Opinion
No. CV-19-05022-PHX-SPL
2020-07-16
Renee STEINAKER and David Steinaker, Plaintiffs, v. SOUTHWEST AIRLINES, CO., et al., Defendants.
Diane Marger Moore, Pro Hac Vice, Ronald Laurence Goldman, Pro Hac Vice, Baum Hedlund Aristei & Goldman PC, Los Angeles, CA, Erin A. Hertzog, Joel Taylor Fugate, John Jeffrey Bouma, Larry J. Cohen, Cronus Law PLLC, Phoenix, AZ, for Plaintiffs. Peter Christopher Prynkiewicz, Littler Mendelson PC, Robert Shawn Oller, Littler Mendelson, Phoenix, AZ, for Defendant Southwest Airlines Company. Alyssa Rae Illsley, Dominique Koss Barrett, Lori A. Metcalf, Quintairos Prieto Wood & Boyer PA, Phoenix, AZ, for Defendants Terry Graham, Ryan Russell.
Diane Marger Moore, Pro Hac Vice, Ronald Laurence Goldman, Pro Hac Vice, Baum Hedlund Aristei & Goldman PC, Los Angeles, CA, Erin A. Hertzog, Joel Taylor Fugate, John Jeffrey Bouma, Larry J. Cohen, Cronus Law PLLC, Phoenix, AZ, for Plaintiffs.
Peter Christopher Prynkiewicz, Littler Mendelson PC, Robert Shawn Oller, Littler Mendelson, Phoenix, AZ, for Defendant Southwest Airlines Company.
Alyssa Rae Illsley, Dominique Koss Barrett, Lori A. Metcalf, Quintairos Prieto Wood & Boyer PA, Phoenix, AZ, for Defendants Terry Graham, Ryan Russell.
ORDER
Steven P. Logan, United States District Judge
Pending before the Court is Defendant Southwest Airlines, Co.’s ("Southwest") Motion to Dismiss (the "Motion") (Doc. 29). Defendants Terry Graham ("Graham") and Ryan Russell ("Russell," and collectively with Graham, the "Pilots") have joined in the Motion. The Motion is fully briefed. For the reasons that follow, the Motion will be granted in part and denied in part.
Because it would not assist in resolution of the instant issues, the Court finds the pending motion is suitable for decision without oral argument. See L.R. Civ. 7.2(f); Fed. R. Civ. P. 78(b) ; Partridge v. Reich , 141 F.3d 920, 926 (9th Cir. 1998).
I. Background
Plaintiffs, both flight attendants employed by Southwest, allege in their Third Amended Complaint that two co-employees, the Pilots, surreptitiously watched Ms. Steinaker through a hidden camera when she used the forward lavatory aboard Southwest Flight No. 1088, which flew from Pittsburgh to Phoenix on February 27, 2017. (Doc. 28 at 3–4, 5–6) Additionally, Plaintiffs allege that Ms. Steinaker and the other flight attendants on Flight No. 1088 reported to Southwest that the Pilots were watching and recording everyone who used the forward lavatory (Doc. 28 at 9–10), that Southwest failed to properly investigate this incident, discipline the Pilots, or remedy their alleged misconduct (Doc. 28 at 11–12), and that Southwest has retaliated against Plaintiffs and the other flight attendants from Flight 1088 in an effort to intimidate and silence them (Doc. 28 at 13–14). The Third Amended Complaint contains six causes of action against Southwest: (1) intentional or reckless infliction of emotional distress ("IIED"); (2) invasion of privacy; (3) willful misconduct – failure to train, supervise, investigate, and discipline; (4) breach of the covenant of good faith and fair dealing; (5) sexual harassment/discrimination; and (6) Title VII retaliation. (Doc. 28 at 16–32) Plaintiff also allege two causes of action against the Pilots: (1) intentional or reckless infliction of emotional distress; and (2) invasion of privacy. (Doc. 28 at 16–18, 21–23) All causes of action besides the sexual harassment/discrimination and Title VII retaliation claims are state law causes of action which must be resolved under Arizona law. Plaintiffs allege that Defendants’ actions, or inaction for some of the claims, have caused Ms. Steinaker to suffer physical illness and both Plaintiffs to suffer significant mental and emotional distress. (Doc. 28 at 17–18, 25) Plaintiffs initially filed in the Maricopa County Superior Court on October 25, 2018 and Defendants removed the action to federal court on August 23, 2019. (Doc. 1)
The Court notes that Plaintiffs’ claim for breach of the covenant of good faith and fair dealing potentially involves both state and federal law. Indeed, a covenant of good faith and fair dealing is implied in every contract under Arizona law, but Defendants have asserted a preemption argument under the Railway Labor Act, 45 U.S.C. §§ 151, et seq. , which is a federal law.
II. Legal Standard
A. FRCP 12(b)(1)
Federal Rule of Civil Procedure 12(b)(1) "allows litigants to seek the dismissal of an action from federal court for lack of subject matter jurisdiction." Kinlichee v. United States , 929 F. Supp. 2d 951, 954 (D. Ariz. 2013) (citing Tosco Corp. v. Comtys. for a Better Env't , 236 F.3d 495, 499 (9th Cir. 2001) ). Allegations raised under FRCP 12(b)(1) should be addressed before other reasons for dismissal because if the complaint is dismissed for lack of subject matter jurisdiction, other defenses raised become moot. Kinlichee , 929 F. Supp. 2d at 954. A motion to dismiss for lack of subject matter jurisdiction under FRCP 12(b)(1) may attack either the allegations of the complaint as insufficient to confer upon the court subject matter jurisdiction or the existence of subject matter jurisdiction in fact. Renteria v. United States , 452 F. Supp. 2d 910, 919 (D. Ariz. 2006) (citing Thornhill Publ'g Co., Inc. v. General Tel. & Elecs. Corp. , 594 F.2d 730, 733 (9th Cir. 1979) ); Edison v. United States , 822 F.3d 510, 517 (9th Cir. 2016). When the motion to dismiss attacks the allegations of the complaint as insufficient to confer subject matter jurisdiction, all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party. Renteria , 452 F. Supp. 2d at 919 (citing Federation of African Amer. Contractors v. City of Oakland , 96 F.3d 1204, 1207 (9th Cir. 1996) ). When the motion to dismiss is a factual attack on subject matter jurisdiction, however, no presumptive truthfulness attaches to the plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the existence of subject matter jurisdiction in fact. Renteria , 452 F. Supp. 2d at 919 (citing Thornhill , 594 F.2d at 733 ). A plaintiff has the burden of proving that jurisdiction does in fact exist. Renteria , 452 F. Supp. 2d at 919 (citing Thornhill , 594 F.2d at 733 ). Conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss. Rosenbaum v. Syntex Corp. , 95 F.3d 922, 926 (9th Cir. 1996).
