Franklin v. Oklahoma Department of Consumer Credit et al

Filing 22

ORDER granting in part and denying in part 6 Motion to Dismiss; granting in part and denying in part 7 Motion to Dismiss. Signed by Honorable Timothy D. DeGiusti on 5/19/2017. (mb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
ELISABETH A. FRANKLIN,
Plaintiff,
vs.
STATE OF OKLAHOMA ex rel.
OKLAHOMA DEPARTMENT OF
CONSUMER CREDIT, et al.,
Defendants.

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Case No. CIV-16-1103-D

ORDER
Before the Court are Defendant State of Oklahoma’s Motion to Dismiss [Doc.
No. 7] and Defendants Lesher, S’Renco and Todd’s Motion to Dismiss [Doc. No. 6], filed
pursuant to Fed. R. Civ. P. 12(b)(1) and (b)(6). 1 The Motions primarily challenge the
sufficiency of Plaintiff’s pleading to state: race discrimination claims under Title VII of
the Civil Rights Act of 1964 as amended, 42 U.S.C. § 2000e et seq. (Count I) and 42 U.S.C.
§ 1981 (Count II); an age discrimination claim under Oklahoma’s Anti-Discrimination Act
(“OADA”), Okla. Stat. tit. 25, § 1301 et seq. (Count III); 2 and tort claims of interference
with a contractual relationship and with prospective economic advantage (Counts IV

1

Defendants also moved for dismissal due to insufficient service of process pursuant to
Fed. R. Civ. P. 12(b)(5). Plaintiff subsequently perfected service, and Defendants concede this
aspect of their Motions is moot. See Defs.’ Reply Br. [Doc. No. 19] at 7; Def. State’s Reply Br.
[Doc. No. 20] at 5.
2

Plaintiff refers to the statute in her pleading as the “ODEA” and in her briefs as the
“Oklahoma Discrimination in Employment Act.” See Pet. [Doc. No. 1-2], ¶¶ 31-33; Pl,’s Resp.
Br. [Doc. No. 18] at 8-9. The Court utilizes a more commonly used name for the statute.

and V).

Defendants also raise issues regarding sovereign immunity from suit under

Oklahoma’s Governmental Tort Claims Act (“GTCA”), Okla. Stat. tit. 51, § 151 et seq.;
and qualified immunity of individuals under federal law. Plaintiff has filed responses
[Doc. Nos. 17 & 18] in opposition to the Motions, and Defendants have replied [Doc.
Nos. 19 & 20]. The Motions are fully briefed and at issue.
Factual and Procedural Background
Plaintiff is a former employee of Defendant Oklahoma Department of Consumer
Credit (the “Department”) who is Native American and over 40 years of age. She claims
the Department terminated her employment on June 23, 2015, based on her race and age.
Plaintiff alleges that the termination decision was made by Defendants Scott Lesher
(executive director of the Department), Vanessa Todd (regional manager), and Drew
S’Renco (chief examiner). As pertinent to the Motions, Plaintiff alleges that Mr. Lesher
used racial slurs regarding Native American and Hispanic employees, made ageist remarks,
and selected younger individuals to replace employees over 40 years of age. Plaintiff
alleges that Ms. Todd treated older, Native American employees less favorably than
younger, non-Native American ones and that Mr. S’Renco terminated Plaintiff without
warning after assuring her that she was doing well and her performance was satisfactory.
Plaintiff also provides facts to establish her exhaustion of administrative remedies with the
EEOC, her compliance with the GTCA’s notice requirements, and her timely suit following
the receipt of an EEOC notice of a right to sue and the denial of her tort claim.

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Standard of Decision
“Motions to dismiss for lack of subject matter jurisdiction ‘generally take one of
two forms: (1) a facial attack on the sufficiency of the complaint’s allegations as to subject
matter jurisdiction; or (2) a challenge to the actual facts upon which subject matter
jurisdiction is based.’” City of Albuquerque v. United States Dep’t of Interior, 379 F. 3d
901, 906 (10th Cir. 2004) (citing Ruiz v. McDonnell, 299 F. 3d 1173, 1180 (10th Cir.
2002)). In this case, Defendants challenge only the sufficiency of Plaintiff’s factual
allegations to overcome sovereign immunity.
“To survive a motion to dismiss [under Rule 12(b)(6)], a 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) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)); see Robbins v. Oklahoma, 519 F. 3d 1242, 1247 (10th
Cir. 2008). “A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678. In assessing plausibility, the Court first
disregards conclusory allegations and “next consider[s] the factual allegations in [the]
complaint to determine if they plausibly suggest an entitlement to relief.”

Id. at 681.

Discussion
A.

