Opinion
19-cv-10309 (JGK)
04-26-2022
DR. J. DAVID GOLUB, Plaintiff, v. BERDON LLP, Defendant.
MEMORANDUM OPINION AND ORDER
John G. Koeltl United States District Judge
The pro se plaintiff, Dr. J. David Golub, brought this action against Berdon LLP ("Berdon") alleging violations of the Age Discrimination in Employment Act (“ADEA") and other state and federal statutes. Berdon filed a motion to dismiss the plaintiff's Amended Complaint, which the Court granted in a Memorandum Opinion and Order dated February 17, 2021. See Golub v. Berdon LLP, No. 19-cv-10309, 2021 WL 637974 (S.D.N.Y. Feb. 17, 2021) (the “MTD Order"). In the MTD Order, the Court dismissed the plaintiff's claims without prejudice and afforded the plaintiff the opportunity to “file a motion to file an amended complaint together with a copy of the proposed amended complaint and an explanation why such filing is not futile." Id. at *5.
On April 9, 2021 the plaintiff filed a Second Amended Complaint (“SAC") in which the plaintiff repeated many of the allegations set forth in the Amended Complaint. In the SAC, the plaintiff brought claims arising under the ADEA, the Taxpayer First Act ("TFA"), and state law. Berdon now moves dismiss the SAC for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) and for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). For the reasons explained below, the motion to dismiss is granted in part and denied in part.
Berdon styled its motion as a motion to dismiss pursuant to Rule 12 and/or a motion to deny the plaintiff leave to file the SAC on futility grounds pursuant to Rule 15, Because the plaintiff filed the SAC without an accompanying motion to amend, the Court will treat the present motion as a Rule 12 motion. In any event, irrespective of whether the Court analyzed the motion as one arising under Rule 12 or Rule 15, the same legal standard applies. See, e.g., Perfect Pearl Co., Inc, v. Majestic Pearl & Stone, Inc., 889 F.Supp.2d 453, 459 (S.D.N.Y. 2012) ("A proposal to amend a complaint is futile if the proposed amended complaint would fail to state a claim on which relief could be granted.").
I
The Court assumes familiarity with the alleged facts of this case, which are set forth in detail in the SAC and the MTD Order. See 2021 WL 637974, at *1-2. The following facts are drawn from the SAC and are accepted as true for the purposes of resolving this motion.
In brief, the plaintiff worked as a tax accountant at Berdon, a limited-liability partnership focused on audit, tax, and consulting services. SAC ¶ 7. Berdon engaged the plaintiff initially as a consultant from July .2017 to March 2018 to facilitate a merger with another accounting firm, and then as an employee pursuant to a contract until his termination in July 2018. Id. ¶¶ 11-12. At the time of his discharge, the plaintiff was over the age of 40 and had over 40 years of experience in accounting. Id. ¶¶ 2, 6.
In July 2018, the plaintiff complained to Berdon's managing tax partner about alleged professional misconduct of a colleague, B.S. Id. ¶¶ 12, 20-26. In particular, the plaintiff alleged that B.S. submitted fraudulent filings to the Internal Revenue Service ("IRS") and state government agencies. Id. Shortly thereafter, Berdon terminated the plaintiff's employment. Id. ¶¶ 24-26. When the plaintiff asked for the grounds for his termination, Berdon's managing tax partner stated that he heard a recording of the plaintiff reprimanding B.S. using abusive language. Id. ¶ 19. Another employee stated that there was "an office cultural divide or disconnect and that [the plaintiff] was not a 'team player.'" Id. The plaintiff alleges that Berdon ignored the issues that the plaintiff raised about B.S. and terminated the plaintiff instead of investigating B.S., a younger, less experienced employee. The plaintiff alleges that Berdon's conduct constituted a retaliatory discharge in violation of the ADEA, violated the TEA, and gave rise to several additional state law claims.
Unless otherwise noted, this Memorandum Opinion and Order omits all alterations, citations, footnotes, and internal quotation marks in quoted text.
