Opinion
Cause No. IP 01-0129-C H/K
October 31, 2001
ENTRY ON DEFENDANT NABISCO'S MOTION TO DISMISS AND FOR RULE 11 SANCTIONS
Plaintiff Marilyn Ratliff has sued Conagra, Inc., d/b/a Beatrice Foods, Inc. ("Beatrice") and Nabisco Biscuit, Inc. for allegedly violating the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq., and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.
Defendant Nabisco has moved on two grounds to dismiss the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. First, Nabisco claims that Ratliff failed to exhaust her administrative remedies under the ADEA and Title VII since it was not named in her charge of discrimination filed with the Equal Employment Opportunity Commission ("EEOC"). Second, Nabisco asserts that Ratliff failed to allege any actionable wrong by Nabisco because, during the time period giving rise to her claims, Ratliff had no employment relationship with Nabisco. Nabisco has also filed a motion pursuant to Federal Rule of Civil Procedure 11 seeking sanctions for plaintiff's pursuit of claims against it. Nabisco complied with the "warning shot" procedure set forth in Rule 11(c)(1)(A), but Ratliff did not withdraw her claims against Nabisco.
For reasons set forth below, Nabisco's motion to dismiss is granted. Its Rule 11 motion is also granted, but without monetary sanctions. The court instead orders plaintiff's attorney Kimberly J. Bacon to attend an appropriate continuing legal education program on employment discrimination law.
Factual Background
The following facts are taken from Ratliff's complaint and for the purposes of the motion to dismiss are assumed to be true. On January 4, 1993, Ratliff was hired by Nabisco. In May 1997, Ratliff filed a charge of discrimination with the EEOC alleging discrimination by Nabisco under Title VII and the ADEA. On December 19, 1997, Nabisco terminated Ratliff's employment. Upon her discharge, Ratliff filed a second charge of discrimination alleging retaliation. Cplt. ¶¶ 7-10.
In August 1998, Beatrice purchased Ratliff's employer (presumably, Nabisco, or at least the relevant operations). Id., ¶ 11. On or about December 7, 1999, subsequent to arbitration proceedings, Ratliff was reinstated to her employment with "full benefits." Id., ¶ 12.
Ratliff was reinstated as an employee of Beatrice, not Nabisco, and since her reinstatement, Ratliff has been continuously employed by Beatrice. See id., ¶ 13. While employed by Beatrice, Ratliff alleges, she has been subjected to retaliatory acts "by management previously employed by Nabisco and became [sic] employees of Beatrice." Id., ¶ 14 (emphasis in original). For instance, Ratliff states that she "requested defendant's [sic] reimburse back pay and benefits awarded by arbitrator" and "requested arbitrator's clarification of award." Id., ¶ 15. Further, Ratliff alleges that "defendant" (without stating which defendant) refused to retrain her upon her return to work, did not permit her to work overtime or a preferred shift according to her seniority, gave her assignments to younger workers, refused to provide her with a telephone number of the arbitrator, "threatened and jeopardized [her] with discriminatory discipline," suspended her from work, and denied her unemployment benefits during plant shutdowns. Id., ¶¶ 16-17, 23.
Although the point is unclear because of her interchangeable use of the term "defendant," Ratliff also appears to claim that Nabisco refuses to honor the terms of her return to work awarded by the arbitrator. For instance, Ratliff states "Plaintiff requested defendant's reimburse back pay and benefits awarded by arbitrator. Plaintiff also requested arbitrator's clarification of award." Compl. ¶ 15. Presumably referring to the arbitration award, Ratliff states: "Defendant's refused to revisit its calculation after plaintiff's counsel submitted plaintiff's position." Id., ¶ 21. Further, Ratliff refers to "defendant's refusal to pay plaintiff," apparently referring also to the arbitration award. Id., ¶ 22.
On or about January 11, 2000, Ratliff filed her third charge of discrimination with the EEOC. She later received a right-to-sue letter and filed this action.
Discussion
I. Standard for Motion to Dismiss under Rule 12(b)(6)
In ruling on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court must assume as true all well-pleaded facts set forth in the complaint, construing the allegations liberally and drawing all inferences in the light most favorable to the plaintiff. See, e.g., Jackson v. E.J. Brach Corp., 176 F.3d 971, 977-78 (7th Cir. 1999); Zemke v. City of Chicago, 100 F.3d 511, 513 (7th Cir. 1996); McMath v. City of Gary, 976 F.2d 1026, 1031 (7th Cir. 1992).