B. FRCP 12(b)(6)
Rule 8(a)(2) requires a "short and plain statement of the claim showing that the pleader is entitled to relief," so that the defendant has "fair notice of what the ... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotations omitted). Also, a complaint must contain sufficient factual matter, which, if accepted as true, states a claim to relief that is "plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Facial plausibility exists if the pleader pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. Plausibility does not equal "probability," but plausibility requires more than a sheer possibility that a defendant acted unlawfully. Id. "Where a complaint pleads facts that are ‘merely consistent with’ a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.’ " Id. (citing Twombly , 550 U.S. at 557, 127 S.Ct. 1955 ).
Although a complaint attacked for failure to state a claim does not need detailed factual allegations, the pleader's obligation to provide the grounds for relief requires "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555, 127 S.Ct. 1955 (internal citations omitted). Rule 8(a)(2) "requires a ‘showing,’ rather than a blanket assertion, of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirement of providing not only ‘fair notice’ of the nature of the claim, but also ‘grounds’ on which the claim rests." Id. (citing 5 C. Wright & A. Miller, FEDERAL PRACTICE AND PROCEDURE § 1202, pp. 94, 95 (3d ed. 2004) ). Thus, Rule 8's pleading standard demands more than "an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).
In deciding a motion to dismiss the Court must construe the facts alleged in the complaint in the light most favorable to the drafter of the complaint and must accept all well-pleaded factual allegations as true. OSU Student Alliance v. Ray , 699 F.3d 1053, 1061 (9th Cir. 2012) ; Shwarz v. United States , 234 F.3d 428, 435 (9th Cir. 2000). Nonetheless, the Court does not have to accept as true a legal conclusion couched as a factual allegation. Papasan v. Allain , 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986).
Furthermore, a motion to dismiss under Rule 12(b)(6) must rely solely on the contents of the pleadings. See Fed. R. Civ. P. 12(d). A court may, however, consider "matters of judicial notice" without converting a motion to dismiss into one for summary judgment. United States v. Ritchie , 342 F.3d 903, 908 (9th Cir. 2003). Furthermore, a court need not accept as true "allegations that contradict matters properly subject to judicial notice" or "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig. , 536 F.3d 1049, 1055 (9th Cir. 2008) (internal quotation marks and citations omitted).
A court may take judicial notice of documents referenced in the complaint, as well as matters in the public record. Lee v. City of Los Angeles , 250 F.3d 668, 688–89 (9th Cir. 2001), overruled on other grounds by Galbraith v. Cty. of Santa Clara , 307 F.3d 1119, 1125–26 (9th Cir. 2002). In addition, the Court may take judicial notice of matters that are either "generally known within the trial court's territorial jurisdiction" or "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). Public records, including judgments and other court documents, are proper subjects of judicial notice. See, e.g. , United States v. Black , 482 F.3d 1035, 1041 (9th Cir. 2007). However, "[j]ust because the document itself is susceptible to judicial notice does not mean that every assertion of fact within that document is judicially noticeable for its truth." Khoja v. Orexigen Therapeutics, Inc. , 899 F.3d 988, 999 (9th Cir. 2018).
III. Analysis
At the outset, the Court notes that Defendants seek dismissal of all the state law causes of action because of the Court's alleged lack of subject matter jurisdiction based on the exclusivity provision of the Arizona Workers’ Compensation Act. (Doc. 29 at 4–9) In the alternative, Defendants argue that each state law cause of action must be dismissed under Rule 12(b)(6) because Plaintiffs have failed to state a claim upon which relief can be granted. (Doc. 29 at 9–14). Finally, Defendants argue that the federal causes of action must be dismissed under Rule 12(b)(6). The Court addresses the defenses related to subject matter jurisdiction first because if the complaint is dismissed on such grounds, other defenses are moot.
A. State Law Causes of Action
Defendants argue that the exclusivity provision of the Arizona Workers’ Compensation Act deprives the Court of jurisdiction to entertain the claims for IIED, invasion of privacy, failure to train, supervise, investigate, and discipline, and good faith and fair dealing as a matter of law. (Doc. 29 at 2) Arizona Revised Statutes ("A.R.S.") § 23-1022(A) states that
[t]he right to recover compensation pursuant to this chapter for injuries sustained by an employee or for the death of an employee is the exclusive remedy against the employer or any co-employee acting in the scope of his employment, and against the employer's workers’ compensation insurance carrier or administrative service representative, except as provided by § 23-906, and except that if the injury is caused by the employer's wilful [sic] misconduct, or in the case of a co-employee by the co-employee's wilful [sic] misconduct, and the act causing the injury is the personal act of the employer, or in the case of a co-employee the personal act of the co-employee, or if the employer is a partnership, on the part of a partner, or if a corporation, on the part of an elective officer of the corporation, and the act indicates a wilful [sic] disregard of the life, limb or bodily safety of employees, the injured employee may either claim compensation or maintain an action at law for damages against the person or entity alleged to have engaged in the wilful [sic] misconduct.