II
In deciding a motion to dismiss pursuant to Rule 12(b)(6), the allegations in the complaint are accepted as true, and all reasonable inferences must be drawn in the plaintiff's favor. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). The Court's function on a motion to dismiss is “not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient." Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir. 1985). The Court should not dismiss the complaint if the plaintiff has stated “enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp, v. Twombly, 550 U.S. 544, 570 (2007). “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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
When faced with a pro se complaint, the Court must “construe [the] complaint liberally and interpret it to raise the strongest arguments that it suggests." Chavis v. Chappius, 618 F.3d 162, 170 (2d Cir. 2010). “Even in a pro se case, however, . . . threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Thus, although the Court is “obligated to draw the most favorable inferences" that the complaint supports, it “cannot invent factual allegations that [the plaintiff] has not pled." Id.; see also Yajaira Bezares C. v. The Donna Karan Co. Store LLC, No. 13-cv-8560, 2014 WL 2134600, at *1 (S.D.N.Y. May 22, 2014).
III
A
In the MTD Order, the Court concluded that the plaintiff had failed to plead adequately an age-based status claim under the ADEA because there was no plausible connection between the plaintiff's age and his discharge. MTD Order, 2021 WL 637974, at *2-3. The Court further concluded that any retaliation claim under the ADEA should be dismissed because the plaintiff had failed to plead that he had opposed any unlawful employment practice. Id. The plaintiff raises these claims again in the SAC, relying on substantially the same allegations that were contained in the Amended Complaint. .
The ADEA provides that "[i]t shall be unlawful for an employer ... to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age." 29 U.S.C. § 623(a) (1). “In order to establish a prima facie case of age discrimination, the plaintiff must show (1) that [the plaintiff] was within the protected age group, (2) that [the plaintiff] was qualified for the position, (3) that [the plaintiff] experienced adverse employment action, and (4) that such action occurred under circumstances giving rise to an inference of discrimination." Green v. Town of E. Haven, 952 F.3d 394, 403 (2d Cir. 2020). In particular, “a plaintiff alleging age discrimination under the [ADEA] must allege that age was the 'but-for' cause of the employer's adverse action." See Vega v. Hempstead Union Free Sch. Dist., 801 F.3d 72, 86 (2d Cir. 2015) (citing Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 177 (2009)); see also Lively v. WAFRA Inv. Advisory Grp., Inc., No. 19-CV-3257, 2020 WL 4038350, at *4 (S.D.N.Y. July 17, 2020).
The plaintiff has again failed to allege that age was a but-for cause of his termination. The SAC is bereft of new factual allegations that address any of the deficiencies identified in the MTD Order. Instead, the allegations in the SAC, like those in the Amended Complaint, taken as true, demonstrate that the plaintiff's termination was motivated not by age discrimination, but by the plaintiff's reporting of the purported misconduct of a colleague who happened to be younger than the plaintiff. See, e.g., SAC ¶ 9 (alleging that Berdon terminated the plaintiff's employment contract “in retaliation for disclosing to the Berdon managing tax partner, audit and tax malpractice and fraud committed by a Berdon employee-audit principal"); ¶ 26 (stating that the reason proffered for the plaintiff's termination was "code for the concept that [the plaintiff] did not participate in a cover-up" and that "[t]he timing of the employment discharge is no coincidence" because the plaintiff was "terminated three days after B.S. completed his coverup of accounting and tax fraud"); ¶ 28 ("[The plaintiff] presented these issues to the audit principal, B.S., one week prior to [the plaintiff's] termination."); see also Id. at 7 n.2 (Berdon "had and has no valid reason to terminate [the plaintiff] other than to cover-up professional malpractice and tax fraud."). Accordingly, the complaint fails to allege agebased discrimination in violation of the ADEA. See Lively, 2020 WL 4038350, at *4-6 (dismissing an ADEA claim for failure to allege plausibly but-for causation).
The plaintiff's arguments as to why this claim should not be dismissed depend on the invocation of an incorrect legal standard. While the plaintiff contends that his claim survives under a “mixed motive" causation analysis, this argument is without merit. The law is clear that the plaintiff must plausibly allege but-for causation in order to state a claim under the ADEA. See, e.g., Vega, 801 F.3d at 86.
