Opinion
Civ. No. JFM-98-3565.
November 1999.
MEMORANDUM
This is an employment discrimination case brought by seven employees against their employer, Giant Food, Inc.; one of Giant's principal shareholders, J. Sainsbury (USA) Holdings Inc. ("Sainsbury Holdings"); the union representing several of the plaintiffs; and four individual Giant executives and managers. Plaintiffs contend that the defendants discriminated against them on the basis of race, gender, age, disability, and religion. Plaintiffs assert violations of Title VII of the Civil Rights Act of 1964 ("Title VII"); the Age Discrimination in Employment Act of 1967 ("ADEA"); the Americans with Disabilities Act ("ADA"); 42 U.S.C. § 1981, 1985, and 1986; the District of Columbia Human Rights Act ("DCHRA"); and several state common law claims.
These claims are on behalf of a class of all similarly situated African-American Giant employees and former employees, as well as all African-American Giant employees and former employees who are over the age of 40 or who are disabled. In addition, Plaintiffs purport to bring their claims on behalf of future African-American Giant employees.
Each defendant has moved to have at least one of the counts against them dismissed. Defendant Pete Manos, a former Giant president and CEO, has moved to dismiss all the claims brought against him. Defendants Giant Food Inc., Deborah Lilly, Nicholas Sacchetti, and Robert Schoening have filed motions to dismiss the DCHRA, malicious prosecution, and defamation claims of plaintiffs' amended complaint. Sainsbury Holdings has filed a motion to dismiss for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2). For the reasons stated below, the defendants' motions will be granted.
After Manos filed his motion, the plaintiffs dismissed many of the counts previously asserted against him. Plaintiffs dismissed their claims arising under the Maryland Fair Employment Practices Law and the Virginia Human Rights Act against all defendants because neither statute provides for a private right of action. Plaintiffs also dismissed their Title VII, ADEA, and ADA claims against all individual defendants, including Manos. Finally, they have dismissed their wrongful termination, breach of contract, and retaliation claims against Manos.
Defendant United Food Commercial Food Workers International Union, AFL-CIO, Union Local 400 has also filed a motion to dismiss or, in the alternative, for summary judgment. Its motion is discussed in a separate opinion.
Defendant Sainsbury Holdings also moved to dismiss for failure to state a claim upon which relief could be granted under Fed.R.Civ.P. 12(b)(6). Because I find that I lack jurisdiction over it, this Court needs not reach that closely related issue.
A. Count I ( 42 U.S.C. § 1981, 1985, and 1986) Section 1981. Section 1981 prohibits racial discrimination with respect to contractual employment relationships. See 42 U.S.C. § 1981(a). In order to show a violation of this section, plaintiffs must show that the prohibited conduct involved "purposeful discrimination." General Bldg. Contractors Ass'n v. Pennsylvania, 458 U.S. 375, 389 (1982). Moreover, corporate directors are not personally liable under the statute for violations by their corporation unless they "intentionally cause [the] corporation to infringe the rights secured by" § 1981.Tillman v. Wheaton-Haven Recreation Ass'n, 517 F.2d 1141, 1146 (4th Cir. 1975). Plaintiffs may show this by proving that an officer "personally voted for the policy, or otherwise directly participated in the corporation's tort." Weaver v. Gross, 605 F. Supp. 210, 213 (D.D.C. 1985).
Here, plaintiffs allege that Manos "directed, set and established the policies and practices complained of" and "perpetrated, condoned, maintained and subjected Plaintiff[s]" to racially discriminatory policies. Pls.' Am. Compl. at 9, 16. Manos seeks to have the § 1981 action dismissed for a failure to state a claim under Fed.R.Civ.P. 12(b)(6). He argues that the amended complaint's allegations are too vague and conclusory to state a violation of § 1981. In opposition, plaintiffs argue that the motion to dismiss should be denied since I permitted similar claims to go forward in Carson v. Giant Food Inc., No. 96-2882 (D. Md. Sept. 12, 1996), aff'd, 175 F.3d 325 (4th Cir. 1999). I disagree.
In that case, I stated that the allegations against Manos "are awful thin. I, frankly, think it's not an appropriate practice to name chief executives for the sake of naming them. But, if the allegations are there, they are there." Tr. Hr'g Mot. Dismiss at 10, Carson v. Giant Food Inc., No. 96-2882 (D. Md. May 23, 1997).
To state a claim under § 1981, plaintiffs must allege that Manos personally and intentionally engaged in purposeful discrimination. Plaintiffs have failed to do this. Merely reciting that Manos directed and maintained discriminatory corporate policies is insufficient. Even assuming that such allegations are true, plaintiffs are unable to state a claim. Nowhere is it alleged that Manos intentionally established policies with the purpose of discriminating on the basis of race. My ruling in Carson is distinguishable since in that case plaintiffs alleged that Manos had personal knowledge of racial discrimination and failed to take action.
