Equal Employment Opportunity Commission v. River View Coal, LLC
Filing
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MEMORANDUM OPINION AND ORDER denying 13 Motion to Dismiss for Failure to State a Claim; granting 24 Motion to Amend Complaint. Signed by Chief Judge Joseph H. McKinley, Jr on 5/4/12. cc:counsel (JBM)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
OWENSBORO DIVISION
CIVIL ACTION NO. 4:11-CV-00117-JHM
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION
PLAINTIFF
V.
RIVER VIEW COAL, LLC
DEFENDANT
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendant River View Coal, LLC’s Motion to Dismiss
[DN 13] and Plaintiff Equal Employment Opportunity Commission’s Motion for Leave to File
Amended Complaint [DN 24]. Fully briefed, this matter is ripe for decision. For the following
reasons, the Court DENIES Defendant’s motion to dismiss and GRANTS Plaintiff’s motion for
leave to file amended complaint.
I. BACKGROUND
Title VII of the Civil Rights Act of 1964 gives the Equal Employment Opportunity
Commission (“EEOC”) power to file a civil action in order to prevent unlawful employment
practices. 42 USC § 2000e-5(f)(1). In the present case, the EEOC has filed suit on behalf of Shawn
King and a class of Black applicants alleging that River View Coal, LLC (“River View”) deprived
them of equal employment opportunities because of their race. Thirteen Black employment
applicants (“charging parties”) filed charges of discrimination against River View between March
9, 2010 and April 14, 2010.
The EEOC issued Letters of Determination for each charging party after conducting an
investigation and finding reasonable cause to believe that a class of Black applicants was denied
employment because of race in violation of Title VII. The Letters of Determination were sent to
River View on April 21, 2011, and a proposed conciliation agreement was sent on May 4, 2011.
The EEOC’s proposed conciliation agreement included, among other things, River View agreeing
to not discriminate based on race, implementing a policy of non-discrimination, training for all
management, supervisory, human resources and office personnel, and offers of instatement to the
Charging Parties. Monetary relief included a total of $1,725,000 to the charging parties as back pay
and compensatory and punitive damages. The parties conducted a conciliation conference on May
31, 2011. Discussions continued between the parties and on July 20, 2011, River View offered a
total of $26,000 in exchange for withdrawal of the charges. The EEOC then determined that the
River View’s offer was nominal and further conciliation efforts would be futile. River View desired
to continue conciliation, and on August 24, 2011, the EEOC invited River View to propose a
meaningful offer by August 29, 2011. River View felt it was inappropriate to bid against its own
offer and asked the EEOC to first counteroffer. The EEOC then filed this present action. River
View has filed a motion to dismiss claiming that the EEOC’s Complaint failed to state a claim upon
which relief may be granted and the EEOC failed to conciliate in good faith. While the EEOC
disagrees with River View’s grounds for the motion to dismiss, it has since filed a motion for leave
to file an Amended Complaint.
II. STANDARD OF REVIEW
Upon a motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6), a
court “must construe the complaint in the light most favorable to plaintiff,” League of United Latin
Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007) (citation omitted), “accept all well-pled
factual allegations as true[,]” id., and determine whether the “complaint states a plausible claim for
relief[,]” Ashcroft v. Iqbal, 556 US 662, 679 (2009). Under this standard, the plaintiff must provide
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the grounds for its entitlement to relief, which “requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007). A plaintiff satisfies this standard only when it “pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 US at 678. A complaint falls short if it pleads facts “merely consistent with a defendant's
liability” or if the alleged facts do not “permit the court to infer more than the mere possibility of
misconduct.” Id. at 678, 679. Instead, the allegations must “‘show[ ] that the pleader is entitled to
relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).
If “matters outside the pleadings are presented to and not excluded by the court” when ruling
upon a motion under Rule 12(b)(6), the Federal Rules require that “the motion must be treated as
one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d). This Rule does not require the
Court to convert a motion to dismiss into a motion for summary judgment every time the Court
reviews documents that are not attached to the complaint. Greenberg v. Life Ins. Co. of Va., 177
F.3d 507, 514 (6th Cir. 1999). “[W]hen a document is referred to in the complaint and is central to
the plaintiff's claim . . . [,] the defendant may submit an authentic copy [of the document] to the
court to be considered on a motion to dismiss, and the court's consideration of the document does
not require conversion of the motion to one for summary judgment.” Id. (quotation omitted).