In addition to a status-based claim, the SAC may be construed to advance a retaliation claim under the ADEA. The ADEA provides that it is "unlawful for an employer to discriminate against any of his employees . . . because such individual, member or applicant for membership has opposed any practice made unlawful by this section, or . . . made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or litigation under this chapter." 29 U.S.C. § 623(d). “To state a claim for retaliation in violation of the ADEA, a plaintiff must plead facts that would tend to show that (1) [the plaintiff] participated in a protected activity known to the defendant; (2) the defendant took an employment action disadvantaging [the plaintiff]; and (3) there exists a causal connection between the protected activity and the adverse action." Mabry v. Neighborhood Def. Serv., 769 F. . Supp. 2d 381, 397 (S.D.N.Y. 2011) (citing Patane v. Clark, 508 F.3d 106, 115 (2d Cir. 2007)). As to the protected activity element, the plaintiff must "have had a good faith, reasonable belief that he was opposing an employment practice made unlawful" by the ADEA. Thomas v. Town of Southeast, 336 F.Supp.3d 317, 327 (S.D.N.Y. 2018) .
In the MTD Order, the Court dismissed the plaintiff's ADEA retaliation claim because the Amended Complaint contained no . allegations that the plaintiff engaged.in any activity protected by the ADEA. The SAC includes no new allegations that remedy this deficiency. Accordingly, the plaintiff could not have been retaliated against within the meaning of the ADEA.
The plaintiff was afforded an opportunity to replead these claims but was unable to allege a plausible claim under the ADEA. Accordingly, the plaintiff's claims arising under the ADEA are dismissed with prejudice.
B
In the SAC, the plaintiff advances a new claim arising under the TFA. The TFA was enacted on July 1, 2019 and amended portions of the Internal Revenue Code of 1986. See Pub. L. 116 25, 133 Stat. 981, enacted July 1, 2019. The plaintiff contends that his termination by Berdon violated a section of the TFA that provides as follows:
(1) No employer, or any officer, employee, contractor, subcontractor, or agent of such employer, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment (including through an act in the ordinary course of such employee's duties) in reprisal for any lawful act done by the employee-
(A) to provide information, cause information to be provided, or otherwise assist in an investigation regarding underpayment of tax or any conduct which the employee reasonably believes constitutes a violation of the internal revenue laws or any provision of Federal law relating to tax fraud, when the information or assistance is provided to the Internal Revenue Service, the Secretary of the Treasury, the Treasury Inspector General for Tax Administration, the Comptroller General of the United States, the Department of Justice, the United States Congress, a person with supervisory authority over the employee, or any other person working for the employer who has the authority to investigate, discover, or terminate misconduct .26 U.S.C. § 7623(d)(1)(A).
The plaintiff's claim arising under the TFA should be dismissed for several reasons. First, the provisions of the TFA upon which the plaintiff bases his claim took effect on the day that the TFA was enacted, July 1, 2019, which postdates the plaintiff's July 17, 2018 termination. See Pub, L. 116-25, Title I, § 1405(c)(2). Because the TFA was not in effect at the time that the plaintiff was terminated, the plaintiff cannot maintain a claim arising out of § 7623(d).
The plaintiff has not argued that § 7623(d) should be applied retroactively. "As a general rule, a new statute does not apply retroactively to conduct that occurred prior to the statute's enactment." Ahmad v. Morgan Stanley & Co., Inc., 2 F.Supp.3d 491, 496 (S.D.N.Y. 2014). “Thus, congressional enactments and administrative rules will not be construed to have retroactive effect unless their language requires this result." Id. Such language is absent here. Moreover, § 7623(d) attaches "new legal consequences to events completed before its enactment by increasing a party's liability for past conduct," which is further indicative that the presumption against retroactivity should apply. See id. Accordingly, Berdon cannot be liable under § 7623(d) for conduct that predated the provision's effective date. See id. at 496-99 (concluding that the Dodd-Frank Act's whistleblower retaliation provision did not apply retroactively).
Second, in order to bring a claim pursuant to this section of the TFA, the plaintiff was required to have filed a complaint with the Secretary of Labor within 180 days of his termination. See 26 U.S.C. § 7623(d)(2)(A). The plaintiff could only bring a claim under this section of the TFA in federal court if the Secretary did not issue a decision within 180 days after the plaintiff filed his complaint. Id. However, the plaintiff does not allege that he filed a complaint with the Secretary of Labor and the limitations period for doing so has long since passed. For these reasons, the plaintiff's claim must fail.
