Sinclair v. Charter Communications, Inc., et al

Filing 21

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that plaintiff's motion to remand [# 11 ] is granted and defendants motion to dismiss [# 6 ] is denied as moot. Plaintiff's request for an award of attorney fees and costs is denied. IT IS FURTHER ORDERED that this case is remanded to the Circuit Court of the County of St. Louis, State of Missouri, from which it was removed. Signed by District Judge Catherine D. Perry on October 21, 2013. (BRP)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

B. HOWARD SINCLAIR,
Plaintiff,
vs.
CHARTER COMMUNICATIONS,
INC. and RICHARD DYKHOUSE,
Defendants.

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Case No. 4:13CV1146 CDP

MEMORANDUM AND ORDER
Plaintiff B. Howard Sinclair filed this suit in Missouri state court against his
former employer, Charter Communications, Inc., and its general counsel and senior
vice president Richard Dykhouse. In his petition, Sinclair alleged that Charter and
Dykhouse discriminated against him because of his age and sex. The defendants
removed to this court. Pending before me now are Sinclair‟s motion to remand and
defendant Dykhouse‟s motion to dismiss. Because I do not find that Dykhouse
was fraudulently joined, I will remand the case to state court and will deny as moot
the motion to dismiss.

I.

Background1
Plaintiff Sinclair began working for defendant Charter in April 2006. From

December 21, 2009 to October 9, 2012, Sinclair held the position of senior director
of human resources. His immediate supervisor was Abby Pfeiffer. Throughout
most of Sinclair‟s tenure at Charter, Pfeiffer held the position of vice president of
human resources.
In 2011 and 2012, there were about six or seven employees who reported to
Pfeiffer, including Sinclair. Sinclair, who is in his mid-fifties, was the only male
employee who reported to Sinclair. He is older than all but one of the other
employees who reported to Pfeiffer.
Sinclair alleges that Pfeiffer treated him less favorably than the other
employees who reported to her. Pfeiffer also made age-based remarks in Sinclair‟s
presence; selected females over males for new hires or promotions; and “was
involved in the termination of older and/or male employees who were replaced by
younger and female employees.” (Compl., ¶ 13.)
On May 4, 2012, Sinclair sent a letter of complaint about this treatment to
Robert Quicksilver, Charter‟s executive vice president and Pfeiffer‟s immediate
1

These facts are taken from Sinclair‟s complaint. They are considered as true for the purposes of
this Memorandum and Opinion. See Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009); Neitzke v.
Williams, 490 U.S. 319, 326–27 (1989).

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supervisor. Sinclair requested an investigation of his claims. About a month later,
on June 5, 2012, Quicksilver acknowledged Sinclair‟s letter and informed him that
an investigation was being managed by Richard Dykhouse, Charter‟s general
counsel, with the assistance of an outside law firm.
Later that month, Charter announced that it was opening an office in the
New York City area and relocating some leadership jobs to the new office. On
July 11, 2012, Sinclair received a relocation offer that included a 25% increase to
his salary, a substantial cash bonus, and relocation assistance. The offer was
conditioned on Sinclair relocating no later than December 31, 2012 and “absent
extraordinary circumstances,” accepting the offer no later than August 20, 2012.
Failure to respond by August 20 would be considered a refusal of the offer. If
Sinclair declined the offer, Charter would maintain the right to eliminate his
position and consider his eligibility for severance benefits.
On July 26, 2012, Sinclair informed defendants Charter and Dykhouse that
he would not be able to respond to the relocation offer while the investigation into
his discrimination complaint was ongoing. Later that week, Sinclair received the
actual written relocation offer and learned that he would be required to waive any
potential claims he had against Charter regarding his employment. Twice, Sinclair
contacted the defendants to ask for an extension of the August 20 deadline, citing
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the “extraordinary circumstance” of his pending complaint. Defendant
Dykhouse responded, telling Sinclair the deadline would not be extended.2
Sinclair did not sign the agreement, and the defendants never informed him about
the outcome of the investigation.
Though some younger, female employees were permitted to decline
relocation offers and keep their jobs, Sinclair was not. His job was posted in the
New York City area office sometime in September 2012, and eventually another
person was hired, though Sinclair told the defendants that he intended to accept
that position.
On October 1, 2012, Sinclair filed a charge of age and sex discrimination
with the Missouri Commission on Human Rights. A week later, on October 9,
Charter placed Sinclair on administrative leave and told him his employment
would end on December 31, 2012. The next day, Charter sent an email to
employees, alerting them that Sinclair‟s position had been transferred and the St.
Louis position had “been eliminated, effective immediately.” Though Sinclair

2

Although Sinclair pled that both defendants, Dykhouse and Charter, responded to his email, he
later clarified that Dykhouse was the individual with whom he communicated. Defendants argue
that this amounts to a failure to plead that Dykhouse had any involvement in refusing to extend
the August 20 deadline, but I disagree. When a plaintiff pleads that a natural person and a
corporation responded to his emails, it seems obvious that the natural person was the one doing
the typing.