A.R.S. § 23-1022(A) (emphasis added). "Willful conduct" is defined as "an act done knowingly and purposely with the direct object of injuring another." A.R.S. § 23-1022(B). An employee may elect to reject workers’ compensation coverage, and thereby retain the right to sue her employer, only if she submits a written rejection of coverage to her employer before her alleged injury occurs. A.R.S. § 23-906(B)–(C). There is no dispute in this case that Ms. Steinaker never submitted such written rejection. Accordingly, unless Ms. Steinaker can prove each element listed in A.R.S. § 23-1022(A), workers’ compensation is her exclusive remedy when her alleged injury took place during her employment and the Court would be deprived of subject matter jurisdiction over her state law causes of action.
A review of Arizona case law on the topic shows that proving the statutory exception to the exclusivity provision of Arizona's workers’ compensation laws is a daunting task. Even acts classified as gross negligence, or wantonness amounting to gross negligence, do not constitute a "willful act" under this definition; the alleged negligence or wantonness must be accompanied by the employer's intent to inflict injury upon the employee. Cf. Mosakowski v. PSS World Medical, Inc. , 329 F. Supp. 2d 1112, 1129–30 (D. Ariz. 2003) (citing Diaz v. Magma Copper Co. , 190 Ariz. 544, 551, 950 P.2d 1165 (Ct. App. 1997) ). Arizona courts are reluctant to find that employers have acted with wilful misconduct regarding even an employee's physical safety; indeed,
[g]ross negligence is not sufficient to establish wilful misconduct under § 23–1022. The "direct object" of the employer's actions must have been to "injur[e] another." § 23–1022(B) ; see Allen v. Southwest Salt Co. , 149 Ariz. 368, 718 P.2d 1021 (Ariz. App. 1986). Generally, this means that the employer's liability cannot ... be stretched to include accidental injuries caused by the gross, wanton, wilful, deliberate, intentional, reckless, culpable, or malicious negligence, breach of statute, or other misconduct of the employer short of a conscious and deliberate intent directed to the purpose of inflicting an injury.
Even if the alleged conduct goes beyond aggravated negligence, and includes such elements as knowingly permitting a hazardous work condition to exist, knowingly ordering employees to perform an extremely dangerous job, wilfully failing to furnish a safe place to work, wilfully violating a safety statute, ... or withholding information about worksite hazards, the conduct still falls short of the kind of actual intention to injure that robs the injury of accidental character.
Gamez v. Brush Wellman, Inc. , 201 Ariz. 266, 269, 34 P.3d 375 (Ct. App. 2001) (some internal citations omitted).
Arizona courts have defined four elements that must be present to maintain a willful misconduct action
(1) the employer's willful misconduct must have been the cause of the employee's injury, (2) the willful misconduct must have been an act done ... knowingly and purposely with the direct object of injuring another, (3) the act that caused the injury must have been the personal act of the employer, and (4) the act must have reflected a willful disregard of the life, limb or bodily safety of employees.
McKee v. State , 241 Ariz. 377, 382, 388 P.3d 14 (Ct. App. 2016) (citing Gamez , 201 Ariz. at 269, 34 P.3d 375 ) (internal quotations omitted). In McKee , the mother of a firefighter who died fighting the Yarnell Hill Fire in June 2013 brought a wrongful death and IIED action against the State. She alleged that the actions of two supervisors who left their posts were a dereliction of duty that caused her son's death. Id. at 382, 388 P.3d 14. The trial court dismissed the complaint because it found that the allegations did not rise to the level of willful conduct as required to trigger the exception to the exclusivity statute and the mother appealed the dismissal. The Court of Appeals affirmed the trial court. Indeed, the Court of Appeals reasoned that "[t]he complaint alleges a series of negligent and grossly negligent acts that, if proven, culminated in the deaths of the Granite Mountain Hotshot crew; however, it does not allege these acts were done knowingly and purposely with the direct object of injuring the firefighters." Id. Additionally, the Court of Appeals reasoned that "[the mother] d[id] not allege that either of the supervisors [left their posts] with the deliberate intention of harming McKee or any member of the Granite Mountain Hotshot crew." The Court of Appeals concluded that "as a matter of law, [the mother]’s complaint does not allege that defendants acted with the requisite intent to constitute wilful [sic] misconduct." Id.
Plaintiffs allege that Southwest allowed the Pilots and the aircraft that was used for Flight 1088 to leave Phoenix without conducting any interview, seizing the Pilots’ phones, iPads, or other recording devices, conducting any search of any evidence, or preserving the flight data and flight deck voice recorders. (Doc. 28 at 10–11, ¶¶ 69–72) Furthermore, Plaintiffs allege that Southwest failed to report the incident to any law enforcement agency, failed to properly investigate the incident, failed to take any disciplinary action against the Pilots, adopted and perpetuated the Pilots’ allegedly false narrative that the incident was a prank video, directed Ms. Steinaker not to discuss the incident with anyone, and engaged in a series of retaliatory acts against Plaintiffs. (Doc. 28 at 11–14, ¶¶ 73–93; 19–20, ¶¶ 124–127) In response to Defendants’ argument that the exclusivity provision of Arizona's workers’ compensation laws bars their action, Plaintiff argue that the injuries they suffered are not compensable under workers’ compensation laws and also that they "did not suffer physical injury during an accident at work." (Doc. 36 at 6) The Court finds both arguments unavailing.