Finally, Berdon moved to dismiss the plaintiff's TFA claim in its motion to dismiss and the plaintiff failed to respond to Berdon's arguments or otherwise defend the claim in his opposition papers. Because the plaintiff abandoned this claim, it must be dismissed. See, e.g., Black Lives Matter v. Town of Clarkstown, 354 F.Supp.3d 313, 318 n.1 (S.D.N.Y. 2018).
Although the plaintiff raised this claim for the first time in the SAC, it is clear that there are no amendments or additional factual allegations that could remedy the legal infirmities with the plaintiff's claim. Accordingly, the plaintiff's claim arising under the TFA is dismissed with prejudice.
IV
All the plaintiff's claims arising under federal law have been dismissed. Accordingly, unless the Court has diversity of citizenship jurisdiction or supplemental jurisdiction over the remaining state law claims, these claims must be dismissed for lack of subject matter jurisdiction.
Pursuant to 28 U.S.C. § 1332, federal, courts have subject matter jurisdiction over state law claims when the amount in controversy exceeds the sum or value of $75,000 and there is complete diversity of citizenship among the parties. "In an action in which jurisdiction is premised on diversity of citizenship, diversity must exist at the time the action is commenced." Universal Licensing Corp, v. Paola Del Lungo, S.P.A., 293 F.3d 579, 581 (2d Cir. 2002). The plaintiff bears the burden of showing that the Court has diversity of citizenship jurisdiction in this case. See Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). In determining whether diversity jurisdiction exists, the Court may consider materials outside the pleadings. Id.
Diversity of citizenship "does not exist unless each defendant is a citizen of a different State from each plaintiff." Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978) (emphasis in original). "For purposes of diversity jurisdiction, a party's citizenship depends on his domicile." Linardos v. Fortuna, 157 F.3d 945, 948 (2d Cir. 1998). Domicile is a person's fixed home and principal establishment, and to which, whenever he is absent, the person intends to return. Id. "At any one time, a party can have multiple residences but only one domicile." Galu v. Attias, 923 F.Supp. 590, 595 (S.D.N.Y. 1996). A limited liability partnership such as Berdon inherits the citizenship of all its members. See Carden v. Arkoma Assocs., 494 U.S. 185, 195-96 (1990).
In the SAC, the plaintiff contends that he is currently a domiciliary of South Carolina, but it is unclear what the plaintiff alleges his citizenship was at the time that this action was filed. Compare SAC ¶ 5 (alleging that the plaintiff is a "resident of New Jersey and maintains his domicile in South Carolina"), with Complaint at 5 (alleging that the plaintiff "reside[s]" in both New Jersey and South Carolina), and Amended Complaint at 7 (same). The question of the plaintiff's citizenship is further complicated by the plaintiff's representations to other courts in other lawsuits. For example, in Golub v. Swaaley, No. 16-cv~5386 (E.D.N.Y. filed Sept. 26, 2016), the plaintiff represented in his complaint that he resided in Staten Island, New York in 2016. Id. ECF No. 1. As recently as September 2021, the district court in that case mailed an order to the plaintiff's listed service address, which was also a Staten Island, New York address. Id. ECF Nos. 21, 41. Moreover, in another lawsuit in the District of Massachusetts, the plaintiff filed an amended complaint on December 12, 2019 -just over a month after the plaintiff initiated this action. See Golub v. Northeastern Univ., No. 19-cv-10478, ECF No. 33 (D. Mass. Dec. 12, 2019). In that amended complaint, the plaintiff alleged that he "was and is a resident of New York, New Jersey and South Carolina." Id. ¶ 5. The plaintiff's service address throughout that case was a New Jersey address.
The Court takes judicial notice of the materials filed in these other lawsuits pursuant to Federal Rule of Evidence 201. See Rothman v. Gregor, 220 F.3d 81, 92 (2d Cir. 2000) (taking judicial notice of a complaint filed in another action).
