Lang v. Patients Out of Time

689 F.Supp.3d 259

Van Duzer LANG, et al., Plaintiffs, v. PATIENTS OUT OF TIME, et al., Defendants.

Case No. 3:20-cv-00055

United States District Court, W.D. Virginia, Charlottesville Division

Signed September 1, 2023

Alan Silber, Keith David McDonald, Andrew Matthew Kuntz, Pro Hac Vice, Pashman Stein Walder Hayden, P.C., Hackensack, NJ, Bruce Robert Williamson, Jr., Lepold & Martin PLLC, Charlottesville, VA, for Plaintiffs.

David W. Thomas, Michie Hamlett Lowry Rasmussen & Tweel, Charlottesville, VA, Christopher Janszky, MichieHamlett PLLC, Charlottesville, VA, Dena B. Calo, Pro Hac Vice, Lisa Michelle Koblin, Pro Hac Vice, Saul Ewing LLP, Philadelphia, PA, Robert Courtney Gill, Saul Ewing LLP, Washington, DC, for Defendants Patients Out of Time, Mary Lynn Mathre, Michael Aldrich, Irvin Rosenfeld, Melanie Dreher, Dustin Sulak.

Dena B. Calo, Pro Hac Vice, Lisa Michelle Koblin, Pro Hac Vice, Saul Ewing LLP, Philadelphia, PA, Robert Courtney Gill, Saul Ewing LLP, Washington, DC, for Defendant Denis Petro.

Denis Petro, Catasauqua, PA, Pro Se.

MEMORANDUM OPINION AND ORDER

NORMAN K. MOON, SENIOR UNITED STATES DISTRICT JUDGE

Plaintiffs Jeanne Van Duzer Lang and Laramie Van Duzer Silber and Defendants Patients Out of Time, its unpaid directors, and Mary Lynn Mathre have filed cross motions for summary judgment. The Court will grant, in part, Defendants' motion for summary judgment, concluding that the Virginia Nonstock Corporation Act shields the unpaid directors from liability.¹ However, the Court will deny Defendants' motion on all other grounds. The Court will also grant, in part, Plaintiffs' motion for summary judgment, determining that, given the undisputed facts, Plaintiffs should succeed on their New Jersey Wage Payment Law claim as a matter of law. The Court will deny the rest of Plaintiffs' motion for summary judgment.

BACKGROUND

Patients Out of Time ("POT") is a nonprofit organization created "to educate all disciplines of health care professionals, and the public at large, about medical cannabis." Dkt. 1 (Ex. A) ¶ 4. Defendant Directors and Ms. Mathre were uncompensated members of the POT Board of Directors at all relevant times.² Plaintiff Laramie Van Duzer Silber was Chief Operating Officer ("COO") of POT from January 2015 through May 2019, Plaintiff Jeanne Van Duzer Lang was Chief of Staff during that period, and the POT Board of Directors approved their hiring. Dkt. 157 (Ex. A) at 47, 60-62, 67-68; id. (Ex. B); id. (Ex. C).

Plaintiffs and Defendant POT executed contracts governing the terms of Plaintiffs' employment;³ however, there is some dispute as to those terms.⁴ Nonetheless, it is agreed that the contracts called for Plaintiffs to submit monthly invoices. Dkt. 159 (Ex. 12); id. (Ex. 13). But Plaintiffs argue that the contracts "did not bar compensation for which invoices were not submitted." Dkt. 163 at 26. The parties further dispute whether Plaintiffs submitted these invoices monthly and whether all payments were made.⁵

Plaintiffs worked solely for POT between January 2015 and May 2019. Dkt. 157 (Ex. A) at 52, 107-08. They reported to Mathre about their work. Id. at 46-47, 109, 206-07. The parties, however, debate whether Mathre "controlled" Plaintiffs' work, though they agree that Mathre provided direction to Plaintiffs.⁶ Regardless, together, Mathre and Plaintiffs constituted POT's executive committee—an unofficial, informal body that governed the day-to-day operations of POT. Dkt. 157 (Ex. A) at 50-51, 63-64, 155-56.

In March 2019, Plaintiffs allegedly spoke to Mathre about law and public policy violations they believed Mathre and POT had committed. Id. (Ex. A) at 73; id. (Ex. F).⁷ Specifically, on March 12, 2019, Plaintiffs went to Tallahassee, Florida to meet Mathre and tell her they were resigning from POT, emphasizing their concerns about law and policy violations.⁸ As a result of this meeting, on April 27, 2019, Mathre emailed the POT Board a Memorandum from the Executive Committee and a Memorandum of Understanding ("MOU"). Id. (Ex. H); id. (Ex. I); id. (Ex. J). The Memorandum from the Executive Committee to the Board communicated details of the violations of state and federal law Plaintiffs alleged that POT had committed. Id. (Ex. H); id. (Ex. J). Meanwhile, the MOU put forward a process POT could follow to achieve compliance with existing laws.⁹ Dkt. 157 (Ex. I). Plaintiffs continued to work for POT after the March 12, 2019 meeting. Id. (Ex. D); id. (Ex. E); id. (Ex. M).