III. DISCUSSION
A. Motion to Dismiss
Defendant has challenged the EEOC’s Complaint on two grounds. Defendant has moved
for dismissal under Fed. R. Civ. P. 12(b)(6) for failure to state a claim and for failure to conciliate
in good faith.
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1. Failure to Conciliate in Good Faith
As support for dismissal of the Complaint, Defendant argues that the EEOC failed to
conciliate in good faith. Defendant states that the EEOC sent Defendant a conciliation proposal, but
provided no information or support for the EEOC’s findings that River View engaged in racial
discriminatory hiring practices. (Def.’s Mot. Dismiss, 9 [DN 13].) Particularly, Defendant contends
that it was forced to respond to the EEOC’s conciliation proposal in a “vacuum;” the EEOC
unilaterally stated conciliation had failed; and after re-opening the conciliation process, the EEOC
forced Defendant to bid against itself.
The EEOC maintains that it satisfied its statutory requirement to conciliate and that it is only
required to notify Defendant of the nature of the violation and how it could be remedied. According
to the EEOC, the Letters of Determination “expressly set out that each Charging Party alleged he
was denied employment due to his race, Black, and that an analysis of River View’s hiring practices
supported the allegations and revealed a class of Black applicants who were also denied employment
because of their race.” (Pl.’s Response to Mot. Dismiss, 8 [DN 17].) The proposed conciliation
agreement sought monetary and non-monetary relief and was sent to Defendant on May 4, 2011.
Correspondence between the parties continued for four months during which the EEOC contends
that it provided Defendant with sufficient information regarding its claims, and, after Defendant’s
offer on July 27, 2011, determined that conciliation had failed and that further efforts would be
futile. (Id. at 10.) The EEOC states that the offer was nominal and did not address the class wide
claim or non-monetary relief. It is willing to consider a reasonable, good faith offer from Defendant
if made during litigation, but the EEOC argues that continuing litigation will best promote an
efficient and fair resolution.
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After determining there is reasonable cause as to claims of unlawful employment practices,
the EEOC “shall endeavor to eliminate any such alleged unlawful employment practice by informal
methods of conference, conciliation, and persuasion.” 42 USC § 2000e-5(b). If the EEOC 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[.]” 42 USC § 2000e-5(f)(1) (emphasis
added). The Sixth Circuit stated 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.” E.E.O.C. v. Keco Industries, Inc., 748 F.2d 1097, 1102 (6th Cir. 1984). The Sixth
Circuit emphasized that the manner and substance of the conciliation “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.
Defendant points to E.E.O.C. v. Asplundh Tree Expert Co. as support for its argument that
the EEOC acted in bad faith. 340 F.3d 1256 (11th Cir. 2003). However, the EEOC’s actions in
Asplundh are distinguishable from the case at present. In Asplundh, a worker for Asplundh was
harassed by a worker from Gainesville Regional Utilities, which had contracted Asplundh to dig
ditches and lay underground cable in Gainesville, Florida. 340 F.3d at 1257. The Eleventh Circuit
determined that after a three year investigation, the EEOC issued a Letter of Determination, and only
one week later proposed a nation-wide Conciliation Agreement, providing just 12 business days for
Asplundh’s general counsel in Philadelphia to accept the agreement or submit a counter proposal.
Id. at 1259-60. Further, the Eleventh Circuit noted that the EEOC did not “identify any theory on
which Asplundh could be held liable for the alleged conduct of [the Gainesville Regional Utilites’
employee].” Id.
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In the present case, the parties met and negotiated for almost four months, there was no third
party involved as in Asplundh, and Defendant was given the opportunity to counter offer. The
EEOC provided the required information, supplemented information regarding the EEOC’s
investigation, and reopened conciliation at Defendant’s request. The EEOC gave Defendant an
opportunity to dispute the charges, and did not file any claims under section 709 after Defendant
provided relevant documents that countered the record keeping violation claim. 42 U.S.C. § 2000e8(c). As to the section 706 charges, the EEOC determined that Defendant’s conciliation proposal
was nominal and was a rejection of the EEOC’s offer. As the statute allows the EEOC to file a civil
suit if it does not receive an acceptable conciliation agreement, the EEOC acted appropriately after
Defendant rejected its proposal. See Keco 748 F.2d 1097; E.E.O.C. v. Spectrum Health Worth
Home Care, Inc., 2006 WL 519779 at * 5 (W.D. Mich. March 2, 2006). For these reasons, the Court
finds that the EEOC acted in good faith in its conciliation efforts.
2. Failure to State a Claim
Defendant moves to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) and argues that in the
“Statement of Claims” section of EEOC’s Complaint, there is not a single factual allegation.