In view of this conflicting evidence, the Court cannot determine where the plaintiff was domiciled at the time that this action was brought and therefore whether complete diversity of. citizenship exists. Accordingly, the plaintiff is directed to provide evidence supporting his contention that he was domiciled in South Carolina at the time that he filed this action by May 20, 2022. See, e.g., Kennedy v. Trs. of Testamentary Trust of Will of Kennedy, 633 F.Supp.2d 77, 81 (S.D.N.Y. 2009) (“Factors frequently taken into account in determining domicile include current residence, voting registration, driver's license and automobile registration, location of brokerage and bank accounts, membership in fraternal organizations, churches, and other associations, places of employment or business, and payment of taxes. Courts also consider whether a person owns or rents his place of residence, the nature of the residence (i.e., how permanent the living arrangement appears) and the location of a person's physician, lawyer, accountant, dentist, stockbroker, etc."). Along with that evidence, the plaintiff is directed to submit an explanation as to how his contention that he was domiciled in South Carolina at the time that he filed the complaint in this action can be reconciled with his representations to the district courts in the Swaaley and Northeastern University actions.
By June 10, 2022, Berdon may respond to the plaintiff's submission and provide evidence to support its contention that there is no complete diversity of citizenship, which may, for example, take the form of a declaration attesting that at least one Berdon partner was domiciled in South Carolina at the time that this action was filed. If the plaintiff fails to provide evidence that establishes at least a prima facie case of complete diversity, then the plaintiff will have failed to establish diversity of citizenship jurisdiction.
If there is no diversity of citizenship jurisdiction, and because there is no federal question jurisdiction, the Court would decline to exercise supplemental jurisdiction over the state law claims. Pursuant to 28 U.S.C. § 1367, federal courts can exercise supplemental subject matter jurisdiction over state law claims that derive from the same "common nucleus of operative fact" as the federal claims brought in the same action. Briarpatch Ltd., L.P, v. Phx. Pictures, Inc., 373 F.3d 296, 308 (2d Cir. 2004) . However, once the Court dismisses the federal claims, the Court may decline to exercise supplemental jurisdiction. See 28 U.S.C. § 1367(c)(3); Kolari v. N.Y.-Presbyterian Hosp., 455 F.3d 118, 122 (2d Cir. 2006).
“Once a district court's discretion is triggered under § 1367(c)(3), it balances the traditional values of judicial economy, convenience, fairness, and comity in deciding whether to exercise jurisdiction." Kolari, 455 F.3d at 122 (quoting Carnegie-Mellon Univ, v. Cohill, 484 U.S. 343, 350 (1988)). “In the usual case in which all federal-law claims are eliminated before trial, the balance of factors will point toward declining to exercise jurisdiction over the remaining state-law claims." Id.
This is plainly the case here. After dismissing the federal claims, the Court's duty would be limited to considering state law claims. Such "[n]eedless decisions of state law should be avoided both as a matter of comity and to promote justice between the parties, by procuring for them a surer-footed reading of applicable law." United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966). Furthermore, the pre-discovery stage of this litigation means that the factors of judicial economy, convenience, fairness, and comity point toward declining supplemental jurisdiction. See Page v. Oath Inc., No. 17-cv-6990, 2018 WL 1406621, at *4 (S.D.N.Y. Mar. 20, 2018), aff'd sub nom, Page v. United States Agency for Glob. Media, 797 Fed.Appx. 550 (2d Cir. 2019). Therefore, the Court would not exercise supplemental jurisdiction over the plaintiff's state law claims in view of the fact that there is no federal question jurisdiction unless the plaintiff can establish that there is diversity of citizenship jurisdiction.
Accordingly, Berdon's motion to dismiss for lack of subject matter jurisdiction is denied without prejudice to seeking such relief after the parties make their respective submissions.
CONCLUSION
The Court has considered all of the arguments raised by the parties. To the extent not specifically addressed, the arguments are either moot or without merit. For the foregoing reasons, the motion to dismiss is granted in part and denied in part. The plaintiff's federal causes of action are dismissed with prejudice. The parties are directed to file submissions with respect to diversity of citizenship jurisdiction as outlined above.
Copies of the unpublished opinions cited in this Memorandum Opinion and Order are attached. The Clerk is directed to mail of copy of this Memorandum Opinion and Order and its attachments to the pro se plaintiff and to note service on the docket. The Clerk is further directed to lift the stay of this action and to close all pending motions.
SO ORDERED.