Section 1985. Plaintiffs charge that Manos "participated as a co-conspirator to deprive Plaintiffs, jointly and severally, of rights guaranteed under Federal and Maryland State law." Pls.' Am. Compl. at 9. In their opposition memorandum, plaintiffs allege that "the discriminatory culture was pervasive at Giant, invading and extending to all of its operations and could not be overlooked or ignored." Pls.' Opp'n Mem. at 19.
The first element required for a claim under § 1985(3) is "a conspiracy of two or more persons." Simmons v. Poe, 47 F.3d 1370, 1376 (4th Cir. 1995). Plaintiffs' amended complaint fails to allege this basic element and accordingly will be dismissed for failure to state a claim. As stated in Buschi v. Kirven, 775 F.2d 1240, 1251 (4th Cir. 1985), a corporate officer or other agent cannot conspire with the corporation itself. Therefore, it is impossible for the plaintiffs to maintain a claim that Manos, an officer of Giant corporation, conspired with Giant.
If instead, the plaintiffs intended to allege an agreement between Manos and either J. Sainsbury (USA) Holdings Inc. or United Food and Commercial Workers Union, Local 400, the § 1985 claims would still be dismissed. A § 1985 claim that "fails to allege facts suggesting an agreement or meeting of the minds among the defendants" is facially insufficient. Sales v. Murray, 862 F. Supp. 1511, 1517 (W.D. Va. 1994). Their allegations do not merit any discovery and their § 1985 action against Manos will be dismissed.
Section 1986. The plaintiffs claim against Manos for violations of § 1986 is equally flawed. Under § 1986, a plaintiff must allege that the defendant knew of the conspiracy, had the power to prevent the conspiracy, and failed to do so. The amended complaint does not make any of these allegations.
B. Count III, D.C. Human Rights Act
The D.C. Human Rights Act ("DCHRA") is broad in its coverage but applies only to jobs within the boundaries of the District of Columbia. See Green v. Kinney Shoe Corp., 704 F. Supp. 259, 260 (D.D.C. 1988) ("The broad language of the Act leads the Court to understand that the Human Rights [Act] was intended to cover all discrimination concerning jobs located in the District of Columbia, even if the application and decision to discriminate were made outside the District.") (emphasis added). None of the plaintiffs, except Evans, was ever employed by Giant in the District.
Evans does aver that he worked for several years with Giant in the District, including most recently one month in 1996. However, under the DCHRA a claim must be brought within a year of the discriminatory violation. See D.C. Code Ann. § 1-2544(a). Any unlawful conduct occurring in the District on the part of Giant against Evans would have occurred on or prior to May 26, 1996, the last day Evans was assigned to work in the District. Evans did not file his complaint until September 1997, more than a year later. Therefore, his claim is time-barred.
C. Count VIII, Myra B. Jones' Malicious Prosecution Claim
Plaintiff Myra Jones, a former bakery clerk at a Giant store located in Virginia, asserts a claim for malicious prosecution. She alleges that she was accused by her managers of stealing two cans of soup from the store at which she worked, that defendants notified the police, and that prosecutors subsequently charged her criminally for the alleged theft. Acquitted by a jury after an initial bench trial conviction, Jones alleges that she suffered injury as a result of the prosecution.
Under Virginia law, which the parties agree applies, to succeed on a claim for malicious prosecution, a plaintiff must allege that the prosecution was instituted by or with the cooperation of the defendant, that it did not terminate in a manner unfavorable to the plaintiff, that it was without probable cause, and that it was malicious. See Lee v. Southland Corp., 244 S.E.2d 756, 758 (Va. 1978). Jones does not satisfy the latter two requirements because Giant had probable cause to pursue her prosecution and lacked malice in its institution of criminal proceedings based on the undisputed fact that Jones did not pay for the soup cans concealed in her bag as she left the store. The fact that Jones was originally convicted conclusively establishes that there was probable cause for the prosecution, and her subsequent acquittal following a jury trial de novo does not change this result. See, e.g., Asuncion v. City of Gaithersburg, No. 95-1159, 1996 WL 1842, at *1-2 (4th Cir. Jan. 3, 1996) (decided under Maryland law, which follows the same rules as Virginia). Jones alleges that the original conviction does not constitute evidence of probable cause because Defendants procured it "through fraud or by means of evidence which [they] knew to be false," Rickets v. J.G. McCrory Co., 121 S.E. 916 (Va. 1924). However, she has made so specific factual allegations to support this conclusory averment.
