Maple et al v. Rainbow's End Recovery Center, LLC et al
Filing
11
MEMORANDUM DECISION AND ORDER - IT IS ORDERED: 1. The Court will not rule on Defendants Motion to Dismiss (Dkt. 4 ) at this time. 2. Plaintiffs Rule 56(d) Motion to Continue (Dkt. 8 ) is GRANTED. Signed by Judge David C. Nye. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjs)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
CRYSTAL MAPLE and DEREK
STEPHENS,
Case No. 4:17-cv-00335-DCN
MEMORANDUM DECISION AND
ORDER
Plaintiffs,
v.
RAINBOW’S END RECOVERY
CENTER, LLC, an Idaho limited liability
company, ALY BRUNER, and NANCY
DEL COLLETTI,
Defendants.
I. INTRODUCTION
Pending before the Court is Defendants Rainbow’s End Recovery Center, LLC,
Aly Bruner, and Nancy Del Colletti’s1 Motion to Dismiss. Dkt. 4. Also before the Court
is Plaintiffs Crystal Maple and Derek Stephens’ Motion to Continue Pursuant to Rule
56(d). Dkt. 8. Having reviewed this record herein, the Court finds the parties have
adequately presented the facts and legal arguments in the briefs and record. Accordingly,
in the interest of avoiding further delay, and because the Court finds that the decisional
process would not be significantly aided by oral argument, the Court will decide the
1
The record before the Court in inconsistent when it comes to Nancy’s last name. In some places
her name appears as one word (DelColletti), in other places as two words (Del Colletti), and still
in other places (including in her own affidavit) both spellings are used. The Court notes that it
will use “Del Colletti” when referring to this Defendant.
MEMORANDUM DECISION AND ORDER - 1
motion without oral argument. Dist. Idaho Loc. Civ. R. 7.1(d)(2)(ii). For the reasons set
forth below the Court GRANTS Plaintiffs’ Motion to Continue and withholds ruling on
Defendants’ Motion to Dismiss at this time.
II. BACKGROUND
Many of the underlying facts of this case are not pertinent to this Motion;
however, the Court will give a brief overview to put the matter at issue in context.
Rainbow’s End Recovery Center (“RERC”) does business as a residential
addiction treatment facility in Challis, Idaho. Bruner and Del Colletti are husband and
wife and co-own RERC. Del Colletti acts as the Executive Director and Bruner acts as
the property manager. Maple and Stephens are husband and wife and both worked for
RERC during the timeframe in question: Stephens as a chef, Maple as a night technician
and housekeeper.
Maple alleges that Bruner engaged in inappropriate conduct towards her during
her employment with RERC. Maple maintains that on one occasion, on or about January
14, 2017, Bruner sexually battered her. Plaintiffs reported the incident to local law
enforcement. Maple and Stephens subsequently determined that they could no longer
work at RERC unless Del Colletti addressed these issues regarding Bruner’s behavior
towards Maple. According to Plaintiffs, Del Colletti refused. As a result of Bruner’s
conduct, and RERC and/or Del Colletti’s failure to intervene, Maple alleges that RERC
constructively discharged her in violation of law. Stephens also felt that due to the
“hostile work environment,” and Del Colletti’s inaction, RERC constructively discharged
him as well.
MEMORANDUM DECISION AND ORDER - 2
On August 11, 2017, Plaintiffs filed their complaint in the instant suit alleging
nine different state and federal causes of action. Many of these claims revolve around
Title VII of the Civil Rights Act of 1964.
On November 6, 2017, prior to filing an answer or any other responsive pleading,
Defendants filed a Motion to Dismiss asking the Court to dismiss all federal claims and
to decline jurisdiction over the remaining state claims. Defendants point out that in Title
VII actions an employer is only liable if it employs more than 15 people. Defendants
maintain that RERC has never employed more than 15 people and, therefore, Plaintiffs’
claims fail out the outset.
In response to this Motion, Plaintiffs request that the Court either deny the Motion,
or that the Court delay consideration under Federal Rule of Civil Procedure 56(d) until
appropriate discovery can be conducted to determine the number of RERC employees.
III. LEGAL STANDARD
A. Motion to Dismiss
A motion to dismiss for failure to state a claim challenges the legal sufficiency of
the claims stated in the complaint. Conservation Force v. Salazar, 646 F.3d 1240, 1242
(9th Cir. 2011). “A complaint generally must satisfy the notice pleading requirements of
Federal Rule of Civil Procedure 8(a)(2) to avoid dismissal under a Rule 12(b)(6) motion.”