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sought an open position commensurate with his old post, he was not hired. As a
result of his termination, he lost severance and stock options.
Sinclair filed suit against Charter and Dykhouse on May 6, 2013, in the
Circuit Court of St. Louis County, alleging that the defendants violated the
Missouri Human Rights Act, Mo. Rev. Stat. § 213.055 (sex and age
discrimination) and § 213.070 (retaliation). Defendants removed the suit to this
court and moved to dismiss Dykhouse from this action. Sinclair then moved to
remand.
II.

Discussion3
This federal court has limited jurisdiction. A removing party bears the

burden of proving federal subject-matter jurisdiction, and any doubts must be
resolved in favor of remand. In re Bus. Men’s Assur. Co. of Am., 992 F.2d 181,
183 (8th Cir. 1993). For this court to have jurisdiction based on diversity of
citizenship, there must be complete diversity, and the amount in controversy must
exceed $75,000, exclusive of costs and interest.4 28 U.S.C. § 1332(a); see also 28
U.S.C. § 1441(a) (defendant may remove any civil action over which federal
district court has original jurisdiction). Diversity is complete if no defendant is a

3

Because Sinclair‟s motion to remand is dispositive, I will not address defendant Dykhouse‟s
motion to dismiss, though I have considered the arguments made by both parties in their briefs.
4
There is no dispute that the amount-in-controversy requirement has been met.

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citizen of the same state as any plaintiff. Walker v. Norwest Corp., 108 F.3d 158,
161 (8th Cir. 1997).
At first glance, these statutory requirements are not met. Both plaintiff
Sinclair and defendant Dykhouse were citizens of Missouri at the time the petition
was filed. (E.g., Notice of Removal, ¶¶ 11, 14.) Nonetheless, the defendants argue
that this court has jurisdiction because defendant Dykhouse was fraudulently
joined. See Filla v. Norfolk S. Ry. Co., 336 F.3d 806, 809 (8th Cir. 2003) (where
plaintiff has joined a non-diverse defendant in its state case, defendants can avoid
remand “only by demonstrating that the non-diverse party was fraudulently
joined”).
Fraudulent joinder is “the filing of a frivolous or otherwise illegitimate claim
against a non-diverse defendant solely to prevent removal.” Id. Under the doctrine
of fraudulent joinder, a federal court can ignore the citizenship of a non-diverse
defendant for the purpose of assessing jurisdiction if “there exists no reasonable
basis in fact and law supporting” the plaintiff‟s claim against that defendant. Id. at
810 (quoting Wiles v. Capitol Indem. Corp., 280 F.3d 868, 871 (8th Cir. 2002)).
However, if there is even a “colorable” claim against the non-diverse defendant –
“that is, if the state law might impose liability” on that defendant under the facts
alleged – there is no fraudulent joinder. Id. (emphasis in original); see also Dorsey
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v. Sekisui Am. Corp., 79 F. Supp. 2d 1089, 1091 (E.D. Mo. 1991) (removing party
bears “substantial” burden of proving the alleged fraud).
In this case, the parties disagree over whether Missouri state law might
permit a cause of action against Dykhouse under either provision of the MHRA.
Dykhouse argues that such a cause of action is prohibited for several reasons: (1)
liability for Charter‟s acts cannot be imputed to Dykhouse, and imputed liability is
all Sinclair pled; (2) attorney-client privilege protects Dykhouse from suit; (3)
Dykhouse was not Sinclair‟s supervisor, as required for individual liability under
the MHRA; and (4) Dykhouse‟s actions did not create a tangible change in
Sinclair‟s working conditions and therefore do not constitute an adverse
employment action. None of these arguments prevent Sinclair from making a
colorable claim against Dykhouse. I will address each in turn.
A.