Sovereign Immunity
Defendants contend Plaintiff can bring her state law claims against them only to the

extent the GTCA waives the Department’s sovereign immunity from suit and permits

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individual employees to be sued. The GTCA authorizes a suit against the State or its
departments based on conduct of employees “acting within the scope of their employment,”
that is, “in good faith within the duties of the employee’s office or employment.” Okla.
Stat. tit. 51, §§ 152(12), 153(A). The Department contends Plaintiff’s age discrimination
claim requires a finding that the employees who terminated Plaintiff engaged in unlawful
discrimination, and necessarily precludes a finding that they acted in good faith. The
Department provides no legal authority for this novel argument but, instead, relies on case
law concerning torts that require proof of an element that excludes good faith conduct, such
as malicious prosecution, fraud, and intentional infliction of emotional distress. See Def.
State’s Mot. [Doc. No. 7] at 10-11. The Department does not identify any element of an
age discrimination claim that necessarily is inconsistent with good faith conduct. 3
Therefore, the Court rejects this basis for dismissal of Plaintiff’s age discrimination claim
against the Department.
Defendants Lesher, Todd and S’Renco (the “Individual Defendants”) assert the
GTCA immunizes them from liability and suit for acts done within the scope of their
employment. See Okla. Stat. tit. 51, § 153(B), (C). They contend Plaintiff’s tort claims
of interference with her employment relationship and a prospective economic advantage
are based solely on their alleged role in terminating Plaintiff’s employment with the

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Plaintiff argues in her response brief that OADA claims are not tort claims to which the
GTCA applies at all, citing Bruehl v. Okla. Indigent Defense Sys., No. CIV-13-1247-HE, 2014 WL
2879744 (W.D. Okla. June 24, 2014). The Department did not move to dismiss on this basis, and
thus the Court declines to address the issue, particularly in light of recent amendments extending
the GTCA beyond tort claims. See Okla. Stat. tit. 51, § 152(14).
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Department and, thus, conduct that necessarily occurred within the scope of their job
duties. As discussed infra, however, a tortious interference claim can only be brought
against the Individual Defendants if they were not acting as agents of the Department.
Thus, if Plaintiff’s pleading sufficiently states the type of tort claim asserted, a suit against
the Individual Defendants outside of the protection of the GTCA is available. See id.
§ 153(C) (employee “may be named as defendant under alternative allegations that such
person did not act within the scope of employment”).
B.

Race Discrimination Claims
Plaintiff asserts claims of race discrimination against the Department under

Title VII and against the Individual Defendants under § 1981 based on the same factual
allegations. Defendants contend Plaintiff’s allegations are insufficient to state a claim on
which relief can be granted under Title VII or § 1981. 4 Under the circumstances, the
elements required to prove a claim under Title VII and § 1981 are the same. See Crowe
v. ADT Sec. Servs., Inc., 649 F.3d 1189, 1194 (10th Cir. 2011); Carey v. City of Denver,
534 F. 3d 1269, 1273 (10th Cir. 2008).

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The Individual Defendants also frame the issue as whether Plaintiff’s allegations are
sufficient to overcome their qualified immunity from suit under federal law. “The doctrine of
qualified immunity protects government officials from liability for civil damages ‘unless a plaintiff
pleads facts showing (1) that the official violated a statutory or constitutional right, and (2) that
the right was “clearly established” at the time of the challenged conduct.’” Wood v. Moss, 134 S.
Ct. 2056, 2066-67 (2014) (quoting Ashcroft v. al-Kidd, 563 U.S. 731, 735 (2011)). There is no
question that Plaintiff’s right not be discharged from employment based on her race was clearly
established. See Ramirez v. Dep’t of Corr., 222 F.3d 1238, 1244 (10th Cir. 2000). The real
question is whether Plaintiff’s factual allegations show a violation of this right.
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The Tenth Circuit has stated regarding Title VII claims that “[w]hile the 12(b)(6)
standard does not require that Plaintiff establish a prima facie case in her complaint, the
elements of each alleged cause of action help to determine whether Plaintiff has set forth a
plausible claim.” Khalik v. United Air Lines, 671 F.3d 1188, 1192 (10th Cir. 2012). A
plaintiff establishes a prima facie case of race discrimination in a termination of
employment “by showing that: (1) she belongs to a protected class; (2) she was qualified
for her job; (3) despite her qualifications, she was discharged; and (4) the job was not
eliminated after her discharge.” Perry v. Woodward, 199 F.3d 1126, 1138 (10th Cir.
1999); see Kendrick v. Penske Transp. Servs., Inc., 220 F.3d 1220, 1229 (10th Cir. 2000).
However, “the fourth element of a prima facie case is a flexible one that can be satisfied
differently in varying scenarios.” Plotke v. White, 405 F.3d 1092, 1100 (10th Cir. 2005)
“‘The critical prima facie inquiry in all cases is whether the plaintiff has demonstrated that
the adverse employment action occurred under circumstances which give rise to an
inference of unlawful discrimination.’” Id. (quoting Kendrick, 220 F.3d at 1227) (internal
quotation omitted); see Swackhammer v. Sprint/United Mgmt. Co., 493 F.3d 1160, 1166
& n.8 (10th Cir. 2007).
Upon careful consideration of Plaintiff’s pleading, the Court finds that it contains
sufficient factual allegations, although barely, to state a plausible race discrimination claim
against all Defendants. The allegations of Plaintiff’s pleading, which are accepted as true,
state facts to show that each of the Individual Defendants participated in the decision to
terminate Plaintiff’s employment with the Department. Plaintiff also alleges facts from
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which to infer that the decision was motivated by racial animus toward Native Americans.
Plaintiff’s pleading “‘give[s] the defendant fair notice of what the . . . claim is and the
grounds upon which it rests’” as required by Rule 8(a). See Erickson v. Pardus, 551 U.S.
89, 93 (2007) (quoting Twombly, 550 U.S. at 555); see also Khalik, 671 F.3d at 1193.
Therefore, the Court finds that Plaintiff states a plausible claim that Defendants
discriminated against her based on her Native American race.
C.

