Chapman v. Yellow Cab Cooperative et al

Filing 42

ORDER signed by Judge Rudolph T. Randa on 2/24/2016. 35 Plaintiff's MOTION to Amend/Correct Claim DENIED. 16 30 Defendants' MOTIONS to Dismiss GRANTED to the extent that they are predicated on failure to state a claim as follows: Chap man's Title VII, § 1983, and § 1981 claims against Mohamed, Yellow Cab, and Giri DISMISSED without prejudice; any WFEA claim is DISMISSED with prejudice; motions DENIED in all other respects. Defendants Office of Secretary of State and State of Wisconsin Deptartment of Financial Institutions DISMISSED from this action. By 3/28/2016 Chapman may file amended complaint consistent with this Order, failure to file will result in dismissal of this action. By 4/28/2016 Chapman must effect proper service of amended complaint and summons on any defendant in this action. (cc: all counsel, via mail to Chapman-with copy of Court's civil complaint form)(cb)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
THOMAS EDWARD CHAPMAN,
Plaintiff,
-vs-

Case No. 15-C-533

YELLOW CAB COOPERATIVE,
WISCONSIN DEPARTMENT OF
FINANCIAL INSTITUTIONS,
OFFICE OF SECRETARY OF STATE,
ALI MOHAMAD,
and PARSHUA GIRI,1
Defendants.

DECISION AND ORDER
Pro se Plaintiff Thomas Edward Chapman filed a wage complaint
with the Wisconsin Department of Workforce Development Equal Rights
Division (ERD) alleging that he was not being paid minimum wage as a cab
driver.

Chapman claims that Defendants Yellow Cab Cooperative,2 Ali

Mohamad, and Parshua Giri retaliated against him for filing the ERD
Complaint by terminating his employment. He maintains that Defendant
Wisconsin Department of Financial Institutions (DFI) deprived him of his
civil rights. Chapman also states “state action: contract to franchise with

The Plaintiff listed this Defendant as “Giri Parshua.” The Defendants maintain
that his name is Parshua Giri. (See Giri Br. Mot. Dismiss 2, ECF No. 31.) The Court
has corrected the caption.
1

2

Yellow Cab filed a notice of special appearance.

Yellow Cab charter.” (Compl. 6, ECF No. 1.) Chapman seeks damages,
injunctive and declaratory relief under 42 U.S.C. § 1983, and damages
under Title VII, as amended.
The Defendants filed motions (ECF Nos. 16, 30) pursuant to Fed. R.
Civ. P. 12(b) asserting this action should be dismissed on the following
grounds: (1) failure to effect proper service; (2) failure to state a cause of
action; (3) the Title VII claim is untimely and Chapman has failed to
exhaust administrative remedies; (4) lack of subject matter jurisdiction
over any Wisconsin Fair Employment Act (WFEA) claims; and (5) the
action is barred by res judicata.
Chapman opposes dismissal in multiple filings and has filed a
motion to amend/correct claim seeking to add a claim pursuant to 42
U.S.C. § 1981.

(ECF No. 35.)

This Decision and Order addresses the

pending motions.
Failure to State a Cause of Action
The Defendants assert that Chapman has failed to state a cause of
action for retaliation under Title VII, because filing a wage claim is not
activity protected by Title VII. Further, they assert that § 1983 claims are
only appropriate against state actors who are acting under color of law, and
Chapman has not alleged that Yellow Cab, Mohamed, and Giri were acting
-2-

under the color of law. They also oppose Chapman’s proposed amendment
of the complaint to add a § 1981 claim, contending it fails to state a cause
of action.
The Defendants proffer six exhibits in support of their motions. In
general, when extraneous materials are presented in support of a motion
to dismiss, the Court has discretion either to exclude the materials and
handle the case as a straightforward motion to dismiss, or to consider the
materials and convert the motion to one for summary judgment. See Fed.
R. Civ. P. 12(d); See Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir.
1998). There are, however, limited exceptions.
One of those exceptions, afforded by Rule 10(c), arises because “[a]
copy of a written instrument that is an exhibit to a pleading is a part of
the pleading for all purposes.” See Cole v. Milwaukee Area Technical Coll.
Dist., 634 F.3d 901, 903 (7th Cir. 2011)