Furthermore, Giant is exempt from civil liability on this charge. Virginia statutorily exempts from civil liability on malicious prosecution claims a merchant who detains or institutes proceedings against a suspected shoplifter upon probable cause.See Va. Code Ann. § 18.2-105 (Michie 1996). As noted previously, Giant had probable cause to believe that Jones had "shoplifted or committed willful concealment of goods or merchandise," id., and therefore had probable cause to detain and institute proceedings against Jones.
Jones asserts her malicious prosecution claim against Manos as well as Giant. She alleges no facts, however, that demonstrate that he personally participated in the events leading to the prosecution. This is yet another fatal flaw to her claim. She may not proceed against Manos unless she can demonstrate that he personally participated in the corporation's tort. See Tillman, 517 F.2d at 1144 ("If a director does not personally participate in the corporation's tort, general corporation law does not subject him to liability simply by virtue of his office."). The same is true as to Jones' defamation claim discussed in the next section of the text.
D. Count IX, Myra B. Jones' Defamation Claim
Defendant Myra B. Jones also alleges that her name has been defamed under Virginia state common law. Not only does she fail to state her claim with sufficient particularity, but, in so far as can be determined from her vague pleadings, her claim is grounded in privileged statements. Giant's communications with the police concerning the alleged theft are entitled to an absolute privilege (as Jones concedes), and Giant's internal employee communications and those with Jones' prospective employers are at a minimum qualifiedly privileged.
Furthermore, if Jones did consent, as it appears, to have her potential employers contact Giant for a reference, this would constitute consent to publication and would be an absolute privilege against the defamation charge based on those communications.
E. Sainsbury Holdings' Motion
1. Discovery Requests
Plaintiffs argue that this Court should allow discovery before ruling on the issue of personal jurisdiction. While discovery might be allowed in some cases to establish personal jurisdiction, denial of discovery is appropriate where plaintiffs have failed to allege specific facts supporting jurisdiction. See McLaughlin v. McPhail, 707 F.2d 800 (4th Cir. 1983) (upholding the denial of discovery in case in which plaintiff offered nothing more than bare allegations of defendants' contacts with Maryland);Lehigh Valley Indus., Inc. v. Birenbaum, 527 F.2d 87 (2d Cir. 1975) (finding no abuse of discretion in denying discovery where plaintiffs failed to allege specific facts that would connect defendants to forum state); Caribbean Broad. Sys., Ltd. v. Cable Wireless p.l.c., 148 F.3d 1080, 1090 (D.C. Cir. 1998) (holding that the mere assertion of jurisdictional facts does not compel limited discovery). Because Plaintiffs have offered nothing more than conclusory allegations of jurisdictional facts, this request for discovery will be denied.
2. Personal Jurisdiction Analysis
Defendant Sainsbury Holdings contends that the complaint against it should be dismissed for lack of personal jurisdiction. Maryland law provides two separate bases for jurisdiction depending on both the quality and quantity of the contacts: specific jurisdiction, based upon contacts that the defendant had with the forum, and general jurisdiction, based upon the conduct of the defendant within the forum. See Camelback Ski Corp. v. Behning, 312 Md. 330, 338, 539 A.2d 1107, 1111) (Md. 1988). Neither theory finds sufficient support in this record. a. Specific Jurisdiction
Plaintiffs bear the burden of alleging and proving personal jurisdiction over the foreign defendant. See Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993). Because courts make this decision absent an evidentiary hearing, Plaintiffs are required only to establish a prima facie case of personal jurisdiction. See id. Although all "reasonable" inferences should be drawn from the proof and all factual disputes should be resolved in the plaintiffs' favor, see id., "[m]ere averments of jurisdiction are not enough nor may conclusory, unsupported statements contained in the accompanying affidavits be relied upon to demonstrate jurisdiction." Holfield v. Power Chem. Co., 382 F. Supp. 388, 390 (D. Md. 1974).
Plaintiffs argue that "there is evidence that Sainsbury sent numerous representatives into Maryland to meet with Giant employees concerning such involvement in its operations, thus raising the spectra of work performed and business transacted here." Pls.' Opp'n Mem. at 24. Plaintiffs base this allegation on corporate presentations given by "Sainsbury" (presumably meaning J Sainsbury p.l.c., Sainsbury Holdings' London parent corporation) representatives in 1996 to Maryland Giant employees.See, e.g., Myra B. Jones Aff. ¶¶ 9-10 . This fact alone cannot support a finding of specific personal jurisdiction under Maryland law. One visit to a state by representatives of J Sainsbury p.l.c. — let alone Sainsbury Holdings — does not amount to "continuous and systematic" contacts and is not "tantamount to physical presence there." See McGann v. Wilson, 117 Md. App. 595, 605, 701 A.2d 873, 878 (Md.Ct.Spec.App. 1997) (holding that a single business trip does not constitute a "substantial enough connection" with Maryland to make the exercise of jurisdiction reasonable); see also Quinn v. Bowmar Publ'g Co., 445 F. Supp. 780 (D. Md. 1978) (same). Furthermore, for the time period in question, Sainsbury Holdings maintained no office, post office box, bank account, or telephone listing in Maryland, had no agent for service in the state nor any employees in the United States, and was incorporated and registered to do business only in the State of Delaware. Indeed, specific jurisdiction clearly is not present because the Plaintiffs' cause of action did not arise out of J Sainsbury p.l.c.'s visit to Maryland, and especially not out of any actions by the named defendant Sainsbury Holdings.