Before addressing those two arguments, the Court finds that the allegations contained in the Third Amended Complaint are not enough to meet the "willful conduct" exception. Even taking all factual allegations as true, which the Court must do under a Motion to Dismiss standard, the Court cannot find that a reasonable juror could find that Southwest or the Pilots acted with the "conscious and deliberate intent directed to the purpose of inflicting an injury." Gamez , 201 Ariz. at 269, 34 P.3d 375. A juror may find Southwest's actions, or inaction when it decided not to discipline the Pilots, investigate the incident, or ground the plane to gather evidence, to be reckless, or grossly negligent. But the Court cannot conclude that a juror could find that such actions and inaction rise to the level of intending to cause an injury to Plaintiffs when actions such as knowingly permitting a hazardous work condition to exist, knowingly ordering employees to perform an extremely dangerous job, willfully failing to furnish a safe place to work, willfully violating a safety statute, or withholding information about worksite hazards do not mandate such conclusion. Plaintiffs allege that Southwest and the Pilots acted with the intent to inflict injury upon Plaintiffs, but a legal conclusion couched as a factual allegation is not enough to survive a motion to dismiss. There must be facts from which the Court can draw all reasonable inferences. The Court finds that the facts alleged in the Third Amended Complaint do not meet the applicable pleading standard.
Furthermore, Plaintiffs themselves stated that the Pilots "made illegal secret recordings of the nude buttocks and genitals of men, women, and children to satisfy their own prurient and financial goals." (Doc. 36 at 2) This is not akin to a co-employee committing an assault and battery with the sole intent to harm and cause an injury to his or her co-employee. Such act would surely fall outside the scope of workers’ compensation and within the ambit of the willful conduct exception. Accordingly, the Court finds that Plaintiff have not met their burden to plead facts showing a willful conduct, as that term is defined in the Arizona Workers’ Compensation Act, from either Southwest or the Pilots. Accordingly, the exclusivity provision of Arizona's Workers’ Compensation Act is applicable to the three state law claims Plaintiffs asserted against Southwest and the two state law claims asserted against the Pilots and the Court lacks subject matter jurisdiction on those claims. Accordingly, Plaintiffs’ claims for intentional infliction of emotional distress, invasion of privacy, failure to train, supervise, and investigate against Southwest and claims for intentional infliction of emotional distress and invasion of privacy against the Pilots must be dismissed with prejudice for lack of subject matter jurisdiction.
For purposes of clarity, the Court now turns to Plaintiffs’ two arguments against the application of Arizona's workers’ compensation laws to their state law claims. In their response to the Motion, Plaintiffs do not address Defendants’ argument and case citations on the issue of exclusivity. Instead, they rely on one case, Ford v. Revlon , 153 Ariz. 38, 734 P.2d 580 (1987), for the proposition that workers’ compensation does not cover the claims and injuries that they have alleged in this case. Specifically, Plaintiffs argue that the Ford court "stated plainly that Arizona's Workers’ Compensation Act does not protect employees who intentionally cause harm to other employees, nor does it protect employers who are aware of the intentional acts, but fail to investigate the complaints and protect the employee." (Doc. 36 at 5) The Court finds that the Ford court did not make such sweeping statements and did not adopt such a broad holding. In Ford , an employee suffered repeated sexual harassment from a fellow employee, including numerous explicit, expletive-filled demands for sexual contact and one instance of sexual assault. Ford , 153 Ariz. at 40–42, 734 P.2d 580. Ford complained to eight different company officials who did nothing to address them for over a year even after they determined that Ford was telling the truth. Id. at 41–42, 734 P.2d 580. Ford attempted suicide as a result of the continuous harassment and brought an action against the harasser and the employer for assault and battery and IIED. Id. at 42, 734 P.2d 580. The jury found the harasser liable for assault and battery but not for IIED and found the employer liable for IIED but not for assault and battery. Id. at 42, 734 P.2d 580. The employer appealed arguing that workers’ compensation was Ford's exclusive remedy and the Arizona Supreme Court granted the petition to hear the case following reversal by the Court of Appeals.
The Court disagreed, reasoning that "Ford's severe emotional distress injury was found by the jury to be not unexpected and was essentially nonphysical in nature." Id. at 44, 734 P.2d 580 (emphasis added). The Court also noted that the trial court stated that
[e]vidence established that this tort was committed through defendant's action and inaction to plaintiff's complaints made over a period in excess of eight months. Such action and inaction and the resulting emotional injury to the plaintiff were therefore not "unexpected," accidental, or physical in nature so as to limit plaintiff's recovery to the workmen's compensation claim under A.R.S. §§ 23–1021(B) and 1043.01(B).
Id. The Arizona Supreme Court further noted that A.R.S. § 23-1043.01(B) sets forth a "limiting standard for compensation under the statute for physiological injury." Id. The statute provides that "[a] mental injury ... shall not be considered a personal injury by accident ... and is not compensable ... unless ... unexpected, unusual or extraordinary stress ... or some physical injury ... was a substantial contributing cause." A.R.S. § 23-1043.01(B). Given that the jury had already found both the employer and the employee liable for an intentional tort, the employee for assault and battery, and the employer for IIED respectively, the Court concluded that the plaintiff was able to enforce common-law liability against her employer under the facts of the case. Id.