Exhibits one and three,

Chapman’s Labor Standards Complaint and his ERD Complaint (ECF
Nos. 17-1, 17-3, 31-1, 31-3), are also exhibits to Chapman’s Complaint.
Therefore, they may be considered without converting the motion to a
motion for summary judgment.
Exhibits two, five, and six (an administrative decision dismissing
Chapman’s

wage

and

hour

complaint,
-3-

an

order

dismissing

the

administrative retaliation action against Yellow Cab, and a letter relating
to the retaliation case from Yellow Cab’s attorney to Chapman (ECF Nos.
17-2, 17-5, 17-6, 31-2, 31-5, 31-6), are matters within the public record
and, for that reason, may be considered by the Court without converting
the motions to motions for summary judgment. See Fed. R. Civ. P. 12(d);
Cont'l Cas. Co. v. Am. Nat'l Ins. Co., 417 F.3d 727, 731 n.3 (7th Cir. 2005).
However, there is no indication that exhibit four, a settlement
agreement between Chapman and Yellow Cab regarding the retaliation
complaint, is part of the administrative record or falls into some other
exception. (ECF Nos. 17-4, 31-4.) Therefore, that document is excluded
from consideration.
“[T]he pleading standards for pro se plaintiffs are considerably
relaxed, Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam), even in
the wake of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and
Ashcroft v. Iqbal, 556 U.S. 662, (2009).” Luevano v. Wal-Mart Stores, Inc.,
722 F.3d 1014, 1027 (7th Cir. 2013) (parallel citations omitted). To state a
claim, a complaint need only contain a short and plain statement showing
that the plaintiff is entitled to relief. EEOC v. Concentra Health Servs.,
Inc., 496 F.3d 773, 776 (7th Cir. 2007). All well-pleaded allegations are
presumed to be true, and all inferences are read in the light most
-4-

favorable to the plaintiff. Lavalais v. Vill. of Melrose Park, 734 F.3d 629,
632 (7th Cir. 2013).

A complaint survives a Rule 12(b)(6) motion if it

contains sufficient factual allegations to “state a claim to relief that is
plausible on its face.” Twombly, 550 U.S. at 570. “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.” Adams v. City of Indianapolis, 742 F.3d 720, 728
(7th Cir. 2014) (quoting Iqbal, 556 U.S. at 678).
Factual Background3
Chapman drove a licensed cab owned by Dennis Edwards. He paid
rent on the cab to Giri, who leased it from Edwards. On January 30, 2013,
Chapman filed a wage complaint with the ERD against Yellow Cab, a
cooperative organization of taxicab drivers.

In February, the ERD

informed Yellow Cab of the administrative complaint. On March 4, 2013,
Giri informed Chapman that Mohamed, Yellow Cab’s president, had
terminated Chapman’s employment because he was suing Yellow Cab.
Analysis
A Title VII retaliation claim arises under 42 U.S.C. § 2000e-3 which

3 The factual background is based on the factual allegations of the Complaint and
the attachments thereto.

-5-

provides:
It shall be an unlawful employment practice for an employer
to discriminate against any of his employees . . . because he
has opposed any practice made an unlawful employment
practice by this subchapter, or because he has made a charge,
testified, assisted, or participated in any manner in an
investigation, proceeding, or hearing under this subchapter.4
(Emphasis added.)

