Opinion
22-CV-2296 (LTS)
04-15-2022
DAVID STALLING, Plaintiff, v. T3 TRADING GROUP, LLC., Defendant.
ORDER TO AMEND
LAURA TAYLOR SWAIN, Chief United States District Judge.
Plaintiff brings this pro se action under 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. §§ 2000e to 2000e-17, the New York State Human Rights Law, N.Y. Exec. Law §§ 290 to 297, and the New York City Human Rights Law, N.Y.C. Admin. Code §§ 8-101 to 131. He alleges that Defendant T3 Trading Group, LLC (“T3 Trading Group”) discriminated against him in hiring based on his race and color.
By order dated April 6, 2022, the Court granted Plaintiff's request to proceed in forma pauperis, that is, without prepayment of fees.
STANDARD OF REVIEW
The Court must dismiss an in forma pauperis complaint, or any portion of the complaint, that is frivolous or malicious, fails to state a claim on which relief may be granted, or seeks monetary relief from a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2)(B); see Livingston v. Adirondack Beverage Co., 141 F.3d 434, 437 (2d Cir. 1998). The Court must also dismiss a complaint when the Court lacks subject matter jurisdiction of the claims raised. See Fed.R.Civ.P. 12(h)(3).
While the law mandates dismissal on any of these grounds, the Court is obliged to construe pro se pleadings liberally, Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009), and interpret them to raise the “strongest [claims] that they suggest, ” Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006) (internal quotation marks and citations omitted) (emphasis in original). But the “special solicitude” in pro se cases, id. at 475 (citation omitted), has its limits -to state a claim, pro se pleadings still must comply with Rule 8 of the Federal Rules of Civil Procedure, which requires a complaint to make a short and plain statement showing that the pleader is entitled to relief.
The Supreme Court has held that, under Rule 8, a complaint must include enough facts to state a claim for relief “that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible if the plaintiff pleads enough factual detail to allow the Court to draw the inference that the defendant is liable for the alleged misconduct. In reviewing the complaint, the Court must accept all well-pleaded factual allegations as true. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). But it does not have to accept as true “[t]hreadbare recitals of the elements of a cause of action, ” which are essentially just legal conclusions. Twombly, 550 U.S. at 555. After separating legal conclusions from well-pleaded factual allegations, the Court must determine whether those facts make it plausible - not merely possible - that the pleader is entitled to relief. Id.
BACKGROUND
Plaintiff David Stalling alleges the following in his complaint. On July 18, 2020, he “applied to T3 Trading Group.”(ECF 2 at 6.) On August 10, 2020, someone from T3 Trading Group reached out to Plaintiff to schedule a phone interview. (Id.) Plaintiff attaches to the complaint an August 10, 2020 email, in which someone with the T3 Trading Group inquires about setting up a phone call with Plaintiff and notifies him that there is no “salary as compensation is based on trading performance and traders are required to commit risk capital.” (Id. at 26-27.) Plaintiff had a phone interview on August 12, 2020, and a few days later, on August 14, 2020, T3 Trading Group provided him forms to complete, directions regarding submitting photo identification and address verification, and requested a $245.00 check to cover registration fees for Financial Industry Regulatory Authority (“FINRA”) examinations. (Id.) Plaintiff attaches to the complaint a document showing that the paperwork included the “Associated Person Packet, ” “T3 Prop Packet, ” information about fingerprinting, and other documents.
Plaintiff also includes an allegation with a different date. He alleges that he “applied for a position with Respondent on August 8, 2020, as a Trader.” (ECF 2 at 5.)
In Plaintiff's August 25, 2020 email, attached to the complaint, he indicates to T3 Trading Group that his paperwork “is finished.” (Id. at 26.) Nothing in the complaint suggests that Plaintiff submitted a $245.00 check for the FINRA examination. In response, T3 Trading Group sent an email to Plaintiff on August 25, 2020, which states that “[C]ompliance should be in touch soon with next steps.” (Id. at 26.) On September 8, 2020, T3 Trading Group's Director of Compliance notified Plaintiff that his “application would not move forward, ” but Plaintiff “was not provided a reason.” (Id. at 5.)
A few months later, on October 19, 2020, Plaintiff filed a discrimination charge with the New York State Division of Human Rights (DHR), asserting that T3 Trading Group had discriminated against him based on his race. (Id. at 8.) T3 Trading Group's statement to DHR, attached to the complaint, states that Plaintiff was applying to be a member of the trading group, not an employee. (ECF 2 at 18.) To be a member and become a “proprietary trader, ” he would need to pass two FINRA industry examinations and provide a capital contribution. (Id.) T3 Trading Group states that Plaintiff had submitted fingerprints but did not submit photo identification or any other paperwork. (Id.) The EEOC issued a notice of right to sue letter on February 17, 2022, indicating that it was closing the investigation into the charge because Plaintiff was “not in an employment relationship with the Respondent.” (Id. at 14.)