The Court finds that this case is distinguishable from Ford . The Court finds that the stress and mental anguish to which Ms. Steinaker was subjected by the alleged conduct of the Pilots certainly falls into the category of the unexpected, unusual, or extraordinary. There is no question that the stress related to the alleged conduct from the Pilots results from a situation of much greater dimension that the day-to-day mental stress and tension which any employee might experience from a job. See Irvin Investors v. Superior Court , 166 Ariz. 113, 114–15, 800 P.2d 979 (Ct. App. 1990) (rejecting arguments that the type of injuries a plaintiff suffered based on a claim of sexual harassment were not compensable under A.R.S. § 23-1043.01(B) because the stress from sexual harassment was clearly in the category of the unexpected, unusual, or extraordinary); see also Findley v. Industrial Comm'n , 135 Ariz. 273, 276, 660 P.2d 874 (Ct. App. 1983) (holding that when a manager and owner of a brick company installed a new kiln system and several unlucky events caused financial difficulties, the resulting mental disorder and suicide of the manager were caused by work-related stress which was unexpected, unusual, and extraordinary under A.R.S. § 23-1043.01(B) ); Fireman's Fund. Ins. Co. v. Industrial Comm'n , 119 Ariz. 51, 579 P.2d 555 (1978) (holding that delegation of excessive duties and responsibilities to an employee fit within the category of unexpected, unusual, and extraordinary stress). But see Ziv v. Industrial Comm'n , 160 Ariz. 330, 332–34, 773 P.2d 228 (Ct. App. 1989) (holding that an employee who suffered mental injuries resulting from impending failure of business was not entitled to compensation because prospects of economic loss or business failure did not constitute unexpected, unusual, or extraordinary stress); Lapare v. Industrial Comm'n , 154 Ariz. 318, 742 P.2d 819 (Ct. App. 1987) (holding that emotional injuries stemming from the fear and anxiety that an employee felt after learning that he might lose his job after 20 years due to his employer's financial difficulties were not compensable under Arizona's workers’ compensation laws because the notice that one might lose his or her job is not unexpected, unusual, or extraordinary); Sloss v. Industrial Comm'n , 121 Ariz. 10, 11–12, 588 P.2d 303 (1978) (holding that the mental injury allegedly suffered by a highway patrolman was not compensable when he had not been exposed to stress greater than his fellow employees). Accordingly, the Court finds that the alleged injuries are compensable under Arizona's Workers’ Compensation statutes because the stress which allegedly caused them is more akin to the type of stress in Irvin Investors , Findley , and Fireman's Fund , which were found to be unexpected, unusual, and extraordinary, than the possibility of business failure in Ziv or the notice of loss of job in Lapare .
Turning next to Plaintiffs’ argument that they did not suffer physical injury during an accident at work, bringing their claims outside the scope of workers’ compensation laws, the Court finds that argument unpersuasive. Plaintiffs more specifically argue that workers’ compensation law "exists to protect employees and workers who are physically injured as a result of accidents, not abuse not related to the job." (Doc. 36 at 6–7) The statutory provisions of the Arizona Workers’ compensation Act are clear: unless the injury was "purposely self-inflicted" or was the result of "an act done knowingly and purposely with the direct object of injuring another," a work-related injury is considered to have been caused by accident and fall within the ambit of the Act. See A.R.S. §§ 23-1021, -1022(B). Thus, when an employee injures his hand by deliberately punching a metal door, the injury is "self-inflicted" and not "accidental." Glodo v. Indus. Comm'n of Ariz. , 191 Ariz. 259, 263, 955 P.2d 15 (Ct. App. 1997). Conversely, when an employer allows employees to work in a ditch despite repeated warnings of a possible cave-in, the resulting injury is nonetheless "accidental." Serna v. Statewide Contractors, Inc. , 6 Ariz. App. 12, 16, 429 P.2d 504 (Ct. App. 1967) ; see also Ortiz v. Clinton , 187 Ariz. 294, 928 P.2d 718 (Ct. App. 1996). Thus, "an ‘accident’ is any work-connected injury between the extremes of a ‘purposely self-inflicted’ injury ... and one inflicted by [another] acting ‘knowingly and purposely with the direct object of injuring’ the employee." Ford , 153 Ariz. at 47, 734 P.2d 580 (Feldman, J., concurring); see also Johnson v. Kerr-McGee Oil Indus., Inc. , 129 Ariz. 393, 398, 631 P.2d 548 (Ct. App. 1981) (finding that "gross, wanton, wilful, deliberate, intentional, reckless" behavior does not make an injury non-accidental).
B. Breach of the Covenant of Good Faith and Fair Dealing and Federal Preemption
The Court now turns to Plaintiffs’ three causes of action involving federal law. Plaintiffs brought a claim for breach of the covenant of good faith and fair dealing against Southwest. (Doc. 28 at 26–29) Plaintiffs argue that Southwest owed them a "duty of good faith and fair dealing in regards to their employment contracts" and a duty of "care and to take action if it became aware of employees—especially commanding officers in supervisory roles—engaging in willful activities that disrupted or destroyed its obligation to maintain a positive and safe working environment, free from sexual harassment, discrimination, retaliation, hostile, threatening, and/or intim[id]ating behavior." (Doc. 28 at 26) Plaintiff finally argue that Southwest’ alleged decision not to investigate the incident on Flight 1088, discipline the Pilots, and remedy their wrongful conduct deprived Plaintiffs of "the full benefits of their employment contract with Southwest Airlines." (Doc. 28 at 27)
Defendants acknowledge that the covenant of good faith and fair dealing is implied in every contract under Arizona law, including employment contracts, but argue that the terms and conditions of Plaintiffs’ employment with Southwest are governed by the collective bargaining agreement (the "CBA") between Southwest and Plaintiffs’ union, the Transport Workers Union of America ("AFL-CIO"). (Doc. 29 at 13) Defendants further argue that Plaintiffs’ claim on the issue of good faith and fair dealing involves the interpretation and application of the CBA and is preempted by the Railway Labor Act, 45 U.S.C. §§ 151, et seq. (the "RLA"). (Doc. 29 at 13)