Id. (citing Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003)). “Federal Rule of Civil
Procedure 8(a)(2) requires only ‘a short and plain statement of the claim showing that the
pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the . . .
MEMORANDUM DECISION AND ORDER - 3
claim is and the grounds upon which it rests.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544
555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).
To sufficiently state a claim for relief and survive a 12(b)(6) motion, the pleading
“does not need detailed factual allegations;” however, the “[f]actual allegations must be
enough to raise a right to relief above the speculative level.” Id. at 555. Mere “labels and
conclusions” or a “formulaic recitation of the elements of a cause of action will not do.”
Id. Rather, there must be “enough facts to state a claim to relief that is plausible on its
face.” Id. at 570. In other words, the complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009).
In light of Twombly and Iqbal, the Ninth Circuit summarized the governing
standard as follows: “In sum, for a complaint to survive a motion to dismiss, the
nonconclusory factual content, and reasonable inferences from that content, must be
plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv.,
572 F.3d 962, 969 (9th Cir. 2009).
In deciding whether to grant a motion to dismiss, the court must accept as true all
well-pleaded factual allegations in the pleading under attack. Iqbal, 556 U.S. at 663. A
court is not, however, “required to accept as true allegations that are merely conclusory,
unwarranted deductions of fact, or unreasonable inferences.” Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001)
When ruling on a motion to dismiss, the court must normally convert a Rule
12(b)(6) motion into one for summary judgment under Rule 56 if the court considers
MEMORANDUM DECISION AND ORDER - 4
evidence outside of the pleadings. United States v. Ritchie, 342 F.3d 903, 907 (9th Cir.
2003). However, a court may consider certain materials, such as 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. Id. at 908.
In this case, RERC asks the Court to review documents not attached to the
Complaint or incorporated by reference; therefore, if the Court chooses to consider these
documents, the Court must convert the Motion to Dismiss into a motion for summary
judgment.
B. Motion for Summary Judgment
Federal Rule of Civil Procedure 56 governs motions for summary judgment. It
provides that the Court shall render judgment “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(a). A party may move for summary judgment at any time until
thirty days after the close of all discovery. Id. While the court must consider the facts in
the light most favorable to the non-moving party and give that party the benefit of any
reasonable inferences, see, e.g., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986), summary judgment is not a “disfavored procedural shortcut,” but
rather one of the chief mechanisms by which “factually insufficient claims or defenses
[can] be isolated and prevented from going to trial with the attendant unwarranted
consumption of public and private resources.” Celotex Corp. v. Catrett, 477 U.S. 317,
327 (1986). The initial burden is on the moving party to show that there is no genuine
MEMORANDUM DECISION AND ORDER - 5
issue as to any material fact and that the moving party is entitled to judgment as a matter
of law. See Steckl v. Motorola, Inc., 703 F.2d 392, 393 (9th Cir. 1983).
C. Rule 56(d) Motion
When a party opposing a motion for summary judgment cannot present “facts
essential to justify his opposition” to the motion, Rule 56(d) permits the party to submit
an affidavit or declaration stating the reasons the party is unable to present the evidence,
and the court may continue or deny the motion if the opposing party needs to discover
essential facts. The burden is on the party seeking additional discovery pursuant to Rule
56(d) to demonstrate that (1) the information sought would prevent summary judgment,
and (2) that the information sought exists. Blough v. Holland Realty, Inc., 574 F.3d 1084
(9th Cir. 2009); Izaguirre v. Greenwood Motor Lines, Inc., 2011 WL 5325658 at * 6 (D.
Idaho 2011).
Rule 56(d) requires that a non-movant “show[ ] by affidavit or declaration that, for
specified reasons, it cannot present facts essential to justify its opposition.” Id., Fed. R.
Civ. P. 56(d). It is critical that the non-moving party explain why he or she cannot oppose
the motion via an affidavit or declaration. Explanations that are merely contained in a
memorandum are not sufficient. Brae Transp., Inc. v. Coopers & Lybrand, 790 F.2d
1439, 1443 (9th Cir. 1986).