Plaintiff contends that T3 Trading Group failed to “hire” him because of his race and color, and seeks unspecified compensation from July 18, 2020, “up until trial.” (Id. at 6.)
DISCUSSION
A. Discrimination Under Title VII
Title VII “cover[s] ‘employees,' not independent contractors.” Eisenberg v. Advance Relocation & Storage, Inc., 237 F.3d 111, 113 (2d Cir. 2000). Whether an individual is an employee for purposes of Title VII is determined under common law agency principles. See O'Connor v. Davis, 126 F.3d 112, 115 (2d Cir. 1997); Frankel v. Bally, Inc., 987 F.2d 86, 90 (2d Cir. 1993). Under the common law of agency, the thirteen factors articulated by the Supreme Court in Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989), govern whether a person is an employee or an independent contractor. Of these factors, the “‘greatest emphasis' should be placed on the first factor-that is, on the extent to which the hiring party controls the ‘manner and means' by which the worker completes his or her assigned tasks.” Eisenberg, 237 F.3d at 114 (citation omitted); see also Legeno v. Douglas Elliman, LLC, 311 Fed.Appx. 403, 405 (2d Cir. 2009) (affirming district court's decision that real estate salesperson was an independent contractor where it was undisputed that the individual “can work from home, sets his or her own hours, is paid on commission, receives no benefits, and pays all taxes” and had “substantial discretion” over how work was performed).
By contrast, “[s]ection 1981 protects not only individual[] [employees] but also independent contractors.” D'Ambrosio v. Bast Hatfield, Inc., No. 6:12-CV-1895, 2017 WL 6388889, at *7 (N.D.N.Y. Sept. 28, 2017) (citing Danco, Inc. v. Wal-Mart Stores, Inc., 178 F.3d 8, 14 (1st Cir. 1999)), aff'd, 737 Fed.Appx. 44 (2d Cir. 2018) (summary order).
The thirteen Reid factors are: (1) the hiring party's right to control the manner and means by which the product is accomplished; (2) the skill required; (3) the source of the instrumentalities and tools; (4) the location of the work; (5) the duration of the relationship between the parties; (6) whether the hiring party has the right to assign additional projects to the hired party; (7) the extent of the hired party's discretion over when and how long to work; (8) the method of payment; (9) the hired party's role in hiring and paying assistants; (10) whether the work is part of the regular business of the hiring party; (11) whether the hiring party is in business; (12) the provision of employee benefits; and (13) the tax treatment of the hired party. Reid, 490 U.S. at 751-52.
For employers covered by Title VII, it is unlawful to “fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex or national origin.” 42 U.S.C. § 2000e-2(a). Title VII thus prohibits employers from mistreating an individual because of the individual's protected characteristics, Patane v. Clark, 508 F.3d 106, 112 (2d Cir. 2007), or retaliating against an employee who has opposed any practice made unlawful by that statute, see Crawford v. Metro. Gov't, 555 U.S. 271, 276 (2009) (holding that conduct is protected when it “confront[s], ” “resist[s], ” or “withstand[s]” unlawful actions). Mistreatment at work that occurs for a reason other than an employee's protected characteristic or opposition to unlawful conduct is not actionable under Title VII. See Chukwuka v. City of New York, 513 Fed.Appx. 34, 36 (2d Cir. 2013) (quoting Brown v. Henderson, 257 F.3d 246, 252 (2d Cir. 2001)).
At the pleading stage in an employment discrimination action, “a plaintiff must plausibly allege that (1) the employer took adverse employment action against him, and (2) his race, color, religion, sex, or national origin was a motivating factor in the employment decision.” Vega v. Hempstead Union Free Sch. Dist., 801 F.3d 72, 86 (2d Cir. 2015). The plaintiff “may do so by alleging facts that directly show discrimination or facts that indirectly show discrimination by giving rise to a plausible inference of discrimination.” Id. at 87.
Here, Plaintiff alleges that T3 Trading Group was a potential employer, though there appears to be a factual dispute about whether, under Title VII, Defendant qualifies as an employer. At this stage, the Court assumes that Defendant T3 Trading Group was a potential employer, despite some indicia to the contrary.
Plaintiff fails, however, to plead facts sufficient to allege discrimination based on race. Plaintiff does not allege any facts that directly show discrimination. Instead, he alleges that after he submitted fingerprints, paperwork, and photo identification, the compliance unit determined that his application with the T3 Trading Group would not proceed. These allegations are insufficient to give rise to a plausible inference that race was a motiving factor in the employment decision. Plaintiff's complaint thus does not provide any basis for inferring that his race motivated the decision that his application would not proceed. Plaintiff thus fails to state a claim under Title VII.
There is also a factual dispute about whether Plaintiff submitted paperwork and identification. At this stage, the Court accepts Plaintiff's factual allegations as true.