There is no dispute that the RLA applies to Southwest as an airline carrier engaged in interstate or foreign commerce. See 45 U.S.C. § 181 ("All of the provisions of subchapter I of this chapter except section 153 of this title are extended to and shall cover every common carrier by air engaged in interstate or foreign commerce ... and every air pilot or other person who performs any work as an employee or subordinate official of such carrier or carriers, subject to its or their continuing authority to supervise and direct the manner of rendition of his service."). The RLA creates a mandatory mediation process to resolve minor disputes between airlines and covered employees. See Hawaiian Airlines, Inc. v. Norris , 512 U.S. 246, 252, 114 S.Ct. 2239, 129 L.Ed.2d 203 (1994) (reasoning that the RLA "establishes a mandatory arbitral mechanism for the ‘prompt and orderly settlement’ " of two classes of labor disputes) (citing 45 U.S.C. § 151a, the general purposes provision of the RLA). Courts classify labor disputes in two categories for purposes of the RLA: major and minor. The first class, those concerning "rates of pay, rules or working conditions," 45 U.S.C. § 151a, are deemed "major" disputes. "Major disputes relate to the formation of collective [bargaining] agreements or efforts to secure them." Hawaiian Airlines , 512 U.S. at 252, 114 S.Ct. 2239 (quoting Consolidated Rail Corporation (Conrail), v. Railway Labor Executives' Assn. , 491 U.S. 299, 302, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989) ) (internal quotations omitted). The second class of disputes, known as "minor" disputes, "gro[w] out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions." Id. at 252–53, 114 S.Ct. 2239. "Minor disputes involve controversies over the meaning of an existing collective bargaining agreement in a particular fact situation." Id. at 253, 114 S.Ct. 2239 (quoting Trainmen v. Chicago R. & I.R. Co. , 353 U.S. 30, 33, 77 S.Ct. 635, 1 L.Ed.2d 622 (1957) ) (internal quotations omitted). "Thus, major disputes seek to create contractual rights, minor disputes to enforce them." Id. Minor disputes are preempted by the RLA and must be resolved through the RLA mechanisms, including the carrier's internal dispute-resolution processes and an adjustment board established by the employer and the unions. 45 U.S.C. § 184 ; see also Atchison, T. & S.F.R. Co. v. Buell , 480 U.S. 557, 562, 563, 107 S.Ct. 1410, 94 L.Ed.2d 563 (1987) ; Conrail , 491 U.S. at 302, 109 S.Ct. 2477.
Minor disputes subject to RLA arbitration are those that involve duties and rights created or defined by the CBA. Hawaiian Airlines , 512 U.S. at 258, 114 S.Ct. 2239. Consequently, the RLA's mechanism for resolving minor disputes does not preempt causes of action to enforce rights that are independent of the CBA. Id. The Supreme Court of the United States in Hawaiian Airlines decided to adopt the preemption standard it had created in the context of Section 301 of the Labor Management Relation Act ("LMRA"). Id. at 263, 114 S.Ct. 2239. One particularly instructive case in the preemption context under the LMRA, which was cited by the Supreme Court in Hawaiian Airlines , is Allis-Chalmers Corp. v. Lueck , 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985). In Allis , the Court applied § 301 LMRA preemption to a state-law claim for bad-faith handling of a worker's compensation claim because the duties the employer owed the employee, including the duty of good faith, were rooted firmly in the CBA. Its preemption finding was based on the fact that "the right asserted not only derives from the contract, but is defined by the contractual obligation of good faith, [so that] any attempt to assess liability here inevitably will involve contract interpretation." Id. , at 218, 105 S.Ct. 1904. However, the Court in Allis cautioned that
not every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement, is pre-empted by § 301 or other provisions of the federal labor law .... Nor is there any suggestion that Congress, in adopting § 301, wished to give the substantive provisions of private agreements the force of federal law, ousting any inconsistent state regulation .... Clearly, § 301 does not grant the parties to a collective-bargaining agreement the ability to contract for what is illegal under state law. In extending the pre-emptive effect of § 301 beyond suits for breach of contract, it would be inconsistent with congressional intent under that section to pre-empt state rules that proscribe conduct, or establish rights and obligations, independent of a labor contract.
Id. at 211–12, 105 S.Ct. 1904. Furthermore, in Lingle v. Norge Div. of Magic Chef, Inc. , 486 U.S. 399, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988), the Supreme Court observed, in the context of § 301 of the LMRA, that "purely factual questions about an employee's conduct or an employer's conduct and motives do not requir[e] a court to interpret any term of a collective-bargaining agreement." 486 U.S. at 407, 108 S.Ct. 1877. Such disputes are not preempted.
With this background in mind, the Court finds that Plaintiffs’ claim for breach of the covenant of good faith and fair dealing is preempted by the RLA. Indeed, Plaintiffs’ allegations are that Southwest actions and inactions breached the covenant of good faith and fair dealing implied in their employment contract and deprived them of the benefits of such employment contract. The Court cannot discern the scope of such benefits without interpreting or applying the employment contract which governs the employment relationship between Plaintiffs and Southwest. Southwest has attached to its Motion what it claims to be the CBA which governs such relationship. (Doc. 29, Ex. A) Southwest appears to argue that attaching the CBA does not convert the motion to dismiss into a motion for summary judgment because its authenticity is not contested, and Plaintiffs’ complaint necessarily relies on it. (Doc. 29 at 13, fn.1) Plaintiffs challenged the authenticity of the exhibit, arguing that it was never disclosed or authenticated, that it references other documents not attached by Southwest, and that attaching it to the Motion converts the motion to dismiss into a motion for summary judgement but that the Court should disregard the document in its entirety. (Doc. 36 at 13)
Southwest argues that the CBA was disclosed and produced, as bates numbers SW0125-0366, as part of its responses to the Mandatory Initial Discovery Requests on September 20, 2019. (Doc. 42 at 10) Additionally, and fatal to Plaintiff's argument opposing preemption, Plaintiffs themselves argue that "absent a complete set of employment documents, it is impossible to properly address or interpret the impact of the CBA has on [Southwest]’s duty to act in good faith." (Doc. 36 at 13) This statement makes it clear that Plaintiffs understand that the Court would need to look at the CBA and maybe other documents to assess the scope of Southwest's duty of good faith. This is precisely the type of minor disputes covered by the RLA's preemption provision because it involves the interpretation and application of the CBA. Additionally, the Court finds that the CBA attached by Southwest is essential to Plaintiff's claim for breach of the covenant of good faith and fair dealing which is based on the employment contract between the parties. The Court can properly consider it without converting the Motion into one for summary judgment. Accordingly, the Court finds that Plaintiffs’ claim for breach of the covenant of good faith and fair dealing is preempted by the RLA and must be dismissed with prejudice.
