on September 12, 2016.

Defendant filed a

motion for summary judgment on June 22, 2017 (“June 22, 2017
Motion”) with a concise statement of facts in support of that
motion (“Def. June 22, 2017 CSF”).

ECF Nos. 33, 34.

Defendant

filed a second motion for summary judgment on August 9, 2017
(“August 9, 2017 Motion”) with a concise statement of facts in
support of that motion.

ECF Nos. 36, 37.

Plaintiff, through

counsel, filed her oppositions on September 12, 2017 (“Opp. to
June 22, 2017 Motion” and “Opp. to August 9, 2017 Motion”), ECF
Nos. 41, 43, with concise statements of fact in support of those
oppositions (“Pl. June 22, 2017 CSF” and “Pl. August 9, 2017
2

CSF”).

ECF Nos. 42, 44.

4, 2017.

Defendant filed its replies on October

ECF Nos. 47, 48.

On October 7, 2017, Plaintiff filed

a Memorandum in Response to Reply (ECF No. 50) along with a
supplemental declaration (ECF No.51).1

The Court held a hearing

on Defendant’s Motions on October 20, 2017.
STANDARD
Summary judgment is proper where there is no genuine
issue of material fact and the moving party is entitled to
judgment as a matter of law.

Fed. R. Civ. P. 56(a).

Federal

Rule of Civil Procedure (“Rule”) 56(a) mandates summary judgment
“against a party who fails to make a showing sufficient to
establish the existence of an element essential to the party’s
case, and on which that party will bear the burden of proof at
trial.”

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see

also Broussard v. Univ. of Cal., 192 F.3d 1252, 1258 (9th Cir.
1999).
“A party seeking summary judgment bears the initial
burden of informing the court of the basis for its motion and of
1

The filing of supplemental briefing without leave of Court
violates the Local Rules. See Local Rule 7.4 (discussing the
opposition and reply brief and stating “[n]o further or
supplemental briefing shall be submitted without leave of
court”). Plaintiff did not seek leave of court to file her
Memorandum in Response to Reply. Furthermore, as discussed
herein, the Court does not address the argument from Defendant
that is the focus of this Memorandum. Accordingly, the Court
declines to consider Plaintiff’s Memorandum in Response to Reply
and the corresponding declaration.
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identifying those portions of the pleadings and discovery
responses that demonstrate the absence of a genuine issue of
material fact.”

Soremekun v. Thrifty Payless, Inc., 509 F.3d

978, 984 (9th Cir. 2007) (citing Celotex, 477 U.S. at 323).
“When the moving party has carried its burden under Rule 56[(a)]
its opponent must do more than simply show that there is some
metaphysical doubt as to the material facts [and] come forward
with specific facts showing that there is a genuine issue for
trial.”

Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S.

574, 586-87 (1986) (citation and internal quotation marks
omitted); see also Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 247-48 (1986) (stating that a party cannot “rest upon the
mere allegations or denials of his pleading” in opposing summary
judgment).
“An issue is ‘genuine’ only if there is a sufficient
evidentiary basis on which a reasonable fact finder could find
for the nonmoving party, and a dispute is ‘material’ only if it
could affect the outcome of the suit under the governing law.”
In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008) (citing
Anderson, 477 U.S. at 248).

When considering the evidence on a

motion for summary judgment, the court must draw all reasonable
inferences on behalf of the nonmoving party.

Matsushita Elec.

Indus. Co., 475 U.S. at 587; see also Posey v. Lake Pend Oreille
Sch. Dist. No. 84, 546 F.3d 1121, 1126 (9th Cir. 2008) (stating
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that “the evidence of [the nonmovant] is to be believed, and all
justifiable inferences are to be drawn in his favor”) (internal
citation and quotation omitted).
DISCUSSION
I.

Defendant’s June 22, 2017 Motion for Summary
Judgment

Defendant has moved for summary judgment on the basis
that it is not a proper party to this action and is not liable
for Plaintiff’s Title VII claims as the parent company of the
holding company whose subsidiary hired Plaintiff.

See June 22,

2017 Motion at 3-4.
“In the absence of special circumstances, a parent
corporation is not liable for the Title VII violations of its
wholly owned subsidiary.”

Ass’n of Mexican-Am. Educators v.

California, 231 F.3d 572, 582 (9th Cir. 2000) (quoting Watson v.
Gulf and W. Indus., 650 F.2d 990, 993 (9th Cir. 1981)); see also
Razo v. Timec Co., Inc., No. 15-CV-03414-MEJ, 2016 WL 6576625,
at *8 (N.D. Cal. Nov. 7, 2016) (stating that there is a strong
presumption that the parent company is not the employer when the
subsidiary hired plaintiff); E.E.O.C. v. NCL Am., Inc., Civ. No.
06-00451 SOM/BMK, 2008 WL 281524, at *7 (D. Haw. Feb. 1, 2008)
(same).

Special circumstances include where “the parent-

subsidiary relationship is a ‘sham’ or that circumstances exist
that would render the parent liable for the debts of its

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subsidiary.”