Mathre, however, eventually decided to terminate Plaintiffs' employment.¹⁰ She announced to the Board, by email on May 6, 2019, that terminating Plaintiffs' employment would be on the next board meeting's agenda. Dkt. 157 (Ex. N). In that email, Mathre wrote: "I did sign the [aforementioned] MOU after hours of discussion and under duress since Jeanne and Laramie had actually put in writing that we were out of compliance." Id. (Ex. M). Mathre also raised performance-related issues about them.¹¹ Plaintiffs, however, dispute this.¹² Nevertheless, on May 24, 2019, Mathre emailed Laramie: "your contract with [POT] is ended." Dkt. 157 (Ex. O). She also informed Jeanne, by letter dated May 25, 2019, that her "contract with [POT] is ended." Id. (Ex. P).

Shortly after Plaintiffs' dismissal, the Board received reports from Plaintiffs,¹³ a POT donor,¹⁴ and POT's counsel¹⁵ discussing POT's alleged noncompliance with state and federal law.¹⁶ But the Board itself did not take any action regarding Plaintiffs' termination. In any event, Plaintiffs contend that their employment ended in May 2019. Id. (Ex. O); id. (Ex. P).

STANDARD OF REVIEW

Summary judgment is appropriate where "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A dispute is genuine if a reasonable [fact finder] could return a verdict for the nonmoving party," and "[a] fact is material if it might affect the outcome of the suit under the governing law." Variety Stores, Inc. v. Wal-Mart Stores, Inc., 888 F.3d 651, 659 (4th Cir. 2018).

The moving party bears the burden of establishing that summary judgment is warranted. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party meets this burden, the nonmoving party must set forth specific, admissible facts to demonstrate a genuine issue of fact for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The non-movant may not rest on allegations in the pleadings; rather, it must present sufficient evidence such that a reasonable fact finder could find by a preponderance of the evidence for the non-movant. See Celotex Corp., 477 U.S. at 322-24, 106 S.Ct. 2548; Sylvia Dev. Corp. v. Calvert Cnty., Md., 48 F.3d 810, 818 (4th Cir. 1995). The district court must "view the evidence in the light most favorable to the nonmoving party" and "refrain from weighing the evidence or making credibility determinations." Variety Stores, Inc., 888 F.3d at 659.

When cross-motions for summary judgment are before a court, a court must "consider each motion separately on its own merits to determine whether either of the parties deserves judgment as a matter of law." Defs. of Wildlife v. N.C. DOT, 762 F.3d 374, 392 (4th Cir. 2014) (quoting Bacon v. City of Richmond, Va., 475 F.3d 633, 638 (4th Cir. 2007) (internal quotation marks omitted)).

ANALYSIS

I. New Jersey law applies to Plaintiffs' substantive claims. Implementing New Jersey Law, the Court will grant Plaintiffs' summary judgment motion as to the Wage Payment Law but deny both Plaintiffs' and Defendants' summary judgment motions as to the other substantive claims.

Like at the motion to dismiss stage, Dkt. 12 at 27-41, Defendants insist Virginia law should apply to Plaintiffs' substantive legal claims. Dkt. 159 at 14-20. Again, the Court will reject Defendants' argument, deeming it precluded by the law of the case doctrine. Then, reaching the merits of Plaintiffs' substantive claims, the Court will grant Plaintiffs' summary judgment motion as to the New Jersey Wage Payment Law but deny both Plaintiffs' and Defendants' summary judgment motions as to the other substantive claims.

a. The law of the case doctrine counsels that New Jersey law should continue to apply to Plaintiffs' Wage Payment Law ("WPL"), Conscientious Employee Protection Act ("CEPA"), and breach of contract claims.

While Defendants aver that Virginia law applies to Plaintiffs' substantive legal claims, it is significant that this Court already applied New Jersey law at the motion to dismiss stage. Dkt. 66 at 3-6. When a decision establishes "the law of the case," it "must [usually] be followed in all subsequent proceedings in the same case in the trial court or on a later appeal," unless one of three exceptions is met: "(1) a subsequent trial [or other proceeding] produces substantially different evidence, (2) controlling authority has since made a contrary decision of law applicable to the issue, or (3) the prior decision was clearly erroneous and would work manifest injustice." Sejman v. Warner-Lambert Co., 845 F.2d 66, 69 (4th Cir. 1988) (internal citation omitted); see also, e.g., TFWS, Inc. v. Franchot, 572 F.3d 186, 191 (4th Cir. 2009).

The Fourth Circuit has held:

The law-of-the-case doctrine recognizes that 'when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.' But it poses no bar to the assessment of past holdings based on a different procedural posture when, as is the case in the progression from review of a motion to dismiss to a motion for summary judgment, that later review expands the court's inquiry based on development of actual facts underlying a plaintiff's claims . . . . [T]he law of the case doctrine also acknowledges that different facts will lead to a different legal analysis to which the doctrine cannot apply.

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