Grimm v. Target Corporation
ORDER denying 44 Motion to Alter/Amend/Supplement Pleadings; denying 47 Motion ; denying 51 Motion ; granting 26 Motion for Judgment on the Pleadings(Written Opinion) Signed by Senior Judge David S. Doty on 2/6/2017. (DLO)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 16-2564(DSD/KMM)
Ivan J. Grimm,
Ivan Grimm, 1413 Holdridge Lane South, Wayzata, MN 55391,
plaintiff pro se.
Matthew E. Damon, Esq. and Nilan Johnson Lewis, PA, 120 South
6th Street, Suite 400, Minneapolis, MN 55402, counsel for
This matter is before the court upon the motion for judgment
on the pleadings by defendant Target Corporation and the motions to
amend, exclude unreliable evidence, and defer dispositive judgment
by pro se plaintiff Ivan J. Grimm.
Based on a review of the file,
record, and proceedings herein, and for the following reasons, the
court grants the motion for judgment on the pleadings and denies
the remaining motions.
This whistleblower dispute arises out of Grimm’s termination
TEKsystems, worked for Target as a contractor from September 2013
to December 14, 2015.
Am. Compl. ¶ 8.7; Answer ¶¶ 8.6, 8.7.
worked on a project referred to as “Hashkey” during his tenure at
The Hashkey project, which is still in development, would
allow Target to provide relevant offers to its customers when
online or using mobile devices.
See Answer Ex. B, at 4.
supervised by Evan Hovorka.
According to Grimm, he first reported wrongdoing by Target on
December 1, 2015, when he sent a “white paper” entitled “Assessing
The Viability Of Target’s Proposed Data Collection And Sharing
Political Environment” to Hovorka and others at Target. Am. Compl.
¶ 9.4; Answer Ex. O, at 2.
Grimm alleges that he discovered
“statistical evidence of widespread illegality involving disruption
of communications between defendants and attorneys and between
attorneys and outside parties in the U.S. Judicial System, as well
as possible changes in the political environment, all of which
would affect laws regarding data sharing which would affect certain
parts of HASHKEY.”
Am. Compl. ¶ 9.4; see also Answer Ex. O, at 3-
He further stated that he “personally believe[s] that the
collection and sharing of information between Target and its
partners is entirely legitimate and should proceed ....”
Ex. O, at 3.
He noted, however, that the “political environment”
“prohibition of the sharing of information between Target and its
He recommended that Target “speed up” Hashkey,
rather than “abandon” or “change” it, “so as to derive maximum
benefit ... in advance of the coming prohibition.”
The white paper neither alleges nor reports fraudulent conduct
by Target, but references, without explanation, the allegedly low
success rate of Sarbanes-Oxley whistleblower actions.
Id. at 6.
Grimm concluded by stating, “It is possible to conclude from the
available evidence that there will eventually be changes in the
political environment which will eventually negate all of Target’s
work in collecting and sharing data with its partners. Target must
now decide what to do with this information.”
The record does
not indicate if Target responded to the white paper.
On December 8, Grimm sent an email to Hovorka and others
complaining about low data quality on the project.
record does not contain a response.
Id. Ex. P.
Then, on December 11, Grimm
sent an email to several Target employees, excluding Hovorka,
recommending that Hashkey be restructured due to a “parade of
Id. Ex. Q, at 2.
Grimm blamed the problems on
the Target team based in India and touted his discovery of the
Hovorka, who apparently received a copy of the email,
responded later the same day by defending the project and warning
Grimm that his placement at Target was in jeopardy.
See id. Ex. R,
at 1 (“Your attitude has to change dramatically and immediately to
continue working here.
Let me know your response by Monday.”).
Hovorka also indicated that Grimm’s concerns were not well founded
and appeared to be grounded in self promotion: “These are critical
improvements that you seem to overlook in favor of your [own
Grimm replied soon after, sending an email to another Target
employee, Edward Chenard, on which he copied Hovorka.
See id. Ex.