42 USC § 1981 prohibits racial discrimination and

retaliation against employees when a contractual relationship exists
between the employer and employee. The “Civil Rights Act of 1866 . . .
protects the right of all persons ‘to make and enforce contracts regardless
of race.’ 42 U.S.C. § 1981.” Smith v. Bray, 681 F.3d 888, 895 (7th Cir. 2012)
In 1991, Congress expanded the reach of the statute, which has now been
confirmed to authorize claims for retaliation “if one person takes action
against another for asserting the right to substantial contractual equality
provided by § 1981.” Id. at 896 (citing CBOCS West, Inc. v. Humphries,
553 U.S. 442, 445 (2008)). Though § 1981 and Title VII “differ in the types
of discrimination they proscribe, ‘the methods of proof and elements of the
case are essentially identical.’” Davis v. Time Warner Cable of Se. Wi.,
L.P., 651 F.3d 664, 671-72 (7th Cir. 2011). (Citations omitted).
“To plead a Title VII retaliation claim, a plaintiff must (though [he]
4 The first type of activity is known as the “opposition” clause, and the second is
known as the “participation” clause. See Mattson v. Caterpillar, Inc., 359 F.3d 885, 889
(7th Cir. 2004).

-6-

need not use the specific terms) allege that [he] engaged in statutorily
protected activity and was subjected to adverse employment action as a
result of that activity.”5 Huri v. Office of the Chief Judge of the Circuit
Court of Cook Cty., 804 F.3d 826, 833 (7th Cir. 2015).
The phrase “this subchapter,” see 42 U.S.C. § 2000e-3, refers to 42
U.S.C. §§2000e through 2000e-17, the provisions that set forth an
employee’s rights when an employer has discriminated against him on the
basis of race, color, sex, religion, or national origin. It follows that a charge
“under this subchapter” is a charge that alleges discrimination on the basis
of those prohibited grounds. See Tomanovich v. City of Indianapolis, 457
F.3d 656, 663-64 (7th Cir. 2006) (holding that two internal grievances were
not protected activities for purposes of a Title VII anti-retaliation provision
because in complaining about pay discrimination the plaintiff did not claim
that the discrimination resulted from his national origin or his
membership in another protected class); also citing Gleason v. Mesirow
Fin., Inc., 118 F.3d 1134, 1147 (7th Cir. 1997) (although filing an official
complaint with an employer may constitute statutorily protected activity

In the retaliation context, “adverse employment action” simply means an
employer's action that would dissuade a reasonable worker from participating in
protected activity. Chaib v. Indiana, 744 F.3d 974, 986-87 (7th Cir. 2014). The
termination of employment is an adverse employment action. See Tyler v. Ispat Inland
Inc., 245 F.3d 969, 972 (7th Cir. 2001).
5

-7-

under Title VII, the complaint must indicate the discrimination occurred
because of sex, race, national origin, or some other protected class; holding
that the plaintiff's general complaint about management style without
raising the subject of sexual harassment fails to constitute protected
activity); Sitar v. Ind. Dep’t of Transp., 344 F.3d 720, 727 (7th Cir.2003)
(affirming the district court's grant of summary judgment to the employer
on the plaintiff's retaliation claim because the plaintiff's complaint to his
employer “did not invoke any action protected by Title VII”); Miller v. Am.
Fam. Mut. Ins. Co., 203 F.3d 997, 1008 (7th Cir. 2000) (holding that the
plaintiff did not engage in a protected activity where “[h]er complaints . . .
concerned a general displeasure with being paid less than her co-workers
given her longer tenure and the fact that she had trained some of them”
and not discrimination related to a protected class).
Chapman’s Complaint does not include any allegation indicating
that race, color, sex, religion, or national origin played a role in his ERD
wage complaint. Therefore, Chapman has failed to state a claim under
§ 1981, and his request to file his proposed amended Complaint is denied
on the grounds of futility.6 Furthermore, because there is no indication

6 A motion for leave to amend a complaint is evaluated under Fed R. Civ. P.
15(a)(2), which provides that courts should “freely give leave when justice so requires.”
See Alioto v. Town of Lisbon, 651 F.3d 715, 719 (7th Cir. 2011). Nonetheless, where an

-8-

that race, color, sex, religion, or national origin played a role in his wage
complaint, his Title VII claim is subject to dismissal for failure to state a
claim.7
Section 1983 provides in pertinent part:
Every person who, under color of any statute, ordinance,
regulation, custom, or usage, of any State or Territory or the
District of Columbia, subjects, or causes to be subjected, any
citizen of the United States or other person within the
jurisdiction thereof to the deprivation of any rights, privileges,
or immunities secured by the Constitution and laws, shall be
liable to the party injured in an action at law, suit in equity, or
other proper proceeding for redress.
42 U.S.C. § 1983.
To survive a motion to dismiss a § 1983 claim, a plaintiff must allege
facts which show that the defendant deprived him of a right secured by the
Constitution or any law of the United States, and that the deprivation of
that right resulted from the defendant acting under color of law. Lekas v.
Briley, 405 F.3d 602, 606 (7th Cir. 2005).