Missouri Human Rights Act
Sinclair brings claims against the defendants under two provisions of the

MHRA. The first provision, Section 213.055, prohibits employers from
discharging or “otherwise” discriminating against “any individual with respect to
his compensation, terms, conditions, or privileges of employment” because of his
age or sex. Its expansive definition of “employer” includes “any person directly
acting in the interest of an employer.” Mo. Rev. Stat. § 213.010(7).
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The second provision, Section 213.070, deems it an unlawful discriminatory
practice “to retaliate or discriminate in any manner against any other person
because such person” has complained about unlawful discrimination prohibited by
§213.055.
There was some early confusion about whether the MHRA imposed liability
on individuals. But Missouri courts settled the issue several years ago, holding that
individuals may be held liable under the MHRA. See Hill v. Ford Motor Co., 277
S.W.3d 659, 669 (Mo. banc 2009). However, only individuals who “directly
oversaw or were actively involved in the discriminatory conduct” can face
individual liability under the MHRA. Reed v. McDonald’s Corp., 363 S.W.3d 134,
139 (Mo. Ct. App. 2012).
B.

Imputed Liability
Defendants first argue that Dykhouse, as an attorney, cannot be liable under

the MHRA for the discriminatory actions of his client Charter. It is not necessary
to resort to attorney-client law for this proposition. Under the MHRA, an
individual – whether or not he is a lawyer – may only be liable for discriminatory
acts he directly oversaw or actively perpetrated. See id.
Defendants argue that Sinclair failed to plead that Dykhouse engaged in any
discriminatory acts. This is not the case. Sinclair alleged that he and Dykhouse
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communicated several times about a potential extension of the August 20 deadline
and that Dykhouse and Charter ultimately refused to extend that deadline because
Sinclair had complained about sex and age discrimination. (See Compl., ¶ ¶ 21,
22, 24, 25, 26, 27, 29.) Sinclair alleged that Dykhouse thereby violated the
discrimination and retaliation provisions of the MHRA. (Id., ¶¶ 44, 45.)
Taking the retaliation provision as an example, § 213.070 prevents any
individual from retaliating in any manner against someone who has complained
about unlawful discrimination. Keeney v. Hereford Concrete Prods., Inc., 911
S.W.2d 622, 624 (Mo. banc 1995) (Section 213.070 uses “exceedingly broad”
language). If Sinclair proves that Dykhouse refused to extend the deadline and that
refusal was motivated by Sinclair‟s internal complaint about sex and age
discrimination, it is possible that “state law might impose liability” on Dykhouse.
Filla, 336 F.3d at 810. In sum, Sinclair adequately pled that Dykhouse engaged
personally in a retaliatory act against him.
C.

Attorney-Client Privilege
Defendants argue that Sinclair cannot maintain an action against Dykhouse

because, as Charter‟s general counsel, he is “incompetent to testify, his
communications are immune from discovery, and he is unable to participate

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substantially in this matter given the duties owed to his client as its attorney.”
(Notice of Removal, ¶ 23.)
Missouri courts have not determined whether an individual can maintain an
action against his former employer‟s in-house counsel under the MHRA. But the
recognition that attorney-client privilege includes certain communications between
a corporation and its counsel is well-established. See, e.g., Upjohn Co. v. United
States, 449 U.S. 383, 389–90 (1981). It is also well-established that, in Missouri,
an attorney is incompetent to testify about “any communication made to the
attorney by such attorney's client in that relation, or such attorney's advice thereon,
without the consent of such client.” Mo. Rev. Stat. § 491.060(3).
However, neither of these principles insulates in-house counsel from all
employment discrimination lawsuits. In fact, the Upjohn Court advised courts to
determine the applicability of attorney-client privilege on a case-by-case basis. Id.
at 396 (in finding privilege, Supreme Court focused on fact that communications
were made by employees to corporate counsel, who was acting as such; at the
direction of corporate supervisors in order to secure legal advice; that the
communications concerned matters within employees‟ corporate duties; and
employees were aware they were being questioned in order for corporation to
obtain advice). As the parties are aware, attorney-client privilege “only protects
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disclosure of communications; it does not protect disclosure of the underlying facts
by those who communicated with the attorney.” Id. at 395. In this case, it is too
early to know what potentially privileged communications Sinclair will seek to
prove his case. See State ex rel. Ford Motor Co. v. Westbrooke, 151 S.W.3d 364,
367 (Mo. banc 2004) (party asserting attorney-client privilege bears the burden of
proving otherwise discoverable information is protected).
To support their contention that Sinclair‟s claims against Dykhouse cannot
proceed, defendants rely on Cimijotti v. Paulsen, 230 F. Supp. 39 (N.D. Iowa
1964). In Cimijotti, an ex-husband sued his former wife and two other women for
conspiracy to damage his reputation, based on statements they had made in a
divorce proceeding before the Catholic Church.5 The court held that “under the
circumstances of this case,” the women‟s statements were absolutely privileged
under Iowa‟s priest-penitent privilege. Id. at 42. The court cautioned that it was
“not holding that it would not be actionable if communicated to other third persons
. . . [or] made outside strictly religious activities.” Id. at 41.
Cimijotti is inapposite here for at least two reasons. First, the court was
considering a motion for summary judgment, not motions to dismiss or remand,
which use different standards. Second, the court relied on uncontested affidavits
5

Although defendants characterize this case as a lawsuit against a priest, the plaintiff did not sue
any priests.