For purposes of the motion, the court determines whether the plaintiff can prove any set of facts consistent with the allegations that would give the plaintiff a right to relief. Wudtke v. Davel, 128 F.3d 1057, 1061 (7th Cir. 1997), citing Leatherman v. Tarrant County Narcotics Intelligence Coordination Unit, 507 U.S. 163, 168 (1993). Dismissal is appropriate only if it appears beyond a doubt that the plaintiff can prove no facts in support of her claim for relief. Kennedy v. National Juvenile Detention Ass'n, 187 F.3d 690, 694 (7th Cir. 1999).
A motion to dismiss under Rule 12(b)(6) must ordinarily be decided based on the face of the complaint. Ratliff's complaint refers to three charges of discrimination and right-to-sue letters, but none were attached to the complaint. (The complaint alleges that Ratliff's third EEOC charge is attached as Exhibit A. As might be expected from the numerous errors in the complaint, no Exhibit A is attached to the complaint.) In support of its motion to dismiss, Nabisco has submitted copies of the three charges of discrimination and the respective right-to-sue letters.
Consideration of these documents does not require that Nabisco's Rule 12(b)(6) motion be converted to a Rule 56 motion for summary judgment. Under Federal Rule of Civil Procedure 10(c), a document attached to a pleading as an exhibit is deemed part of the pleading. Fed.R.Civ.P. 10(c). There is no reason why the same may not be said of a document the complaint says is attached, even if it is not actually attached. The Seventh Circuit has repeatedly approved consideration under Rule 12(b)(6) of documents mentioned in the complaint, at least if they are central to the plaintiff's claims. See, e.g., Wright v. Associated Ins. Cos., 29 F.3d 1244, 1248 (7th Cir. 1994) (affirming dismissal based on document referred to in complaint and central to claim); Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993) (same). Cf. Jacobs v. City of Chicago, 215 F.3d 758, 766 (7th Cir. 2000) (district court erred by considering photographs and police report submitted by parties in deciding Rule 12(b)(6) motion, but error was harmless).
This practice has been used for EEOC charges and right-to-sue letters. See, e.g., Gallo v. Bd. of Regents of the Univ. of Cal., 916 F. Supp. 1005, 1007 (S.D.Cal. 1995) (in determining whether the plaintiff filed a timely charge of discrimination with the EEOC, district court stated that it could consider both the EEOC right-to-sue letter and the EEOC charge either as referenced in the complaint or as a public record subject to judicial notice); Maldonado-Cordero v. ATT, 73 F. Supp.2d 177, 185 (D.P.R. 1999) (same); Stokes v. Norfolk S. Ry. Co., 99 F. Supp.2d 966, 972-74 (N.D.Ind. 2000) (considering EEOC charge on Rule 12(b)(6) motion to dismiss because claim in lawsuit went beyond scope of EEOC charge). The EEOC charges and right-to-sue letters are central to Ratliff's claims and are mentioned in her complaint. The court may consider these documents.
II. Failure to Exhaust Administrative Remedies
Under Title VII, 42 U.S.C. § 2000e-5(f)(1), and the ADEA, 29 U.S.C. § 626(d), a plaintiff may bring a claim against a respondent named in the EEOC charge. Perkins v. Silverstein, 939 F.2d 463, 471 (7th Cir. 1991) (Title VII); Overgard v. Cambridge Book Co., 858 F.2d 371, 374 (7th Cir. 1988) (ADEA); see generally Alexander v. Gardner-Denver Co., 415 U.S. 36, 47 (1974). Conversely, no claim can be brought against a party not named as a respondent in an EEOC charge. The filing requirement is not jurisdictional; it is a defense that operates like a statute of limitations in that it is subject to waiver, estoppel, and equitable tolling. Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 393 (1982); Gibson v. West, 201 F.3d 990, 993-94 (7th Cir. 2000) (overruling prior circuit decision treating requirement as jurisdictional).
Ratliff's lawsuit is based upon her third EEOC charge, which does not name Nabisco as a respondent employer. See Nabisco Second Reply Br., Ex. A. Ratliff argues that she complied with the charge requirement by filing a charge, but she has completely failed to address the issue raised by Nabisco — she did not name Nabisco as a respondent employer in the charge at issue here. The charge referenced in the complaint (though erroneously not attached to it) shows that Nabisco is entitled to dismissal because Ratliff failed to name it in the third EEOC charge.
The Seventh Circuit recognizes a narrow exception to the general rule if the unnamed party had adequate notice of the charge and an opportunity to participate in the conciliation proceedings, and if strict application of the filing requirement would deprive a plaintiff of redress for a legitimate grievance. Eggleston v. Chicago Journeymen Plumbers' Local Union NO. 130, 657 F.2d 890, 907 (7th Cir. 1981); see also Schnellbaecher v. Baskin Clothing Co., 887 F.2d 124, 126-27 (7th Cir. 1989). Ratliff does not argue that she can meet this exception. There is no indication that Nabisco had any chance to participate in the conciliation proceedings on the third EEOC charge.
