Reed v. Chambersburg Area Sch. Dist. Found.

JASON J.A. REED, Plaintiff v. CHAMBERSBURG AREA SCHOOL DISTRICT FOUNDATION, Defendant

No. 1:13-cv-00644

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

Dated: March 17, 2014

(Judge Kane)

MEMORANDUM

Before the Court is Plaintiff Jason Reed's motion for a preliminary injunction (Doc. No. 79) and Defendant Chambersburg Area School District Foundation's motion to dismiss Plaintiff's third amended complaint (Doc. No. 83). For the reasons that follow, the Court will grant in part and deny in part Defendant's motion to dismiss, and will deny Plaintiff's motion for a preliminary injunction.

I. BACKGROUND¹

In 2005, Plaintiff, an African-American male, founded ReachUSA, Inc. ("REACH!"), a non-profit organization through which he created and staged various dance and performance works. (Doc. No. 78 ¶ 3.) In 2006, Plaintiff contracted to establish a REACH! chapter for the Chambersburg Area School District's Afterschool Program. (Id. ¶ 28.) Plaintiff would be paid $75.00 per hour once the Afterschool Program secured annual funding of around $25,000. (Id. ¶ 243.)

Plaintiff alleges that during his employment he was not paid on a regular basis, checks were written to him for payment to Caucasians, he was not allowed to see any of his time sheets,his pay was not properly reported to the IRS, and only he was required to discipline minority students. (Id. ¶ 102.) He also alleges that Jill McCollum, the "Afterschool Program director," directed racially discriminatory and stigmatizing remarks at him. (Id. ¶¶ 66, 140-41, 145.) He further alleges he agreed to a reduced pay of $25 an hour in the 2007-2008 school year after Defendant led him to believe the Afterschool Program had income of less than $25,000. (Id. ¶ 246.) During the following years, he was usually paid "$37.50 per hour or less, depending on the needs of Defendant and District." (Id. ¶ 248.) Around February 2011, he alleges that in retaliation for speaking up about discriminatory race and gender-based discrimination in the program, as well as about sexual solicitation of students by an employee and other issues, Defendant and the District terminated him on March 10, 2011. (Id. ¶¶ 175, 178.)

On July 17, 2012, Plaintiff registered the following five trademarks with the United States Patent and Trademark Office: REACH!, REACHUSA, C-BURG HYPE, LIL' HYPE, and SWAGG. (Id. ¶¶ 16-18.) Plaintiff alleges that Defendant continued to use his trademarks and trade dress without authorization. (Id. ¶¶ 86-88, 213-225.) He further alleges that, in May 2013, Defendant released 3,591 pages of records to the public, and this exposed his social security number. (Id. ¶ 163.) He also alleges that at this time he learned that a "disparagement log" had been created about him, and that the log was "publicly circulated with Defendant's acquiesence." (Id. ¶¶ 166-67.)

On March 11, 2013, Plaintiff filed a complaint against Defendants Chambersburg Area School District Foundation, Chambersburg Area School District, Joseph Padasak, and Jill McCollum. (Doc. No. 1.) He also filed a motion for a preliminary injunction, seeking access to timesheets and Afterschool Program audits, in addition to other injunctive relief. (Doc. No. 5.)In its memorandum and order filed June 17, 2013, the Court dismissed the majority of Plaintiff's complaint for failure to state a claim, but gave Plaintiff leave to amend his complaint in accordance with the Court's order. (Doc. No. 53.) On July 12, 2013, Plaintiff filed a second amended complaint, followed by a second motion for a preliminary injunction on August 6, 2013. (Doc. Nos. 60, 68.) Subsequently, Plaintiff signed a written settlement agreement with all Defendants other than the Chambersburg Area School District Foundation, and the Court dismissed those Defendants from the action on September 13, 2013. (Doc. Nos. 76, 77.) On September 27, 2013, Plaintiff filed his third amended complaint against the remaining Defendant, the Chambersburg Area School District Foundation. (Doc. No. 78.) The following day, Plaintiff filed a new motion for a preliminary injunction, seeking much of the same injunctive relief as the earlier motion, but also moved the Court to grant him additional relief, such as a name-clearing hearing. (Doc. No. 79.) On October 15, 2013, Defendant filed a motion to dismiss the third amended complaint. (Doc. No. 83.) The motions are fully briefed and ripe for disposition. Because resolution of Defendant's motion to dismiss affects disposition of Plaintiff's motion for a preliminary injunction, the Court will address the motion to dismiss first.

