Hornsby v. Watt

217 F.Supp.3d 58

Richard HORNSBY, Plaintiff,

v.Melvin L. WATT, Director, Federal Housing Finance Agency, Defendant.

Civil Action No. 16–0517 (GK)

United States District Court, District of Columbia.

Signed November 4, 2016

David H. Shapiro, Swick & Shapiro, P.C., Washington, DC, for Plaintiff.

Elizabeth L. Kade, U.S. Department of Justice, Jason Todd Cohen, U.S. Attorney's Office, Washington, DC, for Defendant.

Memorandum Opinion and Order

Gladys Kessler, United States District Judge

Plaintiff Richard Hornsby ("Plaintiff," "Hornsby") brings this lawsuit against the Director of the Federal Housing Finance Agency ("Defendant," "Government," or "FHFA"). Plaintiff alleges two counts of retaliation in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e et seq. Complaint ¶¶ 26–29. Specifically, Plaintiff alleges that he was placed on administrative leave and then proposed for removal from his position because he agreed to settle a retaliation complaint brought against FHFA by one of his subordinates. See generally Complaint. Plaintiff seeks compensatory damages of $300,000, plus interest, improved performance ratings and any resultant bonuses, plus interest, crediting of annual and sick leave for the time he remained on administrative leave, and attorney's fees and costs. Id. at p. 14–15.

Pursuant to Rule 12(b) (6) of the Federal Rules of Civil Procedure, Defendant filed its Motion to Dismiss on June 23, 2016. Mot. to Dismiss [Dkt. No. 7]. Plaintiff filed his Opposition on July 14, 2016. Opp'n [Dkt. No. 9]. Defendant filed a Reply on July 21, 2016. Reply [Dkt. No. 10]. Upon consideration of the Motion, Opposition, Reply, and the entire record herein, and for the reasons stated below, Defendant's Motion to Dismiss is granted.

I. Background

A. Factual Background¹

i. Hornsby's Early Tenure at FHFA

Richard Hornsby was hired as the Chief Operating Officer ("COO") of FHFA on December 6, 2011. Complaint ¶ 5. Initially, Hornsby reported to Edward DeMarco ("DeMarco"), who had been the previous COO of FHFA but was serving as the Acting Director at the time of Hornsby's hire. Id. at ¶ 9. For 2012, Hornsby's first full year as COO, DeMarco rated his performance as "Outstanding" and gave him a bonus of $17,500 and a retention allowance of over $25,000.² Id.

ii. Deterioration in Relationship between Hornsby and DeMarco

Sometime in 2013, Melvin Watt was nominated to be the Director of FHFA. Id. at ¶ 10. DeMarco allegedly became concerned that if Watt were confirmed, he would be forced into a position with significantly less authority than that of either Acting Director or COO. Id. When it became evident in September 2013 that Watt would likely be confirmed, DeMarco allegedly began a campaign of "criticism and abuse" intended to drive Hornsby from FHFA so that DeMarco could take back his position as COO. Id.

For example, in September 2013 DeMarco cancelled Hornsby's retention bonus, and in December 2013 DeMarco informed Hornsby that he would be receiving a critical performance rating for 2013. Id. at ¶ 11. On March 11, 2014, DeMarco provided Hornsby with his 2013 performance review, rating his performance "Fully Successful." Id. This rating was two levels below the 2012 rating of "Outstanding," and made Hornsby ineligible for a cash bonus. Id. at ¶¶ 11, 12.

Watt took office as the Director of FHFA on January 6, 2014. Id. at ¶ 12. DeMarco reverted to a Deputy Director position, and tendered his resignation from FHFA in late March 2014, to be effective at the end of April 2014.

iii. Issues Arise between Hornsby and Subordinate during Same Period

During this same time period, Hornsby alleges that he was beginning to lose confidence in one of his subordinates, Jeffrey Risinger ("Risinger"), the head of FHFA's Human Resources Unit. Id. at ¶ 14. According to Hornsby, he had initially supported Risinger after a retaliation complaint was brought against him by his subordinate, Marie Harte ("Harte"). Id. at ¶ 15. On Friday, April 25, 2014, Hornsby, in his capacity as FHFA's settlement officer for Equal Employment Opportunity (EEO) claims, attended a mediation session related to Harte's EEO complaint. Id. In this meeting, Hornsby came to believe that Risinger had lied to him about the issues raised in Harte's EEO complaint, and therefore decided to settle her complaint. Id.

iv. Risinger Reports that Hornsby Threatened DeMarco

The following Monday, April 28, 2014, Risinger reported to FHFA officials that Hornsby had made statements threatening DeMarco's life and physical safety. Id. Specifically, Risinger reported that Hornsby said, among other things: "I can understand how someone could go postal, [sic ] if I decide to take myself out will walk into Ed DeMarco's office and blow his brains out and then kill myself"; that he would shoot DeMarco in the kneecap and state "don't [expletive redacted] with me"; and that he would "rip [DeMarco] limb by limb from his office." Ex. B to Mot. to Dismiss [Dkt. No. 7–3 at p. 3–4].