The traditional definition of

acting under color of state law requires that the defendant in a § 1983
action have exercised power “possessed by virtue of state law and made
possible only because the wrongdoer is clothed with the authority of state
amendment would be futile, the general rule does not apply. See Foman v. Davis, 371
U.S. 178, 182 (1962); Stanard v. Nygren, 658 F.3d 792, 797 (7th Cir. 2011).
7 Because Chapman fails to state a Title VII retaliation claim, the Court need not
address the Defendants’ additional arguments for dismissal regarding timeliness and
exhaustion of administrative remedies.

-9-

law.”

West v. Atkins, 487 U.S. 42, 49 (1988). (Citation omitted).

“To

constitute state action, ‘the deprivation must be caused by the exercise of
some right or privilege created by the State . . . or by a person for whom the
State is responsible,’ and ‘the party charged with the deprivation must be a
person who may fairly be said to be a state actor.’ . . . ‘[S]tate employment
is generally sufficient to render the defendant a state actor.’” Id. (Citations
omitted.)
The Complaint alleges that Giri drives a cab owned by Edwards.
There is no allegation, or reasonable inference to be drawn from the
Complaint, that Giri is employed by the government; thus he is not a state
actor. Mohamed, the president of Yellow Cab, is a private individual, and
there is no indication that he is employed by the state. Yellow Cab is a
cooperative. None of these entities is a state actor. See Babchuk v. Ind.
Univ. Health, Inc., No. 15-1816, 2016 WL 106237, at *4 (7th Cir. Jan. 11,
2016) (holding that Indiana University Health, Inc., at least a formally
private corporation is not a state actor.); Blum v. Yaretsky, 457 U.S. 991,
1004 (1982).
The Defendants argue that the WFEA does not create a private
cause of action. This Court held that that a person can bring a private

- 10 -

cause of action under the WFEA only under limited factual circumstances.8
See Martin v. Nw. Mut. Life Ins. Co., No. 05-C-0209, 2006 WL 897751, at *4
(E.D. Wis. Mar. 31, 2006). Those circumstances are not applicable here.
After Martin’s issuance, there was a brief interval when 2009
Wisconsin Act 20 amended the WFEA to allow a person prevailing on an
administrative WFEA claim to bring a private cause of action for
compensatory and punitive damages. See Jones v. Int’l Ass’n of Bridge
Structural Ornamental and Reinforcing Iron Workers, 864 F. Supp. 2d 760,
767 (E.D. Wis. 2012). However, 2011 Wisconsin Act 219 repealed the 2009
amendments. Velyov v. Frontier Airlines, Inc., No. 14-C-0071, 2014 WL
5312656, at *2 (E.D. Wis. Oct. 16, 2014). Thus, Chapman may not bring a
claim under the WFEA and any such claim is dismissed with prejudice.
With respect to the DFI and the Office of the Secretary of State, two
state agencies named as Defendants in this action, Rowe v. Shake, 196
F.3d 778, 783 (7th Cir. 1999), holds that district courts have the power to
screen complaints filed by all litigants, prisoners and non-prisoners alike,
regardless of fee status.

An action or claim is frivolous if “it lacks an

This Court explained that a plaintiff can bring a private cause of action under
the WFEA only when “(1) the legislature provides a new remedy . . . (2) for a proven
statutory violation which previously was not available in the administrative process,
and (3) which new remedy was not available to the plaintiff in the [Wisconsin
Department of Industry and Human Relations] action simply because the amendment
came too late.” Martin, 2006 WL 897751, at *4.
8

- 11 -

arguable basis either in law or in fact.” Neitzke v. Williams, 490 U.S. 319,
325 (1989).