Watson, 650 F.2d at 993.2

In Watson, the Ninth

Circuit further held that such special circumstances would exist
if there was any evidence that the parent corporation
participated in or influenced the employment policies of the
wholly owned subsidiary or the parent corporation had
undercapitalized the subsidiary to defeat potential recovery by
a Title VII plaintiff.

Id.

Defendant provides the Declaration of Tim Hopper, who
is employed as the President, Government Division of Defendant.
In his declaration, Mr. Hopper states that CFS hired Plaintiff
and that Defendant never employed her or any individuals at the
location where she worked.

Hopper Decl. ¶¶ 4-6.

He further

states that CGS is a wholly owned subsidiary of Defendant and
that legal ownership of CFS was transferred to CGS in 2013, two
years before CFS hired Plaintiff.

Id. ¶¶ 3-4.

Therefore,

Defendant and CFS do not have a direct parent-subsidiary
2

A parent company may be liable for the debts of its
subsidiary when circumstances warrant piercing the corporate
veil. See AFL-CIO v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1475
(9th Cir. 1994) (“[T]he [veil-piercing] doctrine . . . allows
creditors of corporations to pierce the corporate shell to hold
shareholders liable for corporate debts if they abuse the
corporate form to defraud creditors.”). In determining whether
to pierce the corporate veil, the Ninth Circuit considers: “(1)
the amount of respect given to the separate identity of the
corporation by its shareholders, (2) the degree of injustice
visited on the litigants by recognition of the corporate entity,
and (3) the fraudulent intent of the incorporators.” Id. at
1475. A plaintiff “must prevail on the first threshold factor
and on one of the other two.” Id.
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relationship.

Defendant is the parent company of the holding

company whose subsidiary hired Plaintiff.

Plaintiff does not

provide any evidence to contradict Mr. Hopper’s Declaration.

In

addition, Plaintiff has failed to show that any of the special
circumstances discussed in Watson apply here.

The Court,

therefore, finds that Defendant has met its burden on summary
judgment.
Plaintiff argues that Defendant can be considered her
employer for purposes of Title VII under the integrated
enterprises test.

Under this test, the Ninth Circuit has held

that multiple businesses could be treated as a single employer
for Title VII purposes if they had “(1) interrelation of
operations, (2) common management, (3) centralized control of
labor relations; and (4) common ownership or financial control.”
Kang v. U. Lim Am., Inc., 296 F.3d 810, 815 (9th Cir. 2002).
The most critical factor is the central control of labor
relations.

Id.
However, Plaintiff fails to note that the integrated

enterprise test only applies in certain contexts.
Inc., 2008 WL 281524, at *8.

See NCL Am.,

“The Ninth Circuit has clarified

that this test applies when an allegedly discriminatory
employer, not covered by Title VII because it has fewer than
fifteen employees, needs to be integrated with another employer
to fulfill Title VII’s fifteen-employee requirement.”
7

Id.

(“[T]he test is only employed to determine statutory coverage
under Title VII if there is not already an otherwise qualified
employer subject to the suit.”); see Anderson v. Pac. Mar.
Ass’n, 336 F.3d 924, 929 (9th Cir. 2003) (“We use the integrated
enterprise test to judge the magnitude of interconnectivity for
determining statutory coverage.”); Nowick v. Gammell, 351 F.
Supp. 2d 1025, 1034 (D. Haw. 2004) (Kay, J.) (“Here, there is no
question that MLVO, Plaintiff’s direct employer, qualified as an
employer under Title VII . . . Thus, the integrated enterprise
test is not applicable in this case.”).3

“The integrated

employer test advances the antidiscrimination purpose behind
Title VII by preventing employers from artificially dividing
themselves into organizations with fewer than 15 employees in
order to escape liability.”

Rhodes v. Sutter Health, No. CIV.

2:12-0013 WBS DAD, 2012 WL 1868697, at *4 (E.D. Cal. May 22,
2012).
The Court finds that Plaintiff has not demonstrated
that this test applies.

Plaintiff has not come forth with any

evidence to demonstrate that CFS had less than fifteen
employees.

Accordingly, the Court will not apply the integrated

enterprise test.

However, even if, assuming arguendo, the

integrated enterprise test applies, Plaintiff does not satisfy
3

At the hearing, Defendant’s counsel stated that CFS had
approximately 500 employees in October 2015.
8

the four-part test.
With respect to the interrelated operations factor,
Plaintiff points to an employee handbook, which is titled
“Employee Handbook, Chugach Alaska Corporation, Subsidiaries,
Joint Ventures,” dated January 2011, and revised May 16, 2011,
which discusses a workplace harassment policy.
2017 CSF, Ex. 1 at 1.

Pl. June 22,

Within that employee handbook, Plaintiff

points to the following statement, “The Board of Directors for
Chugach Alaska Corporation has approved and adopted the policies
and procedures in this handbook.

Chugach Alaska Corporation,

Subsidiaries and Joint Ventures are hereafter referred to as the
‘Company.’”

Id. at 2.

The Court, however, finds Plaintiff’s

argument regarding this handbook to be problematic.

Plaintiff

has not demonstrated that CFS adopted the policies in this
handbook.