According to the Defendant, “[t]he EEOC’s Complaint contains only unfounded and completely
inaccurate legal conclusions.” (Def.’s Mot. Dismiss, 5 [DN 13].) In support of its argument,
Defendant cites to two Western District of Kentucky cases. In Nathan v. Papa John’s Intern., Inc.,
the district court dismissed an alleged discrimination complaint for failing to identify the plaintiff’s
race, “what positions he applied to, when he applied, or who filled these positions.” 2011 WL
2173739, *1 (W.D.Ky. June 2, 2011). Similarly, in Lea v. U.S. Dept. of Agriculture, the complaint
alleges a conspiracy to discriminate, was dismissed because “no specific facts [were] presented to
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allow the Court to reasonably conclude that the alleged discrimination was motivated by a classbased animus[.]” 2011 WL 182698, *6 (W.D. Ky., Jan. 19, 2011).
In response, the EEOC states that the Complaint complies with Fed. R. Civ. P. 8(a)(2) which
requires “a short and plain statement of the claim showing that the pleader is entitled to relief[.]”
The EEOC argues that its “complaint in the present action complies with Fed. R. Civ. P. 8(a) as
interpreted by the Supreme Court” in Swierkiewicz and Twombly. (Pl’s Response to Mot. To
Dismiss, 6 [DN 17].) In Swierkiewicz v. Sorema N.A., a case involving racial discrimination in
violation of Title VII, the Supreme Court found that a complaint that included “events leading to
[the] terminations, provided relevant dates, and included the ages and nationalities of at least some
of the relevant persons involved with his termination” was sufficient to withstand a motion to
dismiss. 534 U.S. 506, 514 (2002). The EEOC points out that the Supreme Court later clarified the
Swierkiewicz decision, affirming that it was not applying a “heightened” pleading standard, and
Rule 8(a) requires only that the plaintiff “give the defendant fair notice of what the ... claim is and
the grounds upon which it rests.” Twombly, 550 U.S. at 550, 570. According to the EEOC, the
Complaint “alleges disparate treatment and identifies the nature of the employment action at issue
(failure to hire) and the protected basis on which discrimination occurred (against AfricanAmericans)” and “alleges the discrimination occurred at Defendant’s Waverly, Kentucky facility
since at least August 1, 2008.” (Id. at 6.) In the alternative though, the EEOC has filed a motion
for leave to file an Amended Complaint, which if granted, would make Defendant’s argument of
lack of factual allegations moot. [DN 24].
As the EEOC has filed a motion for leave to file an Amended Complaint in order to cure any
deficiencies in the original Complaint, the Court must first address whether it will grant the EEOC’s
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motion for leave to file an Amended Complaint. [DN 24].
B. Motion to Amend
The EEOC has filed a motion for leave to file an Amended Complaint. [DN 24]. This motion
for leave to file an Amended Complaint is governed by Fed. R. Civ. P. 15(a)(2) which states that,
“a party may amend its pleading only with the opposing party’s written consent or the court’s leave.”
A district court should freely grant a plaintiff leave to amend a pleading “when justice so requires.”
Fed. R. Civ. P. 15(a)(2). However, a district court may deny a motion to amend where there is
“undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of
allowance of the amendment, futility of amendment, etc.” Foman v. Davis, 371 U.S. 178, 182
(1962).
1. Futility of Amendment
In its response, Defendant does not argue that the Amended Complaint lacks factual
allegations, but states that the proposed amendment is futile, and, in support, first reiterates its
argument that both the Complaint and the Amended Complaint fail “to plead a facially plausible
claim or put River View on notice of the claims against it.” (Def.’s Response to motion for leave
to file amended complaint, 3 [DN 25].) The EEOC’s original Complaint asks for relief under
section 706 and 707 of Title VII of the Civil Rights Act (“section 706" and “section “707") while
the Amended Complaint only asks for relief under section 706. 42 USC §§ 2000e-5, 2000e-6.
Section 706 allows for the EEOC to file suit against a private employer on behalf of a person
claiming to be aggrieved by unlawful employment practices. Id. Section 707 allows a suit to be
filed against a private employer if there is “reasonable cause to believe that any person is engaged
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in a pattern or practice” of unlawful employment practices. Id. Defendant argues that the Amended
Complaint is “vague, confusing and fails to put River View on notice of whether the EEOC is in fact
giving up any alleged ‘pattern or practice’ claim against River View.” (Def.’s Response, 5 [DN
25].) Defendant points out that section 706 and section 707 require different proof. According to
Defendant, the Amended Complaint still refers to the individuals as a “class” in accordance with
section 707, but does not plead “a facially plausible claim for relief with respect to every individual
on behalf of whom relief is sought” as required under section 706. (Id. at 6.)