b. General Jurisdiction
Plaintiffs also have not established that this Court would have general personal jurisdiction over Sainsbury Holdings. Plaintiffs contend that Sainsbury Holdings, as a shareholder of 50% of Giant's outstanding voting stock, should be subject to personal jurisdiction based on the actions of its subsidiary. It is clear, however, that mere ownership of stock in a company is insufficient to confer jurisdiction over a defendant. See Shaffer v. Heitner, 433 U.S. 186, 216 (1977); see also Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 61 (4th Cir. 1993) (holding that actions of a subsidiary would be attributed to a parent corporation "only if the parent exerts considerable control over the activities of the subsidiary"); Amhil Enters. Ltd. v. Wawa, Inc., No. 93-1349, 1994 WL 750535, at *5 (D. Md. Dec. 16, 1994) (citing DeWitt Truck Brokers, Inc. v. J. Ray Flemming Fruit Co., 540 F.2d 681, 684 (4th Cir. 1976)) ("Ownership of almost all of the corporation's stock by one individual, by itself, provides insufficient grounds for disregarding the corporate form.").
Plaintiffs contend, however, that "there is proof to suggest Sainsbury's control over and participation in the operations of Giant . . . in this State." Pls.' Opp'n Mem. at 24. To support this allegation, Plaintiffs assert that the president of Sainsbury Holdings is on the Giant Board of Directors and that other J Sainsbury p.l.c. employees have "participate[d] in the management and operation of Giant Food, Inc. [since] 1994." Id. at 24. Plaintiffs cite Giant's hiring of a former J Sainsbury p.l.c. executive, who had served for two years as a consultant to Giant from J Sainsbury p.l.c., as its chief operating officer in 1997.See id. at Ex. 3. Finally, Plaintiffs refer to a stockholder report for the fiscal year ending February 22, 1997, which lists Sainsbury Holdings as a holder of 50% of Giant's voting shares.See id. at Ex. 2.
These conclusions are examples of "conclusory, unsupported statements contained in the accompanying affidavits" that are insufficient to confer jurisdiction. Holfield v. Power Chem. Co., 382 F. Supp. 388, 390 (D. Md. 1974). Giant's employment of former Sainsbury Holdings and J Sainsbury p.l.c. employees, the presence of one J Sainsbury p.l.c. executive on the Board of Directors, and mere non-majority stock ownership do not evidence control over Giant by J Sainsbury p.l.c., let alone by the mere stock holding company once removed, Sainsbury Holdings. The Defendant has affirmatively stated that it "never participated in the retail business operations undertaken by Giant[,] . . . exercised control over Giant's hiring and firing decisions[,] . . . or supervised or participated in the daily operation of Giant's business." Matthews Aff. at 8. Indeed, Defendant was "not even an operating company; rather, its sole activity was to hold shares of Giant stock for J Sainsbury p.l.c., its London parent corporation." Def. Opp'n Mem. at 3. Plaintiffs do not contend that corporate formalities were ignored, that Giant had no independent reason for its existence, or that it merely did the bidding of Sainsbury Holdings. This record is therefore woefully lacking of support for the propositions that the Defendant has "purposefully avail[ed] itself of the privilege of conducting activities within the forum State," Hanson v. Denckla, 357 U.S. 235, 253 (1958), or had "continuous and systematic general business contacts" with Maryland sufficient to justify the exercise of personal jurisdiction in this case. Helicopteros Nacionales De Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984).
For the reasons herein stated, defendants' motions to dismiss plaintiffs' claims are granted. A separate order to that effect is being entered herewith.
Order
For the reasons stated in the memorandum entered herewith, it is, this _____ day of November 1999
ORDERED that:
1. defendant Pete Manos' motion to dismiss plaintiffs'. claims under §§ 1981, 1985, and 1986, and the DCHRA is GRANTED;
2. defendant Manos' motion to dismiss plaintiff Myra Jones' claims of malicious prosecution and defamation is GRANTED;
3. the motion to dismiss Counts III, VIII, and IX of Plaintiffs' amended complaint, filed by defendants Giant Food Inc., Deborah Lilly, Nicholas Sacchetti, and Robert Schoening, is GRANTED; and
4. the motion to dismiss filed by J Sainsbury (USA) Holdings Inc. pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction is GRANTED.