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that explained exactly how, when, and to whom the defendants communicated. In
fact, counsel for plaintiff had conceded that he had no cause of action if the court
found the communications at issue to be privileged. I do not have that type of
evidence here.
Defendants also cite several state cases in which in-house attorneys sued
their former employers for retaliatory discharge. In all but one of the cases
defendants cite, the state court made a case-by-case determination about whether to
permit the retaliatory discharge action, based on evidence gathered during
discovery.6
After these cases, the Third Circuit Court of Appeals decided Kachmar v.
SunGard Data Sys., Inc., in which it reversed a district court‟s dismissal of an inhouse counsel‟s Title VII suit against her former employer. 109 F.3d 173, 186 (3d
Cir. 1997). The Third Circuit summarized both state and federal case law, noting
that most courts had permitted such suits to go forward, at least in certain
circumstances. It found that concerns about disclosure of privileged
communications “alone would not warrant dismissing a plaintiff‟s case, especially
where there are other means to prevent unwarranted disclosure of confidential

6

In fact, in Gen. Dynamics Corp. v. Superior Court, 876 P.2d 487, 489 (Cal. banc 1994), one of
the cases upon which defendants rely, the California Supreme Court emphasized that dismissal at
the pleadings stage “is rarely, if ever, appropriate.”

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information,” such as sealing, protective orders, limited admissibility of evidence,
orders restricting the use of testimony in successive proceedings, and in camera
proceedings. Id. at 181, 182. Ultimately, the Kachmar court concluded that it was
“premature at this stage of the litigation to determine the range of the evidence [the
plaintiff] will offer and whether or how it will implicate the attorney-client
privilege.” Id.; see also Mason v. Mass. Dep’t of Envtl. Prot., 774 F. Supp. 2d 349,
363 n.15 (D. Mass. 2011) (without comment on privilege, court permitted former
employee to sue in-house general counsel under the FMLA).
I agree with Kachmar‟s approach. Though Missouri courts have not ruled
on this issue – whether in-house counsel is protected from suit under the MHRA –
I find that it is possible that Missouri may impose liability. Missouri courts have
interpreted the MHRA to create individual liability for discriminatory and
retaliatory acts, and there is no statutory indication that in-house counsel should be
treated differently from other employees. Hill, 277 S.W.3d at 669; see also
Howard v. City of Kansas City, 332 S.W.3d 772, 784 (Mo. banc 2011).
D.

Supervisory Employees
Next, defendants argue that Sinclair‟s suit against Dykhouse should be

dismissed because Dykhouse was never Sinclair‟s supervisor. Defendants contend
that the MHRA only creates a cause of action against supervisory employees.
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The language of the retaliation provision of the MHRA, § 213.070, is
“exceedingly broad.” Keeney, 911 S.W.2d at 624. In fact, the Keeney court
concluded that a former employee – already terminated by the time a retaliatory act
was alleged to have happened – could sue his former employer under § 213.070. It
reversed the lower courts, finding that their conclusion that an employer-employee
relationship must exist for plaintiff to bring a retaliation claim was “erroneous.”
Id. at 625.
Although the Keeney court noted that it did not need to “explore the outer
boundaries of section 213.070,” there is nothing in the Keeney opinion that makes
me believe section 213.070 applies only to supervisors. Indeed, the court wrote:
Section 213.070 prohibits retaliation “in any manner.” To
retaliate is to “inflict in return.” As used in the statute, retaliation
includes any act done for the purpose of reprisal that results in damage
to the plaintiff even though the act is not otherwise the subject of a
claim in contract or tort. Retaliation does not require that a contractual
relationship exist between the alleged victim of retaliation and the
alleged perpetrator. It merely requires the commission or omission of
an act as a quid pro quo for the filing of a complaint before the
Commission. While the statutory language is broad enough to give us
pause, it is unambiguous and consistent with the purposes of chapter
213.