In the email, entitled “Essential Issue,” Grimm questioned
whether “sharing guest device information with parties outside of
Target” is moral, legal, and a wise business decision as it would
“[a]t the very least alienate guests.”
He further questioned
whether “something illegal is going on.”
cited Target’s potential use of the project to allow it to track
customers “after they left Target,” as a basis of concern.
closed the email by saying, “Please consult with Sarbanes Oxley
legislation in crafting your response.”
Chenard responded that evening asking Grimm to provide the
following information about his allegations: (1) the information
Grimm believes Target shares with third parties and the identity of
those third parties, (2) the basis for Grimm’s claim that Target
tracks customers once they leave the store, and (3) the sources for
Id. Ex. U, at 1.
At 7:30 a.m. the next
business day, and presumably before Grimm could respond to Chenard,
Id. Ex. V.
Grimm responded as follows:
In so far as I quote Sarbanes Oxley Legislation and I
assumed the role of whistleblower and referred to my
concern of illegal activity in relating to the use of
40,000,000 million American’s data, what you are doing is
a violation of the Sarbanes Act.
Since it also
retaliation which is prohibited by Federal Law.
carries a 5 to 7 year prison term. Do you seriously wish
Id. Ex. W. As Hovorka escorted him from the building that morning,
Grimm threatened to file a Sarbanes-Oxley complaint against Target.
Am. Compl. ¶ 9.16.
Thereafter, Grimm apparently requested that TEKsystems place
him on another team at Target.
Answer Ex. S, at 2.
explained to TEKsystems that Grimm was not welcome to join any team
“progressively got worse” during his tenure there.
Hovorka cited issues dating back six months.
Id. at 1.
On December 21, 2015, Grimm filed a complaint against Target
with the Occupational Safety and Heath Administration (OSHA),
Sarbanes-Oxley by terminating him for reporting possibly criminal
activity relating to customer data.
See Answer Ex. A.
responded, denying the allegations, and Grimm submitted numerous
supplemental filings in support of his position. See id. Exs. B-M.
In July 2016, Grimm advised OSHA that he would proceed in federal
court rather than pursue his OSHA claim.
See id. Ex. M, at 7.
Although the details are hard to discern, Grimm alleges that
after his termination, he reported Target to the Securities and
Exchange Commission for potential Sarbanes-Oxley violations due to
Am. Compl. ¶¶ 14-15.
He does not indicate whether the
SEC responded to his report.
On July 15, 2016, Grimm appears to have filed a complaint with
the Minnesota Department of Human Rights claiming that Target
discriminated and retaliated against him based on his age (63) and
Answer Ex. M, at 4-6; see also Am.
national origin (American).
Compl. ¶ 9.8.
The record does not indicate whether the MDHR ever
reached a decision, nor does the record establish whether Grimm
Grimm filed this suit on August 1, 2016, followed by a lengthy
and dense amended complaint, alleging that Target violated the
1514A(a)(1), and the Dodd-Frank Act, 15 U.S.C. § 78u-6(h)(1)(A), by
Grimm also seems to persist in his claim that Target
discriminated against him due to his age and national origin.
Am. Compl. ¶¶ 9.8, 9.10.
Id. at 5.
Grimm seeks $6.66 million in damages.
Target now moves for judgment on the pleadings and
Grimm, in turn, moves to amend, exclude unreliable evidence, and
defer dispositive judgment.
Motion for Judgment on the Pleadings
Standard of Review
The same standard of review applies to motions under Federal
Rules of Civil Procedure 12(c) and 12(b)(6).
Ashley Cty., Ark. v.
Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009).
Thus, to survive
a motion for judgment on the pleadings, “a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.”
Braden v. Wal–Mart Stores,
Inc., 588 F.3d 585, 594 (8th Cir. 2009) (citation and internal
quotation marks omitted).
“A claim has facial plausibility when
the plaintiff [has pleaded] factual content that allows the court
to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
Although a complaint need not contain detailed factual
allegations, it must raise a right to relief above the speculative
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
“[L]abels and conclusions or a formulaic recitation of the elements
of a cause of action” are not sufficient to state a claim.