III. Post-Employment Retaliation
Nabisco is entitled to dismissal on a second, independent basis. From the face of her complaint, it appears that Ratliff alleges she is a victim of post-employment retaliation. An employer's acts of retaliation occurring after termination that undermine a former employee's future employment prospects are actionable under Title VII. 42 U.S.C. § 2000e-3; Robinson v. Shell Oil Co., 519 U.S. 337, 345-46 (1997). To establish liability, a post-employment retaliation plaintiff must demonstrate "an employment impairment that evidences actionable retaliation." Moreno-Nicholas v. City of Indianapolis, No. IP 98-1398-C H/G, 2000 WL 1707970, at *4 (S.D.Ind. Oct. 26, 2000), citing Veprinsky v. Fluor Daniel, Inc., 87 F.3d 881, 891 (7th Cir. 1996); see also Nelson v. Upsala College, 51 F.3d 383, 387 (3d Cir. 1995).
Ratliff's complaint refers to two earlier charges of discrimination filed against Nabisco. The first charge was filed in May 1997. The second charge was filed after Ratliff's December 1997 termination. In its memorandum in support of its motion to dismiss, Nabisco submitted as Exhibit A the two referenced charges. The charge filed in May 1997 (EEOC Charge No. 24091697) was the subject of a right-to-sue letter on February 12, 1998. Similarly, the charge filed in December 1997 (EEOC Charge No. 240980744) was the subject of a right-to-sue letter on February 22, 1998. After review of the Southern District of Indiana's court docket, it is clear Ratliff never filed a complaint within the statutory 90-day period to assert any claims under these two charges. As a result, the two prior charges are not a part of this action and presumably were resolved in arbitration, resulting in Ratliff's return to work with Beatrice before the present action was filed.
Even if Ratliff had exhausted her administrative remedies against Nabisco, she still would not avoid dismissal because she has not alleged any wrongdoing by Nabisco itself. By her own allegation, Ratliff has not been employed by Nabisco since December 19, 1997, the date of her termination. Cplt. ¶ 9. Further, she alleges that co-defendant Beatrice "purchased [Nabisco] in August 1998." Id., ¶ 11. Thus, when the arbitrator restored her employment on December 7, 1999, she became an employee of Beatrice. Id., ¶ 12. Ratliff's complaint shows that she had no employment relationship with Nabisco after December 19, 1997.
Ratliff claims that upon her return to work at Beatrice, she was subjected to retaliatory acts by management-level personnel previously employed by Nabisco. Cplt. ¶ 14. Assuming for the purposes of the motion to dismiss that Ratliff was subjected to acts of retaliation by former employees of Nabisco, her claims against Nabisco still fail. In Moreno-Nicholas, the plaintiff claimed she was subjected to post-employment retaliation when a former employee of the defendant refused to give a reference for the plaintiff to a prospective employer. Although the court held that the plaintiff asserted acts constituting retaliation, the court rejected her claim based on the defendant's former employee's actions because he was not an employee or agent of the defendant at the time of the solicitation. Moreno-Nicholas, 2000 WL 1707970, at *4. As a result, the court found that the defendant was "not legally responsible for anything [the former employee] did or did not do" in responding to the prospective employer's inquiries. Id. The same reasoning applies here. Ratliff alleges that the individuals who took action against her are employed by Beatrice, not Nabisco. Ratliff has not alleged any basis for holding Nabisco responsible for their recent conduct.
In her opposition brief filed on August 31, 2001, Ratliff invokes in conclusory terms the doctrine of successor liability. Under the federal successor liability doctrine applicable to Title VII and ADEA claims, a plaintiff may sue a purchaser of the assets of the violator-business if: (1) the successor had notice of the plaintiff's claim before acquisition; and (2) there was a substantial continuity in the operation of the business before and after the sale. EEOC v. G-K-G, Inc., 39 F.3d 740, 748 (7th Cir. 1994). The doctrine is derived from equitable principles, and fairness is the prime consideration in its application. See Criswell v. Delta Air Lines, Inc., 868 F.2d 1093, 1094 (9th Cir. 1989). The policy underlying the doctrine is "to protect an employee when the ownership of his employer suddenly changes." Rojas v. T.K. Communications, Inc., 87 F.3d 745, 750 (5th Cir. 1996).
The doctrine does not apply here. Ratliff is trying to impose what amounts to "predecessor liability," for which there is no basis in the law. She is attempting to hold Nabisco responsible for actions allegedly taken later by its former employees on behalf of Beatrice. (Also, there is no claim here of any sudden change of ownership causing prejudice to Ratliff. In fact, she did not file her EEOC charge until January 11, 2000, three years after her employment with Nabisco.) Ratliff cannot save her claims against Nabisco by invoking successor liability.