Although the Office of Secretary of State is named in the

caption of the Complaint, no allegations are included against it. Thus, the
inclusion of the Office of the Secretary of State as a defendant is frivolous,
see id., and the Office of Secretary of State is dismissed from this action.
Chapman alleges that the DFI abused its discretion by failing to
involuntarily dissolve Yellow Cab pursuant to Wis. Stat. § 185.72 because
it was in bad standing four times between 1982 and 2000. Chapman has
not alleged any action or inaction by the DFI that arguably violates his
constitutional rights. In addition, the facts alleged by Chapman do not
state an arguable Title VII or § 1981 claims against the DFI. Therefore,
Chapman’s claims against the DFI are dismissed.
Res Judicata
The Defendants assert that this action is barred by res judicata, also
referred to claim preclusion. However, they only cite cases applying the
federal common law of claim preclusion.

See e.g. Quincy Mall, Inc. v.

Parisian, Inc., 27 F. App’x 631, 636 (7th Cir. 2001) (applying federal claim
preclusion law to hold that a state law breach of contract claim (removed to
federal court) was barred by the prior proof of claim filed in bankruptcy
court); Edmonds v. Operating Engineers Local 139, 620 F. Supp. 2d 966,
- 12 -

972 (W.D. Wis. 2009) (applying federal claim preclusion law to determine
that a federal lawsuit was barred by the resolution of the plaintiff’s prior
federal lawsuit.)
Unlike the cited cases, this case is governed by Wisconsin claim
preclusion law, see Staats v. County of Sawyer, 220 F.3d 511, 514 (7th Cir.
2000); Brye v. Brakebush, 32 F.3d 1179, 1181-1183 (7th Cir. 1994), and
involves the application of Wisconsin claim preclusion law regarding an
unreviewed administrative tribunal’s dismissal of an action with prejudice
and the effect, if any, on a subsequent federal action. The Defendants raise
claim preclusion as a defense; however, they have not met their burden of
demonstrating that Chapman’s claims against any of the Defendants are
barred under Wisconsin’s law of claim preclusion.
Opportunity to File Proposed Amended Complaint
Although Chapman’s Complaint is dismissed for failure to state a
cause of action, courts must give litigants the opportunity to amend the
complaint. See Luevano, 722 F.3d at 1022-25. The Court has discussed the
deficiencies in Chapman’s claims and, with the exception of the WFEA
claim, indicated what Chapman must do in order to properly allege claims
in an amended complaint. See Tate v. SCR Med. Transp., 809 F.3d 343,
346 (7th Cir. 2015).
- 13 -

In addition, the facts of alleged retaliation may be more properly
brought under the Fair Labor Standards Act (FSLA), 29 U.S.C. § 215(a)(3).
See Sapperstein v. Hager, 188 F.3d 852, 857 (7th Cir. 1999) (holding that
“filing a claim with a state Department of Labor qualifies as protected
activity under this section of the FLSA”). The facts alleged may also give
rise to a breach of contract claim under Wisconsin state law based on the
alleged settlement agreement.
In addition, having considered Chapman’s allegations regarding the
DFI and his naming of the Secretary of State as defendant, Chapman is
advised that a plaintiff may join defendants in a suit presenting any
question of law or fact common to all defendants if “any right to relief is
asserted against them jointly, severally, or in the alternative with respect
to or arising out of the same transaction, occurrence, or series of
transactions or occurrences.” Fed. R. Civ. P. 20(a)(2). A court may, on
motion or on its own, add or drop a party or sever any claim against any
party at any time. Fed. R. Civ. P. 21. Chapman should consider whether
any claims against the Secretary of State and/or the DFI satisfy the
criteria of Rule 20(a)(2).
By the stated deadline, Chapman may file an amended Complaint
consistent with this Decision and Order. Chapman is advised that any
- 14 -

amended Complaint must set forth all the factual allegations on which he
intends to proceed.