C. Sex Harassment/Discrimination under Title VII
Next, the Court turns to Ms. Steinaker's claim against Southwest for Title VII sex harassment/discrimination. (Doc. 28 at 29–30) Ms. Steinaker relies on her previous allegations related to Southwest's actions and inaction to argue that she was "subjected to unwelcome harassment on the basis of her sex and sexual nature as a result of the incident that occurred on Flight 1088." (Doc. 28 at 29) Ms. Steinaker further alleges that the harassment was sufficiently severe or pervasive that a reasonable person in [her] position would find the work environment to be hostile or abusive." (Doc. 28 at 29) Southwest argues that Ms. Steinaker failed to allege any fact which would support the conclusion that it took any action against Ms. Steinaker because of her gender, which is required to succeed on a claim for sexual harassment and/or discrimination under Title VII. (Docs. 29 at 14–15; 42 at 11)
A plaintiff may establish a violation of Title VII by "proving that discrimination based on sex has created a hostile or abusive work environment." Meritor Sav. Bank, FSB v. Vinson , 477 U.S. 57, 66, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986). A claim for sex harassment and/or sex discrimination must rest on proof that such conduct took place because of plaintiff's gender. The Supreme Court emphasized the underlying basis for sexual harassment claims under Title VII in Oncale v. Sundowner Offshore Services, Inc. , 523 U.S. 75, 118 S.Ct. 998, 140 L.Ed.2d 201 (1998). The Court stated that Title VII does not prohibit all verbal or physical harassment in the workplace; it is directed only at "discrimination because of sex." Oncale , 523 U.S. at 80, 118 S.Ct. 998. The core inquiry "is whether members of one sex are exposed to disadvantageous terms or conditions of employment to which members of the other sex are not exposed." Id. It follows that "if the nature of an employee's environment, however unpleasant, is not due to her gender, she has not been the victim of sex discrimination as a result of that environment." Stahl v. Sun Microsystems, Inc. , 19 F.3d 533, 538 (10th Cir. 1994).
Ms. Steinaker has made no allegations from which the Court can infer that she was subject to harassment or discrimination by Southwest on the basis of her gender. The Third Amended Complaint contains one legal conclusion that she was "subjected to unwelcome harassment on the basis of her sex and sexual nature as a result of the incident that occurred on Flight 1088" but such legal conclusion cannot form the basis for her claim, factual allegations are needed and the Third Amended Complaint is fatally deficient on that issue. None of the other allegations have anything to do with Ms. Steinaker's gender. Without such factual basis, her claim for Title VII cannot survive as a matter of law. Additionally, she claimed that the Pilots watched and recorded everyone, men, women, and children included. This argument cuts against any gender-based motive for the Pilots’ actions. Plaintiffs also argue that the Court should "consider the relevant studies and statistical evidence regarding who video voyers target and why" in an attempt to defeat the Motion on this claim. (Doc. 36 at 15–16) The Court does not see why statistical evidence would have any effect on its ruling when Plaintiffs themselves alleged that the Pilots watched everyone irrespective of gender or age. Such evidence could be useful in a case at a later stage or in another context, but it cannot cure the factual defect of the Third Amended Complaint. However, the Court finds that Ms. Steinaker may be able to plead enough facts to satisfy her burden to survive a motion to dismiss on this claim. Accordingly, the Court will allow Plaintiffs to file a Fourth Amended Complaint to cure the factual defects of her sex harassment/discrimination under Title VII.
Because the Court finds that Ms. Steinaker failed to allege facts sufficient to support her conclusory allegations that Southwest's actions or inaction were based on her gender, and such failure is dispositive of her claim as a matter of law, the Court does not address the second part of the standard for a sexual harassment/sexual discrimination claim under Title VII that the alleged discrimination was sufficient to create a hostile or abusive work environment.
D. Retaliation under Title VII
Finally, the Court turns to Plaintiff's Title VII retaliation claim against Southwest. (Doc. 28 at 30–32) Plaintiffs allege that, following Ms. Steinaker's reports of the Pilots’ actions on Flight No. 1088, Southwest has retaliated against both Ms. Steinaker and her husband. (Doc. 30–31) Specifically, Plaintiffs allege that Southwest took "actions which effectively changed the terms and conditions of [Ms.] Steinaker's employment and reasons that [Southwest] submits for changing the terms and conditions of Plaintiff's employment are false and pretext for unlawful discrimination." (Doc. 28 at 30) Some of the allegations related to the alleged retaliation are "threatening or implying threats to Plaintiffs’ employment status and/or reputation with the company; excessively monitoring, auditing, and scrutinizing Plaintiffs’ work performance without justification; ... subjecting Plaintiffs to unwarranted and frivolous performance evaluations, drug and alcohol testing, and in-person work audits." (Doc. 28 at 31, ¶ 194) Ms. Steinaker also alleges that "she engaged in protected activity by reporting, complaining of, and/or opposing the unlawful retaliation that she, Mr. Steinaker, and her fellow flight attendants on Flight 1088 were subjected to following her reports of sexual harassment by Graham and Russell." (Doc. 28 at 31, ¶ 192)
To establish a retaliation claim under Title VII, an employee must show that he or she engaged in statutorily protected activity, suffered an adverse employment action, and establish a causal link between the protected activity and the adverse action. See Nilsson v. City of Mesa , 503 F.3d 947, 953–54 (9th Cir. 2007) ; Vasquez v. County of Los Angeles , 349 F.3d 634, 646 (9th Cir. 2003). Engaging in statutorily protected activity means that the employee protested or otherwise opposed an unlawful employment practice against employees protected by Title VII. See Moyo v. Gomez , 40 F.3d 982, 984 (9th Cir. 1994). "It is not necessary, however, that the employment practice actually be unlawful; opposition clause protection will be accorded whenever the opposition is based on a reasonable belief that the employer has engaged in an unlawful employment practice." Id. (citing EEOC v. Crown Zellerbach Corp. , 720 F.2d 1008, 1013 (9th Cir. 1983) ) (emphasis added) "An erroneous belief that an employer engaged in an unlawful employment practice is reasonable, and thus actionable under § 704(a), if premised on a mistake made in good faith. A good-faith mistake may be one of fact or of law." Id. "The reasonableness of [a plaitniff's] belief that an unlawful employment practice occurred must be assessed according to an objective standard—one that makes due allowance, moreover, for the limited knowledge possessed by most Title VII plaintiffs about the factual and legal bases of their claims." Id. at 985. The Ninth Circuit has noted that "it has been long established that Title VII, as remedial legislation, is construed broadly." Id.