Indeed, the complaint itself suggests at least one other reason unrelated to race that would be a basis for denying Plaintiff's application. Plaintiff acknowledges that a capital contribution was required to become a trader with T3 Trading Group, and as his application to proceed in forma pauperis in this action reflects, he is indigent.
B. Race Discrimination Under 42 U.S.C. § 1981
To state a claim of discrimination under Section 1981, a plaintiff must allege facts showing that: “(1) [the] plaintiff[] [is a] member[] of a racial minority; (2) [the] defendant['s] intent to discriminate on the basis of race; and (3) discrimination concerning one of the statute's enumerated activities.” Brown v. City of Oneonta, 221 F.3d 329, 339 (2d Cir. 2000). “[A] plaintiff must . . . plead . . . that, but for race, [the plaintiff] would not have suffered the loss of a legally protected right.” Comcast Corp. v. Nat'l Ass'n of African Am.-Owned Media, 140 S.Ct. 1009, 1019 (2020). Thus, for a claim of race discrimination under Section 1981, “it is insufficient to merely plead that race was a motivating factor in the discriminatory action.” Brown v. Montefiore Med. Ctr., No. 19-CV-11474, 2021 WL 1163797, at *5 (S.D.N.Y. Mar. 25, 2021) (citing Comcast Corp., 140 S.Ct. at 1017-18).
Plaintiff's allegations, which the Court has already concluded are insufficient to state a Title VII claim that race was a “motiving factor” in T3 Trading Group's denial of his application, are also insufficient to plead that “but for” his race, T3 Trading Group would not have denied his application. Plaintiff thus also fails to state a claim of race discrimination under Section 1981.
C. Leave to Amend
Plaintiff proceeds in this matter without the benefit of an attorney. District courts generally should grant a self-represented plaintiff an opportunity to amend a complaint to cure its defects, unless amendment would be futile. See Hill v. Curcione, 657 F.3d 116, 123-24 (2d Cir. 2011); Salahuddin v. Cuomo, 861 F.2d 40, 42 (2d Cir. 1988). Indeed, the Second Circuit has cautioned that district courts “should not dismiss [a pro se complaint] without granting leave to amend at least once when a liberal reading of the complaint gives any indication that a valid claim might be stated.” Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000) (quoting Gomez v. USAA Fed. Sav. Bank, 171 F.3d 794, 795 (2d Cir. 1999)).
Although the facts alleged give little indication that Plaintiff may be able to state a claim for race discrimination, in an abundance of caution, the Court grants Plaintiff 30 days' leave to amend his complaint to detail his claims. In his amended complaint, Plaintiff must plead any facts showing some basis for inferring that race was a motivating factor in the denial of his application, for purposes of a Title VII claim, or that “but for” his race, his application would have proceeded, for purposes of a claim under section 1981.
In the “Statement of Claim” section of the amended complaint form, Plaintiff must provide a short and plain statement of the relevant facts supporting each claim against each defendant. If Plaintiff has an address for any named defendant, Plaintiff must provide it. Plaintiff should include all of the information in the amended complaint that Plaintiff wants the Court to consider in deciding whether the amended complaint states a claim for relief. That information should include:
a) the names and titles of all relevant people;
b) a description of all relevant events, including what each defendant did or failed to do, the approximate date and time of each event, and the general location where each event occurred;
c) a description of the injuries Plaintiff suffered; and
d) the relief Plaintiff seeks, such as money damages, injunctive relief, or declaratory relief.
Essentially, Plaintiff's amended complaint should tell the Court: who violated his federally protected rights and how; when and where such violations occurred; and why Plaintiff is entitled to relief.
Because Plaintiff's amended complaint will completely replace, not supplement, the original complaint, any facts or claims that Plaintiff wants to include from the original complaint must be repeated in the amended complaint.
CONCLUSION
Plaintiff is granted leave to file an amended complaint that complies with the standards set forth above. Plaintiff must submit the amended complaint to this Court's Pro Se Intake Unit within thirty days of the date of this order, caption the document as an “Amended Complaint, ” and label the document with docket number 22-CV-2296 (LTS). An Amended Complaint for Employment Discrimination form is attached to this order. No summons will issue at this time. If Plaintiff fails to comply within the time allowed, and he cannot show good cause to excuse such failure, the complaint will be dismissed for failure to state a claim upon which relief may be granted, and the Court will decline to exercise jurisdiction of any state and local law claims that Plaintiff is seeking to assert.
The Court certifies under 28 U.S.C. § 1915(a)(3) that any appeal from this order would not be taken in good faith, and therefore in forma pauperis status is denied for the purpose of an appeal. Cf. Coppedge v. United States, 369 U.S. 438, 444-45 (1962) (holding that an appellant demonstrates good faith when he seeks review of a nonfrivolous issue).
SO ORDERED.