He is reminded that the Amended Complaint will

supersede all prior Complaints in this action and must be a complete
document. A copy of the Court’s Civil Complaint form will be included with
Chapman’s copy of this Decision and Order. Failure to file an amended
Complaint by the stated deadline will result in dismissal of this action
without further order of the Court.
Service
Defendants Yellow Cab, Mohamed, and Giri also maintain that the
Summons served on Mohamed is defective because it does not provide
Chapman’s address, as required by Fed. R. Civ. P. 4(a)(1)(C); Chapman did
not serve a copy of the Complaint with the Summonses filed upon
Mohamad and Giri, as required by Fed. R. Civ. P. 4(c); and no Summons
and Complaint was served on Yellow Cab, as required by Fed. R. Civ. P.
4(h).

They also state that Chapman should not be allowed to perfect

service because his Complaint fails to state a cause of action.
The documents on file establish that Mohamed, President of Yellow
Cab’s board of directors, was served with a Summons and other
miscellaneous papers on June 5, 2015 (ECF No. 13), and Giri was served
with a Summons and other miscellaneous papers on August 8, 2015 (ECF
- 15 -

No. 28). Fed. R. Civ. P. 4(c)(1) requires that both a Summons and a copy of
the Complaint must be served. Mohamed and Giri were not served with
the Complaint. Thus, they were not properly served.
Rule 4(h) provides that an association may be served in several
ways, one of which is personal service on an officer.

Mohamed is an

appropriate person to accept service on behalf of Yellow Cab, but the
Summons was not addressed to Yellow Cab, it was only served on
Mohamed, personally. Yellow Cab has not been served in this action.
As of the date Chapman filed the Complaint he had 120 days, that is
until September 2, 2015, to serve each Defendant with a copy of the
Summons and Complaint.9 Chapman was also to comply with Fed. R. Civ.
P. 4(a)(1)(C), which requires that each Summons served provides his
address. Mohamed and Giri have established that service upon them is
defective. Yellow Cab has established that it was not served. A deadline
for Chapman to perfect service of the Summons and Amended Complaint
upon Mohamed, Giri, and Yellow Cab is set forth below. That deadline will
also apply to the Secretary of State and the DFI, if named in the Amended
Complaint, since there is no indication that either has been served.

9 As of December 1, 2015, a defendant within this country must be served within
90 days. However, upon a plaintiff’s showing of good cause for the failure, the court
must extend the time. See Fed. R. Civ. P. 4(m) (2015).

- 16 -

Other Matters
Chapman may find helpful materials on the Eastern District of
Wisconsin’s web site, www.wied.uscourts.gov, under the “Representing
Yourself” tab. If Chapman does not have access to a computer, he is
advised to contact the Clerk of Court’s Office to request information for pro
se civil litigants.
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS
HEREBY ORDERED THAT:
Chapman’s motion for leave to file an amended Complaint (ECF No.
35) is DENIED;
The Defendants’ motions to dismiss (ECF Nos. 16, 30) are
GRANTED to the extent that they are predicated on the failure to state a
claim as follows: Chapman’s Title VII, § 1983, and § 1981 claims against
Mohamed, Yellow Cab, and Giri are dismissed without prejudice; any
WFEA claim is dismissed with prejudice, and the motions are DENIED in
all other respects;
The Wisconsin Secretary of State and the DFI are DISMISSED
from this action;
No later than March 28, 2016, Chapman may file an Amended
Complaint consistent with this Decision and Order;
- 17 -

The Clerk of Court is directed to include a copy of the Court’s Civil
Complaint form with Chapman’s copy of this Decision and Order; and
Failure to file an amended Complaint by March 28, 2016, will
result in dismissal of this action without further order of the Court; and
No later than April 28, 2016, Chapman must effect proper service
of the Amended Complaint and Summons on any Defendant in this action.
Dated at Milwaukee, Wisconsin, this 24th day of February, 2016.

__________________________
HON. RUDOLPH T. RANDA
U.S. District Judge

- 18 -