The Supreme Court has clarified that sexual harassment is actionable under Title VII only if it is "so ‘severe or pervasive’ as to ‘alter the conditions of [the victim's] employment and create an abusive working environment.’ " Clark County School Dist. v. Breeden , 532 U.S. 268, 270, 121 S.Ct. 1508, 149 L.Ed.2d 509 (2001). Workplace conduct is not measured in isolation; instead, whether an environment is sufficiently hostile or abusive must be judged by looking at all the circumstances, including the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee's work performance." Id. at 270–71, 121 S.Ct. 1508. The Supreme Court has noted that "[a] recurring point in [our] opinions is that simple teasing, offhand comments, and isolated incidents (unless extremely serious) will not amount to discriminatory changes in the ‘terms and conditions of employment.’ " Id. at 271, 121 S.Ct. 1508.
Here, Plaintiffs have made a retaliation claims based on two protected activities they allegedly engaged in: (1) reporting, complaining of, and/or opposing the Pilots’ actions on Flight No. 1088, the alleged video recording in the forward lavatory; and (2) reporting, complaining of, and/or opposing the alleged retaliation by Southwest following Ms. Steinaker's reports of the incident aboard Flight No. 1088. The Court looks at each of those activities in turn to determine whether Plaintiffs could have had a reasonable belief that the actions they reported were a violation of Title VII.
Turning first to Plaintiff's reporting of the alleged incident on Flight No. 1088, the Court finds that they could have had a reasonable belief that the Pilots’ actions were an unlawful employment practice under Title VII. Indeed, it is true that the Pilots’ actions may not be, as a matter of law, unlawful under Title VII. But the inquiry for the Court is not whether there was an actual violation of Title VII but instead, whether Ms. Steinaker had a reasonable belief that the conduct of the Pilots was unlawful when she reported it to Southwest. The Court finds that it cannot conclude as a matter of law and at this stage of the case that she did not have such reasonable belief or that her belief was not reasonable. Considering "the limited knowledge possessed by most Title VII plaintiffs, [like Ms. Steinaker in this case] about the factual and legal bases of their claims," it is possible that one occurrence of video recording in a lavatory onboard a commercial plane was reasonably unlawful to Ms. Steinaker. The Court does not find that such belief is unreasonable as a matter of law. Indeed, although the conduct at issue was not repeated over the course of several months or years as to Ms. Steinaker and was limited to Flight No. 1088, the alleged recording of staff and passengers in a lavatory could rise to the level of an isolated incident which is serious enough to qualify as sexual harassment. Again, Ms. Steinaker does not need to succeed on the sexual harassment claim to succeed on a retaliation claim, only to have had a reasonable belief that the acts she opposed and/or reported were unlawful. Accordingly, the Court will deny the motion to dismiss on the Title VII retaliation claim brought by Plaintiffs based on the alleged actions of the Pilots.
Turning now to Plaintiffs’ claim of retaliation based on their reporting of Southwest's own retaliation following the reports of the Flight No. 1088 incident, the Court finds that Plaintiffs could have had a reasonable belief that Southwest alleged actions were an unlawful employment practice under Title VII. Plaintiffs essentially allege unlawful retaliation based on their reporting of, and opposition to, Southwest alleged retaliation. The Court cannot conclude as a matter of law that Plaintiffs’ belief that Southwest's alleged actions following Ms. Steinaker's reporting of the Flight NO. 1088 incident was unreasonable. It may be true that, following discovery, Plaintiffs’ belief may appear unreasonable. Then the Court might grant summary judgment in favor of the Defendants if the law and the evidence in the record warrants it. However, at this stage of the case, taking all well-pleaded factual allegations in the light most favorable to Plaintiffs, it is possible that their belief Southwest had unlawfully retaliated against them was reasonable and they have pleaded enough facts for their second theory of retaliation to survive the Motion. Accordingly, the Court will deny the motion to dismiss on the Title VII retaliation claim brought by Plaintiffs based on Southwest's allegedly retaliatory actions following Ms. Steinaker's reporting of the incident aboard Flight No. 1088.
Accordingly,
IT IS ORDERED that:
1. Defendant Southwest Airlines, Co.’s Motion to Dismiss the Third Amended Complaint (Doc. 29) is granted in part and denied in part ;
2. Counts I through V of the Third Amended Complaint (Doc. 28) are dismissed with prejudice;
3. Count VI of the Third Amended Complaint is dismissed without prejudice to the filing of a Fourth Amended Complaint on that count only;
4. Plaintiffs, if they so choose, are granted leave to amend the Third Amended Complaint only as to Count VI no later than July 30, 2020 ; and
4. The Motion to Dismiss is denied as to Count VII of the Third Amended Complaint.