II. MOTION TO DISMISS

A. Legal Standard

A motion to dismiss filed pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). In reviewing a motion to dismiss, a court may "consider only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim." Lum v. Bank of Am., 361 F.3d 217, 221 n.3 (3d Cir. 2004). The motion will only be properly granted when,taking all factual allegations and inferences drawn therefrom as true, the moving party is entitled to judgment as a matter of law. Markowitz v. Ne. Land Co., 906 F.2d 100, 103 (3d Cir. 1990). The burden is on the moving party to show that no claim has been stated. Johnsrud v. Carter, 620 F.2d 29, 33 (3d Cir. 1980). Thus, the moving party must show that a plaintiff failed to "set forth sufficient information to outline the elements of his claim or to permit inferences to be drawn that those elements exist." Kost, 1 F.3d at 183 (citations omitted). A court, however, "need not credit a complaint's 'bald assertions' or 'legal conclusions' when deciding a motion to dismiss." Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906, 908 (3d Cir. 1997). Although satisfying the 12(b)(6) standard does not require "detailed factual allegations," there must be a "'showing,' rather than a blanket assertion of entitlement to relief. . . . '[F]actual allegations must be enough to raise a right to relief above the speculative level.'" Phillips v. Cnty. of Allegheny, 515 F.3d at 231-32 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Put otherwise, a civil complaint must "set out 'sufficient factual matter' to show that the claim is facially plausible." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Ashcroft v. Iqbal, 129 S. Ct. 1937, 1955 (2009)).

B. Respondeat superior

Defendant's primary argument in support of its motion to dismiss is that Plaintiff's complaint should be dismissed because "[a]ll of the counts of the Third Amended Complaint allege that [Defendant] Foundation is vicariously liable for the actions of McCollum, Padasak and the School District," all of whom have signed a written release agreement with Plaintiff. (Doc. No. 84 at 9.)

Many of Plaintiff's claims are under Pennsylvania law, and under Pennsylvania law,where there is a written settlement against a principal's agent, that extinguishes liability toward the principal. See Mamalis v. Atlas Van Lines, Inc., 560 A.2d 1380, 1383 (Pa. 1989). In response, Plaintiff insists he does not allege that Defendant and the settling parties had an agency relationship. (Doc. No. 86 at 6-10.) Although Defendant correctly points to portions of Plaintiff's complaint that do allege that the settled Defendants behaved as Defendant's agents at various times, at least in a limited capacity (See, e.g., Doc. No. 78 ¶ 31), the Court finds that most of Plaintiff's claims against Defendant are not pled on a respondeat superior theory. Defendant points, for example, to various paragraphs in the complaint where Plaintiff asserts the Defendant acted "in concert" with the District, but in the context of Plaintiff's complaint the Court reads the allegation of activity "in concert" as an allegation against joint tortfeasors rather than an allegation of principal-agent relationship. (See, e.g., id. ¶¶ 14, 51.) Moreover, Plaintiff frequently alleges that Defendant is primarily the cause of his harm. (See, e.g., id. ¶ 87.) Although Defendant insists that it never employed Plaintiff, never funded a new afterschool dance program and never used Plaintiff's trademarks, Plaintiff alleges otherwise and the Court must accept the facts in the complaint as true. See Markowitz, 906 F.2d at 103.

C. Constitutional claims

In his Third Amended Complaint, Plaintiff brings Equal Protection, Due Process, and First Amendment claims. As an initial matter, the Court notes that neither Plaintiff nor Defendant asserts that Monell v. N.Y. City Dep't of Soc. Servs., 436 U.S. 658 (1978) is the standard under which the Court must review Plaintiff's constitutional claims. Monell stands for the proposition that "a municipal corporation be held liable only for constitutional violations resulting from the municipality's official policy." City of Oklahoma City v. Tuttle, 471 U.S. 808,822 (1985). This is because principles of vicarious liability do not apply in the Section 1983 context. See Rode v. Dellarciprete, 845 F.2d 1195, 1207 (3d Cir. 1988) ("[A] defendant in a civil rights action must have personal involvement in the alleged wrongs; liability cannot be predicated solely on the operation of respondeat superior.") (citations omitted).

The sole remaining Defendant in this action is the Chambersburg Area School District Foundation, which Plaintiff avers "was established in or about 1990 by board members of the [District]." (Doc. No. 78 ¶ 12.) The Foundation was incorporated in 1994. (Id.) Plaintiff alleges Defendant Foundation is a corporation acting under color of state law. (Id. ¶ 99, 127-132.) That Defendant's agents allegedly violated Section 1983 would not impute liability to Defendant on normal vicarious liability principles; rather, the Court must assess Plaintiff's constitutional claims under the Monell framework. See, e.g., Austin v. Taylor, 604 F. Supp. 2d 685, 690 (D. Del. 2009...