IV. Motion for Sanctions
Nabisco seeks sanctions pursuant to Federal Rule of Civil Procedure 11 against Ratliff and her counsel for bringing a frivolous claim against Nabisco. Rule 11(b) provides two distinct grounds for sanctions: the "frivolousness clause" and the "improper clause." Fred A. Smith Lumber Co. v. Edidin, 845 F.2d 750, 752 (7th Cir. 1988). The "frivolousness clause" requires that the party or the attorney conduct a reasonable inquiry into the facts and the law relevant to the case, while the improper purpose clause ensures that a "motion, pleading, or other document may not be interposed for purposes of delay, harassment, or increasing the costs of litigation." Id.
Nabisco invokes the "frivolousness clause," stating that Ratliff's continued pursuit of her claims against Nabisco has been frivolous in light of her failure to have exhausted administrative remedies and her failure to allege any wrongdoing by Nabisco itself (as distinct from its former employees). The weakness of plaintiff's response to the motion to dismiss underscores Nabisco's Rule 11 arguments. The only additional specific rebuttal to the Rule 11 motion is an affidavit from Ratliff's attorney, Kimberly Bacon. Attorney Bacon asserts that she attended a mediation with the EEOC in March 2000, that an attorney for Beatrice Foods told her that Nabisco was the proper respondent, and that the EEOC mediator told her that Nabisco was included in the pending charge. On this record, the court must accept that testimony.
The court assumes for purposes of argument that attorney Bacon could reasonably have relied upon those unexplained assertions when she initially filed the complaint. There might have been some uncertainty about Nabisco's precise status after it sold to Beatrice, and perhaps the EEOC official offered erroneous advice. But attorney Bacon could not have reasonably relied on those assertions in refusing to dismiss Ratliff's claim against Nabisco after she received from Nabisco's counsel the Rule 11 warning shot setting forth the controlling law.
Rule 11 does not punish competent and good faith attempts to extend the law. An attorney's signature on a filing certifies that, to the best of her knowledge, information, and belief, "formed after an inquiry reasonable under the circumstances — . . . (2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law." Fed.R.Civ.P. 11(b)(2). In response to the motion to dismiss, however, attorney Bacon has not presented even a colorable argument to excuse the failure to name Nabisco in the EEOC charge in this lawsuit.
On this record, therefore, the continued pursuit of Nabisco, after Nabisco delivered the warning shot, and without any meaningful response to Nabisco's arguments, amounts to a violation of Rule 11(b)(2). Accord, Hansboro v. Northwood Nursing Home, Inc., 151 F.R.D. 95, 97 (N.D.Ind. 1993) (plaintiff's counsel violated Rule 11 by pursuing race discrimination claims despite ample warnings that EEOC charge alleged only sex discrimination); see also Shelton v. Ernst Young, LLP, 143 F. Supp.2d 982, 994 (N.D.Ill. 2001) (plaintiff's counsel violated Rule 11 by pursuing time-barred discrimination claims despite ample warning). The violation here was by the attorney rather than her client. A plaintiff in such a case should be able to rely on her attorney for competent professional advice about whether and how to pursue a discrimination claim within the often technical legal rules that apply to such claims.
Nabisco seeks as a sanction its reasonable attorneys' fees and costs incurred in obtaining dismissal of the claim against it. Rule 11 sanctions need not be monetary, however. A sanction "shall be limited to what is sufficient to deter repetition of such conduct or comparable conduct by others similarly situated." Fed.R.Civ.P. 11(c)(2). The most appropriate sanction in this case is to require attorney Bacon to attend an appropriate continuing legal education program on employment discrimination law no later than March 31, 2002. The court finds no lack of good faith or good will on the part of attorney Bacon, but a lack of knowledge and training in this sometimes difficult field of the law. See Fed.R.Civ.P. 11 Advisory Committee Notes for 1993 amendment to subdivision (c) (possible sanctions may include "requiring participation in seminars or other educational programs"). The court believes the combination of a public finding of a violation of Rule 11 and the required attendance should be sufficient to deter attorney Bacon and others from similar violations in the future.
Conclusion
Plaintiff Ratliff has failed to state a claim against Nabisco upon which relief can be granted. As a result, Nabisco's motion to dismiss is granted, and Ratliff's claims against Nabisco are dismissed with prejudice. No separate judgment shall issue at this time. Nabisco's Rule 11 motion is also granted, and attorney Kimberly Bacon shall file with the court in this action as soon as possible, and no later than March 31, 2002, written proof that she has attended a continuing legal education program of at least six hours on employment discrimination, approved for credit by the Indiana Commission for Continuing Legal Education, and taken after the date of this entry.
So ordered.