Second, Defendant argues that the EEOC’s motion for leave to file an amended complaint
is futile because a failure to hire is not a continuing violation and the EEOC failed to plead facts
regarding the timeliness of its claims, incorrectly pleading that the violations are continuing.
Defendant contends that the timeliness issues are fatal deficiencies in the EEOC’s amended
complaint.
The EEOC responds to Defendant’s first argument by citing several cases where class
discrimination claims were brought under section 706 of Title VII. Furthermore, the EEOC argues
that the McDonnell Douglas standard necessary to prove a section 706 claim is a an evidentiary
standard, which differs from the pleading requirement of a complaint. (Id. at 5 (citing Lindsay v.
Yates, 498 F.3d 434, 440 (6th Cir. 2007)).) The EEOC claims that Defendant is confusing the
burden of proof with whether the EEOC’s Complaint states a claim upon which relief can be
granted.
Second, in response to the timeliness issues, the EEOC states that its Amended
Complaint indicates ongoing discrimination as well as current claims and Defendant did not raise
timeliness as an affirmative defense in its motion to dismiss, so it is barred from raising the defense.
Even if allowed to raise timeliness as an affirmative defense, the EEOC argues that “[q]uestions of
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timeliness in employment discrimination cases require factual development” and should be decided
after further discovery. (Id. at 7.)
The Sixth Circuit has discussed the McDonnell Douglas framework, stating it “‘is an
evidentiary standard, not a pleading requirement.’” Lindsay v. Yates, 498 F.3d 434, 439 (6th Cir.
2007) (quoting Swierkiewicz v. Sorema, N.A., 534 U.S. 506, 510 (2002)). In a federal employment
discrimination case, the Supreme Court specifically stated that a plaintiff is not required to plead
facts to satisfy the prima facie requirements in the complaint, but must “give the defendant fair
notice of what the plaintiff’s claim is and the grounds upon which it rests.” Swierkiewicz, 534 U.S.
at 512 (quotation omitted). Defendant correctly argues that a claim brought under section 706
requires different proof from a claim brought under section 707, however, evidentiary standards are
not applicable in a motion to dismiss and, therefore, would not make the Amended Complaint futile.
See id.; Twombly, 550 U.S. 544, 563 fn 8 (2007). Likewise, the EEOC’s use of the terms “class”
and “pattern and practice” in its Amended Complaint does not make the Amended Complaint futile.
As a court “must construe the complaint in the light most favorable to plaintiff,” the EEOC’s use
of certain terms should not take away from whether or not the allegations demonstrate that the
charging parties are entitled to relief. Bredesen, 500 F.3d at 527 (citation omitted). As stated
previously, a plaintiff satisfies this standard when it “pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556
US at 678. In its Amended Complaint, the EEOC has stated the claiming parties’ race, relevant
dates, positions applied for, and that the applicants were qualified for the positions which were filled
with less qualified white applicants. (Amended Complaint, ¶¶ 10-12.) These facts apprise
Defendant of the EEOC’s claim and “the grounds upon which they rest[.]” Yates, 498 F.3d at 440.
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Furthermore, the Court agrees with the EEOC that questions of timeliness of the claims is
an issue which can only be decided after the facts are developed. Therefore, the Court concludes
that the EEOC has provided sufficient facts and the Amended Complaint is not futile.
2. Prejudice
Lastly, Defendant states that it will be prejudiced by the Amended Complaint primarily
because of the legal costs associated with briefing its motion to dismiss and response to motion for
leave to amend complaint.
The EEOC addresses Defendant’s prejudice arguments by stating that the motion to amend
was filed at an early stage of the litigation, before Defendant has answered, and, outside of ordinary
litigation expenses, the Defendant will not “expend significant additional resources to conduct
discovery and prepare for trial.” (Id. at 10 (citing Phelps v. McLellan, 30 F.3d 658, 662-63 (6th Cir.
1994)).) The Court agrees.
IV. CONCLUSION
For the reasons set forth above, IT IS HEREBY ORDERED that Defendant’s motion to
dismiss [DN 13] is DENIED and Plaintiff’s motion for leave to file amended complaint [DN 24]
is GRANTED.
May 4, 2012
cc: counsel of record
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