IV. ANALYSIS
Congress has determined that the definition of “employer” in the context of a Title
VII claim only applies to persons or entities who employ 15 or more employees. See 42
U.S.C. § 2000e (b). If an employer does not meet this threshold, it is not subject to
MEMORANDUM DECISION AND ORDER - 6
liability under Title VII. Congress has also explained how to calculate who qualifies as an
employee for the 15 person requirement:
(b) The term “employer” means a person engaged in an industry affecting
commerce who has fifteen or more employees for each working day in each
of twenty or more calendar weeks in the current or preceding calendar year,
and any agent of such a person.
Id. The Supreme Court has held that the threshold number of employees is not a
jurisdictional question but “an element of a plaintiff’s claim for relief.” Arbaugh v. Y&H
Corp., 546 U.S. 500, 516 (2006). The Court has further described the test for whether an
employer “has” an employee for purposes of the statutory definition as the “payroll
method.” Walters v. Metro. Educ. Enters., Inc., 519 U.S. 202, 206 (1997). An employer
“has” an employee if the employer maintains an employment relationship with an
individual, which is primarily determined by whether the individual appears on the
employer’s payroll. Id. at 206-212.
If the Court treats Defendants’ motion as simply a 12(b)(6) motion, the motion
must be denied. This is because in ruling on a motion to dismiss under 12(b)(6), the Court
merely analyzes the Complaint and takes all allegations of material fact as true and
construes them in the light most favorable to the Plaintiff. Documents that are not
attached to the Complaint are not considered. Plaintiffs’ Complaint alleges that RERC
employs 15 or more employees. Dkt. 1, ¶ 11. This allegation, taken as true for purposes
of 12(b)(6), is sufficient to defeat Defendants’ motion. In this case, the Court will have to
look outside the pleadings in order to make a sound judgment on whether RERC meets
MEMORANDUM DECISION AND ORDER - 7
the 15-employee threshold.2 Rule 12 (d) allows the Court to transform the motion into a
summary judgment motion under Rule 56. However, Rule 12(d) also requires the Court
to give all parties a reasonable opportunity to present all the material that is pertinent to
the motion. See e.g., Carter v. Clark Cty., 253 F. App'x 638, 639–40 (9th Cir.
2007)(finding the district court erred when it considered materials outside of the
pleadings in a converted motion to dismiss, but did not give the opposing party a
reasonable opportunity to present material as required by Fed. R. Civ. P. 12(d)).
Defendants knew when they filed their 12(b)(6) motion that the Court would have
to convert the motion to a motion for summary judgment because Defendants are the
ones who submitted documents outside the Complaint. It seems a bit disingenuous for
Defendants to file a 12(b)(6) motion before any discovery has occurred, attach documents
to that motion knowing that would convert it into a summary judgment motion, and then
object to any discovery that is necessary to give Plaintiffs a reasonable opportunity to
present all the material that is pertinent to Defendants’ motion.
Even by converting Defendants’ Motion to a motion for summary judgment in
order to consider evidence the Defendants have presented, the Court still needs further
information to make its summary judgment decision. Limited discovery is necessary to
enable the Plaintiffs a reasonable opportunity to gather information and facts on the
2
In so doing, the Court will convert Defendants’ Motion into a motion for summary judgment.
This conversion also must occur in order for the Court to grant Plaintiffs’ Rule 56(d) Motion,
because a Rule 56(d) motion applies only to motions for summary judgment, not motions to
dismiss.
MEMORANDUM DECISION AND ORDER - 8
limited issue of whether RERC employs 15 or more employees. A Rule 56(d) ruling is
therefore appropriate.
Although RERC has provided its quarterly tax records filed with the Idaho
Department of Labor as evidence of the number of employees it had during the relevant
timeframe, Plaintiffs contend that this evidence is insufficient to establish the actual
number of employees for any given month or year. The Court agrees. The definition as
set forth by Congress deals in weeks, not quarters, so it is not a stretch to say that the
quarterly report may not be an accurate reflection of a person’s employment as defined
under Title VII.3 If the Supreme Court has ruled that the “payroll method” is the requisite
test to determine if an employee meets the statutory definition set forth by Congress then
RERC needs to produce their actual payroll records for the Court and Counsel to review.