556 U.S. at 678 (citation and internal quotation marks omitted).
The court does not consider matters outside of the pleadings
under Rule 12(c).
Fed. R. Civ. P. 12(d).
The court, however, may
consider matters of public record and materials that do not
“necessarily embraced by the pleadings.”
Porous Media Corp. v.
Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (citation and
internal quotation marks omitted).
In this case, the OSHA filings
and related exhibits are necessarily embraced by the pleadings and
are properly considered.
terminating an employee1 in retaliation for reporting “‘any conduct
which the employee reasonably believes constitutes a violation of
section 1341 [mail fraud], 1343 [wire fraud], 1344 [bank fraud], or
1348 [securities fraud], any rule or regulation of the Securities
and Exchange Commission, or any provision of Federal law relating
to fraud against shareholders.’”
Beacom v. Oracle Am., Inc., 825
F.3d 376, 379 (8th Cir. 2016) (quoting 18 U.S.C. § 1514A(a)(1)(C)).
“Only activity ‘definitively and specifically relate[d] to one of
the six enumerated categories of misconduct ..., i.e. mail fraud,
wire fraud, bank fraud, securities fraud, violation of an SEC rule
or regulation, or violation of a federal law relating to fraud
against shareholders’ is protected by [the statute].”
The court assumes for purposes of the instant motion that
Grimm was a Target employee under the broad definition of that term
under Sarbanes-Oxley. See 29 C.F.R. § 1980.101(g) (“Employee means
an individual presently or formerly working for a covered person,
an individual applying to work for a covered person, or an
individual whose employment could be affected by a covered
Stifel, Nicolaus & Co., 812 F. Supp. 2d 975, 987 (D. Minn. 2011)
(quoting Fraser v. Fiduciary Tr. Int’l, No. 04-6958, 2009 WL
2601389, at *5 (S.D.N.Y. Aug. 25, 2009)).
Sarbanes-Oxley whistleblower claims are analyzed under a
Beacom, 825 F.3d at 379.
plaintiff must prove by a preponderance of the evidence that:
he engaged in protected activity; (2) his employer knew he engaged
in protected activity; (3) he suffered an adverse employment
action; and (4) the protected activity was a contributing factor in
the adverse action.2
Id. at 379–80.
If the plaintiff meets his
burden, “the employer may prove by clear and convincing evidence
that it would have taken the same adverse action even if the
employee had not engaged in the protected activity.”
Id. at 380.
“Sarbanes–Oxley requires the employee to hold a reasonable
belief that the employer’s conduct amounts to fraud against the
“The employee must subjectively believe the
In other words, the plaintiff “must establish
that a reasonable person in his position, with the same training
As to the last factor, the court only considers the alleged
conduct leading to the adverse employment action. Any subsequent
conduct lacks the requisite causal nexus between the conduct and
the adverse employment action. As a result, the court considers
Grimm’s allegations of conduct occurring before his termination on
December 14, 2015.
The court does not consider any conduct
thereafter, including Grimm’s alleged reports to the SEC.
and experience, would have believed [his employer] was committing”
Id. at 381.
retaliation as a matter of law given his unequivocal admission that
he does not believe that Target engaged in fraudulent activity: “I
have never, ever claimed that Target was directly engaged in
Pl’s. Opp’n Mem. ¶ 29.0.
In light of this admission,
Grimm cannot establish either that he had a subjective or an
objectively reasonable belief that Target was engaged in fraud
against its shareholders. Indeed, he admits he held no such belief
communications to Target in which he vaguely complained about
Target’s potential use of private data, but never suggested that
Target was engaged in fraud of any kind against its shareholders or
To the contrary, the white paper, for example,
curtailment by potential changes in the political environment. The
document cannot be reasonably interpreted to be even a veiled
report of wrongdoing by Target against its shareholders.
subsequent communications are similarly lacking.
The December 8
email and responses reflect nothing more than Grimm’s complaints
about the quality of other employees’ work.