Furthermore, this handbook is dated 2011, which is

prior to CAC’s transfer of ownership of CFS to CGS.
Furthermore, even if Plaintiff demonstrated that CFS adopted
this employee handbook and that it applied to Plaintiff when she
was employed by CFS, the handbook, by itself, is insufficient
evidence of interrelated operations.
With respect to the common management factor,
Plaintiff next asserts that during Plaintiff’s employment in
2015, the same individual was a Director and Treasurer of
Defendant and Treasurer, Secretary, and Director of CFS, and the
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same individual was a Vice President of Defendant and President
of CFS.

Pl. June 22, 2017 CSF, Ex. 2 at 2, Ex. 3 at 1.

The

Court finds Plaintiff’s evidence on this factor to be
insufficient.

Although Plaintiff has demonstrated that a couple

of the individual officers had multiple roles among the related
companies, the Court finds that this evidence on its own does
not establish that the management of Defendants was unified or
common.

See NCL Am., Inc., 2008 WL 281524, at *10 (“While

individual officers wore multiple hats among the related
corporations, it does not follow that the management was unified
or ‘common.’

Plaintiffs simply conclude that the overlapping of

certain officers establishes ‘common management.’”).
With respect to establishing the third factor, the
centralized control of labor relations, Plaintiff again
discusses the employee handbook and states that in the employee
handbook Defendant’s President acknowledges all employees of
Defendant and its subsidiaries and joint ventures as “fellow
employee.”

Pl. June 22, 2017 CSF, Ex. 1 at 3.

Plaintiff points

out that the handbook has a form for all employees of “the
Company” to sign to demonstrate their receipt and acknowledgment
of the handbook.

Id. at 4.

Plaintiff further states that the

employee handbook directs employees to report any harassment
incidents to “any manager in the Company” or to call one central
telephone number for “the Company.”
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Id. at 6.

In addition to

the issues regarding the employee handbook as previously
discussed, the Court finds that this evidence alone is
insufficient to meet Plaintiff’s burden as to the third factor.
Plaintiff does not provide any evidence that Defendant was
involved in the hiring and firing decisions for employees at CFS
or set other employment policies or employee benefits.4
Plaintiff does not present any evidence in regard to
the fourth factor—common ownership or financial control.

In

sum, the Court finds that Plaintiff has failed to demonstrate
that Defendant and CFS are an integrated enterprise.
For the aforementioned reasons, the Court finds that
Plaintiff has failed to demonstrate any basis that would justify
Defendant’s liability for the Title VII violations by its
holding company’s wholly-owned subsidiary.

Accordingly, the

Court grants Defendant’s Motion for Summary Judgment because
Defendant is not the proper party in this action.

4

The Court

In addition, Plaintiff, citing to her EEOC charge of
discrimination, states that the EEOC “determined the Defendant
was an employer of the Plaintiff, when it prepared, and accepted
for filing, Plaintiff’s administrative charge against the
Defendant . . . for alleged Title VII employment
discrimination.” Opp. to June 22, 2017 Motion at 4. However,
the Court does not find this statement accurate. The Charge of
Discrimination reflects that the document was filled out and
filed by Plaintiff rather than the EEOC, and there is nothing in
the EEOC Charge of Discrimination to suggest that the EEOC made
a determination regarding whether Defendant was the proper
subject of Plaintiff’s charge.
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dismisses Plaintiff’s case without prejudice.5
II.

Defendant’s August 9, 2017 Motion for Summary
Judgment

Defendant also moves for summary judgment on
Plaintiff’s retaliation claim.

Defendant argues that even if it

can be liable for CFS’s conduct, CFS had a legitimate, nondiscriminatory reason for declining to extend Plaintiff’s
temporary employment.

Because the Court grants Defendant’s June

22, 2017 Motion for Summary Judgment on the basis that Defendant
is not the proper party to this action, the Court denies
Defendant’s August 9, 2017 Motion for Summary Judgment as moot.
CONCLUSION
For the foregoing reasons, the Court GRANTS
Defendant’s Motion for Summary Judgment filed on June 22, 2017,
ECF No. 33.

The Court DENIES Defendant’s Motion for Summary

Judgment filed on August 9, 2017, ECF No. 36, as moot.

The

Court DISMISSES the case WITHOUT PREJUDICE.

5

Defendant argues for the first time in its Reply that
Plaintiff did not timely file her Charge of Discrimination with
the EEOC. The Court notes that it is inappropriate to consider
arguments raised for the first time in Reply. See Local Rule
7.4 (“Any argument raised for the first time in the reply shall
be disregarded.”). Moreover, given that the Court grants
Defendant’s Motion for the reasons previously discussed, it need
not consider this additional argument.
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IT IS SO ORDERED.
DATED:

Honolulu, Hawaii, October 23, 2017

________________________________
Alan C. Kay
Sr. United States District Judge

Mearig v. Chugach Alaska Corporation, Civ. No. 16-00500 ACK-KSC, Order
Granting Defendant’s June 22, 2017 Motion for Summary Judgment and Denying
Defendant’s August 9, 2017 Motion for Summary Judgment

13