Age Discrimination Claim
The Department also challenges the sufficiency of Plaintiff’s pleading to state a

plausible claim that the termination of her employment was based on her age of more than
40 years.

The Department argues that Plaintiff’s allegations show a number of its

employees were Plaintiff’s age or older and thus she fails to suggest a discriminatory
animus toward older workers existed.

This argument overlooks factual allegations

regarding Mr. Lesher’s age-related statements and hiring of younger workers and
allegations that Ms. Todd treated younger employees more favorably than older workers.
Again, the Court finds that Plaintiff’s factual allegations are minimally sufficient to state a
plausible age discrimination claim against the Department.
D.

Tortious Interference Claims
The Individual Defendants seeks the dismissal of Plaintiff’s claims for tortious

interference with her employment relationship with the Department and a prospective
economic advantage from such employment based on a common proposition: “[A]n agent
of a principal cannot be held liable for interfering with a contract between the principal and
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a third party.” Martin v. Johnson, 975 P.2d 889, 896 (Okla. 1998). See Defs.’ Mot.
Summ. J. [Doc. No. 6] at 11. The Individual Defendants also rely on cases holding that
supervisors cannot be held liable for disciplining or terminating an employee where “they
were ‘acting in a representative capacity for Plaintiff’s employer.’” See id. at 13 (quoting
Batton v. Mashburn, No. CIV-14-651-R, 2015 WL 2240981, *5 (W.D. Okla. May 12,
2015)).
Plaintiff does not disagree with these general propositions but, instead, argues that
an officer or manager of an employer can be held liable for tortiously interfering with an
employee’s relationship with the employer if he “acts in bad faith and contrary to the
interests of the employer.” See Pl.’s Resp. Br. [Doc. No. 17] at 13-14, 17 (citing Martin,
975 P.2d at 896). Plaintiff cites prior decisions of this Court holding that such a claim is
theoretically possible, although not stated in the pleadings under consideration in those
cases. See Janzen v. Watonga Hosp. Trust Auth., No. CIV-11-70-D, 2011 WL 5415329,
(W.D. Okla. Nov. 8, 2011); Wright v. KIPP Reach Acad. Charter Sch., No. CIV-10-989D, 2011 WL 1752248 (W.D. Okla. May 6, 2011). Plaintiff contends she has alleged
sufficient circumstances here because her pleading shows “the Individual Defendants acted
with ill-motive.” Id. at 14 (citing Pet. [Doc. No. 1-2], ¶¶ 12-20, 35).
Upon examination of Plaintiff’s pleading, the Court finds only conclusory
allegations of the elements of the asserted causes of action and allegations that the
Individual Defendants’ actions were “malicious” and without “justification, excuse or
privilege.” See Pet. [Doc. No. 1-2], ¶ 35. Here, as in prior cases cited by Plaintiff, the
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Court finds that Plaintiff has failed to present sufficient factual allegations to show that the
Individual Defendants were acting in bad faith and outside the scope of their employment
with the Department in deciding to terminate Plaintiff’s employment. Accordingly, the
Court finds that Plaintiff’s pleading fails to state a plausible claim of tortious interference
with contractual relations or prospective business advantage.

Plaintiff will have an

opportunity to amend her pleading to cure this deficiency within the time period to be set
by the Court’s scheduling order.
Conclusion
For these reasons, the Court finds that Plaintiff has sufficiently stated claims of race
and age discrimination but that her pleading fails to state plausible tort claims. Plaintiff’s
claims against Defendants Lesher, S’Renco and Todd of tortious interference with a
contractual or employment relationship and interference with prospective economic
advantage (Counts IV and V) are dismissed without prejudice to a future amendment.
IT IS THEREFORE ORDERED that Defendants’ Motions to Dismiss [Doc. Nos. 6
& 7] are GRANTED in part and DENIED in part, as set forth herein.
IT IS SO ORDERED this 19th day of May, 2017.

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