Additionally, it is clear that the employment status of Del Colletti and Bruner is
also at issue. The Court must determine what their ownership interests are, how to
classify them, and whether they are single or joint employers of RERC. This will
3
In their reply brief, Defendants state that, by not accepting as true the quarterly tax returns they
provided, Plaintiffs are implying that they (Defendants) filed fraudulent documents with the
State of Idaho. The Court is not in a position to make a determination on that, but does not
believe that RERC has done anything fraudulent or wrong. The simple fact is that quarters and
weeks may not line up to show the full picture under the relevant legal standard. For example, an
individual could show up on two quarterly reports but the Court would never know how many
weeks the individual actually worked during those quarters. The individual may have worked
more than 20 weeks (and therefore qualify as an employee under Title VII), or the individual
could have only worked the last month of one quarter and the first month of the next. Thus, the
individual might show up on the report, but will not meet the 20 week threshold as outlined by
Congress. This example could possible lead to over counting. An example of undercounting may
be as it relates to independent contractors who may or may not appear on the quarterly tax
records, but were nonetheless employees. In any event, the quarterly tax records are not
sufficient.
MEMORANDUM DECISION AND ORDER - 9
ultimately control whether the Court should include them in the 15 total employee tally.
Discovery of this information is therefore necessary in order for the Court to proceed.
Defendants contend that Plaintiffs have not meet their burden, even under Rule
56(d), because they have not (1) set forth in affidavit form the specific facts they hope to
elicit from further discovery, (2) shown that the facts sought exist, and (3) shown that the
sought-after facts are essential to oppose summary judgment. See Family Home & Fin.
Ctr., Inc. v. Fed. Home Loan Mortg. Corp., 525 F.3d 822, 827 (9th Cir. 2008). The Court
disagrees.
First, Plaintiffs’ Counsel, DeAnne Casperson, filed a declaration outlining what
areas require further discovery and why Defendants’ efforts thus far have not produced
the necessary information that would be crucial at summary judgment. Dkt. 9-1. It does
not appear that requesting time for discovery is futile or a stall tactic but rather a
necessary element in Plaintiffs’ opposition to Defendants’ Motion. Casperson further
outlines the facts Plaintiffs hope to elicit—specifically, material necessary to determine if
RERC had 15 employees. Dkt. 9-1, ¶ 15.
The second requirement for a favorable 56(d) ruling requires the non-moving
party to show that the facts sought exist. Here it is clear that the materials necessary to
determine this fact exists. Payroll documents, contracts, corporate disclosures and the like
are presumably within Defendants control and, once produced, will shed light on this
matter.
Turning to the merits of the claim, and the third element of a successful 56(d)
motion, Plaintiffs have clearly identified why this information is essentially for them to
MEMORANDUM DECISION AND ORDER - 10
defend against Defendants’ Motion. Simply put, this issue is dispositive: if there are 15 or
more employees, the Court will keep the case; if there are not, the Court will dismiss the
federal claims and remand the state claims. It is self-evident that these facts are relevant
to summary judgment.
The Court is not interested in additional time and expense for anyone involved, but
frankly put, cannot make a determination at this time on Defendants’ Motion.
Defendants’ point however—that the floodgates need not be opened—is well taken. To
that end, the Court will limit discovery to the question of the number of RERC employees
as required by Title VII.4 Accordingly, the Court will withhold judgment on Defendants’
Motion to Dismiss at this time.
ORDER
IT IS ORDERED:
1.
The Court will not rule on Defendants’ Motion to Dismiss (Dkt. 4) at this
time.
2.
Plaintiffs’ Rule 56(d) Motion to Continue (Dkt. 8) is GRANTED.
3.
Discovery shall take place under the following conditions:
4
The Court does not like limiting discovery because inevitable parties will request further
guidance on what is/is not included or allowed. In this case, it is clear that the Court must
determine the true number of employees in order to decide if the claims can even proceed under
Title VII. Defendants should produce any and all discovery related to making this determination,
including, but not limited to, the suggestions in paragraph 15 of DeAnne Casperson’s declaration
filed by Plaintiffs. Dkt. 9-1, ¶ 15.
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a. Discovery is limited to the topic of the number of RERC employees for
purposes of Title VII.
b. Plaintiffs shall have 30 days from the date of this order to serve their
discovery requests on Defendants (if they have not already done so).
c. Pursuant to F.R.C.P. 34(b)(2)(A), Defendants shall have 30 days from
receipt of Plaintiffs’ requests to respond.
4.
Defendants shall then have 30 days from the date of their responses to
Plaintiffs’ discovery requests to file a renewed motion or provide notice to
the Court of their intent to withdraw their original Motion to Dismiss (Dkt.
4).
DATED: January 16, 2018
_________________________
David C. Nye
U.S. District Court Judge
MEMORANDUM DECISION AND ORDER - 12
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