The “Essential Issue”
email comes the closest to raising an issue about potential
illegalities, but it is focused on the propriety of data sharing.
In the email, Grimm does not expressly or impliedly complain that
Target is engaged in fraud of any kind.
Absent a report of
fraudulent conduct, the email cannot be considered a report of a
Sarbanes-Oxley violation as a matter of law.
2d at 987.
Miller, 812 F. Supp.
Grimm’s out-of-context references to Sarbanes-Oxley in
some of his communications are insufficient to transform the
content of his communications into reports that Target was in
Sarbanes-Oxley claim must be dismissed.
The Dodd–Frank Act prohibits an employer from discharging a
protected under the Sarbanes–Oxley Act of 2002.”
Dodd–Frank likewise fails.
Beacom, 825 F.3d at 381.
Age Discrimination Claim
The court must also dismiss the age and national origin
discrimination claim because Grimm does not allege that he filed a
charge of discrimination with the EEOC before filing suit, as
See 29 U.S.C. § 626(d)(1)(B)(“No civil action may be
commenced by an individual under this section until 60 days after
a charge alleging unlawful discrimination has been filed with the
Equal Employment Opportunity Commission.”).
As a result, Target’s
motion for judgment on the pleadings is granted.
Motion to Amend
Grimm moves to once again amend his complaint, this time to
include a claim under § 1514A(a)(2) of Sarbanes-Oxley, which
prohibits retaliation against an employee who:
participate[s] in, or otherwise assist[s] in a proceeding
filed or about to be filed ... relating to an alleged
violation of section 1341 [mail fraud], 1343 [wire
fraud], 1344 [bank fraud], or 1348 [securities fraud],
any rule or regulation of the Securities and Exchange
Commission, or any provision of Federal law relating to
fraud against shareholders.
“A ... court should freely give leave to a party to amend its
pleadings when justice so requires ...; however, it may properly
deny a party’s motion to amend its complaint when such amendment
... would be futile.” Popoalii v. Corr. Med. Servs., 512 F.3d 488,
497 (8th Cir. 2008) (citations omitted).
An amendment is futile
when it would not survive a motion to dismiss.
See In re Senior
Cottages of Am., LLC, 482 F.3d 997, 1001 (8th Cir. 2007) (citations
omitted) (“[W]hen a court denies leave to amend on the ground of
futility, it means that the court reached a legal conclusion that
the amended complaint could not withstand a [motion to dismiss]
Here, Grimm’s amendment would be futile for the same reasons
requires the whistleblower to participate in a proceeding involving
the kinds of fraud enumerated in the statute, particularly fraud
against a company’s shareholders.
That essential element is
lacking in this case as a matter of law.
allegations in support of the proposed amendment appear to relate
to Target’s litigation conduct, rather than its response to Grimm’s
As a result, the motion to amend
III. Motion to Exclude Unreliable Evidence
Grimm next moves to exclude the December 11, 2015, email in
which Hovorka warned him that he would be terminated if he did not
improve his behavior.
Even if it were appropriate to consider the
admissibility of evidence at this time, the court finds no basis to
exclude the email.
Hovorka sent the email from his Target account
to Grimm’s Target account.
There is no indication that the email
was tampered with or that Grimm did not receive it.
email is not material to the court’s analysis above. The motion is
Motion to Defer Dispositive Judgment
Grimm lastly moves to defer judgment because the case must be
decided by a jury.
The court disagrees.
As discussed above, the
amended complaint does not “contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on
Braden, 588 F.3d at 594.
Under these circumstances,
Grimm is not entitled to a jury trial, and the motion is denied.
Accordingly, based on the above, IT IS HEREBY ORDERED that:
The motion for judgment on the pleadings [ECF No. 26] is
The motion to amend [ECF No. 44] is denied;
The motion to exclude unreliable evidence [ECF No. 47] is
The motion to defer dispositive judgment [ECF No. 51] is
The case is dismissed with prejudice.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: February 6, 2017
s/David S. Doty
David S. Doty, Judge
United States District Court
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?