Hornsby alleges that Risinger's report was "pure invention" and that he "never asserted any such threats." Complaint at ¶ 16. Instead, he alleges that Risinger fabricated these threats in retaliation for Hornsby's decision to settle Harte's EEO complaint against Risinger. Id. at ¶ 25.

v. Hornsby Is Placed on Administrative Leave

The same day as Risinger reported the purported threats, FHFA management placed Hornsby on administrative leave and had him immediately escorted from the building. Id. at ¶ 17; Ex. A to Mot. to Dismiss [Dkt. No. 7–2 at p. 2]. The letter placing him on administrative leave states that his administrative leave would last "until further notice," while the allegations against him were investigated, and that he would receive his usual pay and benefits while on leave. Id. [Dkt. No. 7–2 at p. 2–3].

Subsequently, agents from FHFA's Office of the Inspector General (OIG) interviewed Hornsby and then placed him under arrest. Complaint at ¶¶ 17, 18. Hornsby was initially charged with three felonies, Id. at ¶ 18, but the charges were later reduced to two misdemeanors. Id. at ¶ 20.

While he was awaiting trial, Hornsby received multiple settlement offers from FHFA, including from Watt directly. Id. at ¶¶ 19, 20. Though the terms of these offers are not specified in detail in the Complaint, Hornsby claims that FHFA offered him a "buy-out" and the dismissal of charges if he left the agency. Id. Hornsby was told that if he refused the settlement he would be terminated regardless of the outcome of the trial. Id.

vi. Hornsby Is Tried, Acquitted, and Thereafter Removed from Employment at FHFA

In November 2014, a bench trial was held in D.C. Superior Court on the two misdemeanor charges against Hornsby. Id. at ¶ 21. On November 20, 2014, Hornsby was acquitted of both charges. Id. Following his acquittal, Hornsby was not returned to regular duty at FHFA. Id. at ¶ 22.

Instead, on December 19, 2014, Watt issued a Notice of Proposal to Remove ("Proposal to Remove") Hornsby from his position as COO and from federal service. Id. ; Ex. B to Mot. to Dismiss [Dkt. No. 7–3 at p. 3–4]. In the Proposal to Remove Watt identifies a long list of incidents, from which he concluded Hornsby had engaged in "Conduct Unbecoming a Federal Manager." Ex. B to Mot. to Dismiss [Dkt. No. 7–3 at p. 3–6]. Among these incidents were the purported threats against DeMarco reported by Risinger. Id. In addition, the Proposal to Remove also included allegations of improper conduct made by employees other than Risinger. Id. The Proposal to Remove determined that Hornsby would remain on administrative leave. Id. [Dkt. No. 7–3 at p. 9]. Hornsby alleges that the charges in the Proposal to Remove "were untrue and twisted out of context" and "invented" by the investigators from FHFA's Office of General Counsel and OIG. Complaint ¶ 23.

On March 19, 2015, Watt issued a decision to remove Hornsby from his position as COO and from federal service, effective March 21, 2015. Complaint ¶ 24.

B. Procedural Background

Following his removal, Hornsby filed an appeal with the Merit Systems Protection Board ("MSPB"), arguing that his removal was a violation of civil service protections and an act of unlawful retaliation in violation of Title VII. Id. at ¶ 24. That appeal is still pending before the MSPB. Id.

On March 18, 2016, Hornsby filed his Complaint in this action, challenging only the failure to reinstate him from administrative leave following his acquittal and his proposed removal. [Dkt. No. 1]. Following the grant of an extension of time, the Government timely filed its Motion to Dismiss on June 23, 2016. [Dkt. No. 7]. Hornsby filed an Opposition on July 14, 2016. [Dkt. No. 9]. The Government filed its Reply on July 21, 2016. [Dkt. No. 10].

II. Standard of Review

Rule 12(b)(6) of the Federal Rules of Civil Procedure permits dismissal upon the "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b) (6). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state 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) (internal quotation marks and citations omitted). A claim is facially plausible when the pleaded facts "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Plausibility requires "more than a sheer possibility that a defendant has acted unlawfully," but it is not a "probability requirement." Id.

At the Rule 12(b) (6) stage, the court accepts all of the complaint's factual allegations as true and draws all reasonable inferences from those facts in plaintiff's favor. Browning v. Clinton , 292 F.3d at 242. However, the court does not accept "inferences drawn by plaintiff if such inferences are unsupported by the facts set out in the complaint." Id. (internal quotation marks and citations omitted). Similarly, the court need not accept plaintiff's...