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Id. at 625 (citation omitted). Cases that say MHRA liability is limited to
supervisory employees might have done so because, generally, supervisors are the
people who have the authority to cause damage to the plaintiff.7
Though Dykhouse was not Sinclair‟s supervisor, he was a supervisor-level
employee whom Sinclair alleges retaliated against him. Whether a supervisorlevel employee who did not supervise the plaintiff might be held liable under the
MHRA is an unsettled question of state law. The question for this court is not
whether state law will impose liability on Dykhouse, but whether state law might
might do so. In making this determination, I have “no responsibility to definitively
settle [an] ambiguous question of state law.” Filla, 336 F.3d at 811 (emphasis in
original). I find it possible that Missouri courts would impose liability on
Dykhouse if Sinclair proves that Dykhouse “directly oversaw” the defendants‟
decision not to extend the deadline; that decision caused him damage; and that
decision was based on a retaliatory motive. See Hayes v. Travelers Indem. Co.,
4:12CV1233 CAS, 2012 WL 5285775, at *4 (E.D. Mo. Oct. 25, 2012) (finding no

7

Defendants cite two federal district court cases that characterized Missouri case law as limiting
MHRA liability to supervisory employees, Halloran v. Houlihan’s Restaurants, Inc.,
4:11CV1028 DGK, 2012 WL 1667598 (W.D. Mo. 2012) and Trickey v. Kaman Indus.
Technologies Corp., 1:09CV26 SNLJ, 2009 WL 1974759 (E.D. Mo. 2009). Neither of these
cases analyzed the scope of the retaliation provision of the MHRA and both involved claims
against co-employees, rather than superiors with any authority over the terms of the plaintiffs‟
employment. To the extent that they do not comport with my ruling, I respectfully decline to
follow them.

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fraudulent joinder where plaintiff joined his HR director, who was not plaintiff‟s
supervisor but had allegedly “advised in” plaintiff‟s termination).
E.

“Adverse Employment Action”
Finally, defendants contend that Dykhouse cannot be held liable under the

MHRA because he did not take an adverse employment action against Sinclair.
Missouri courts have long held that, when interpreting the MHRA, this court can
rely on Title VII precedent only if it does not contradict the plain language of the
MHRA. See Hammond v. Municipal Correction Institute, 117 S.W.3d 130, 136
(Mo. Ct. App. 2003). Although liability under Title VII requires an adverse
employment action, the MHRA does not. See Keeney, 911 S.W.2d at 625 (Section
213.070 creates a cause of action for “any act done for the purpose of reprisal that
results in damage to the plaintiff even though the act is not otherwise the subject of
a claim in contract or tort”).
Instead, the Keeney court held that “retaliation exists under section 213.070
when (1) a person files a complaint . . . and (2) as a direct result, he or she suffers
any damages due to an act of reprisal.” 911 S.W.2d at 625–26. See also Gagnon
v. Sprint Corp., 284 F.3d 839, 850 n.2 (8th Cir. 2002) (recognizing that § 213.070
“prohibits retaliation „in any manner against any person‟ and that this language is
broader than that found under Title VII” [emphasis in original]), abrogated on
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unrelated grounds as recognized in Maxfield v. Cintas Corp., No. 2, 487 F.3d
1132, 1134 (8th Cir. 2007). I find it possible that Missouri courts may impose
liability on Dykhouse if Sinclair proves that, because he filed a complaint of
discrimination, Dykhouse refused to extend the August 20 deadline, and that “as a
direct result,” Sinclair suffered damage.
F.

Request for Attorney Fees
Sinclair has moved, pursuant to 28 U.S.C. § 1447(c), to recover the attorney

fees it incurred because of the defendants‟ improvident removal. Under § 1447(c),
“[a]n order remanding the case may require payment of just costs and any actual
expenses, including attorney fees, incurred as a result of the removal.” Such an
award is discretionary, Martin v. Franklin Capital Corp., 546 U.S. 132, 136
(2005), and granted “only where the removing party lacked an objectively
reasonable basis for seeking removal.” Id. at 141. Although the defendants‟
arguments that Dykhouse was fraudulently joined were not ultimately persuasive,
they do not lack an objectively reasonable basis. Therefore, I will deny Sinclair‟s
motion for attorney fees.
III.

Conclusion
In short, I do not find that any of the arguments raised by defendants present

a barrier to Sinclair making a colorable claim against Dykhouse. Because there
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exists a “reasonable basis in law and fact” for Sinclair‟s cause of action against
Dykhouse, I find that Dykhouse was not fraudulently joined. As such, I will
remand for lack of jurisdiction to Missouri state court and deny as moot the
defendants‟ motion to dismiss.
Accordingly,
IT IS HEREBY ORDERED that plaintiff‟s motion to remand [#11] is
granted and defendants‟ motion to dismiss [#6] is denied as moot. Plaintiff‟s
request for an award of attorney fees and costs is denied.
IT IS FURTHER ORDERED that this case is remanded to the Circuit
Court of the County of St. Louis, State of Missouri, from which it was removed.

CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE

Dated this 21st day of October, 2013.

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