Satterwhite v. All Starz Children's Acad., Inc.

BRENNA M. SATTERWHITE, Plaintiff, v. ALL STARZ CHILDREN'S ACADEMY, INC. and ALL STARZ CARY, INC., Defendants.

5:16-CV-141-FL

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION

February 14, 2017

MEMORANDUM AND RECOMMENDATION

This employment discrimination action comes before the court, in part, on the separate motions by defendants All Starz Children's Academy, Inc. ("All Starz Children's") (D.E. 19) and All Starz Cary, Inc. ("All Starz Cary") (D.E. 21) (collectively, "defendants" or "All Starz") to dismiss the complaint of plaintiff Brenna M. Satterwhite ("plaintiff") for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. All Starz Cary includes with its Rule 12(b)(6) motion a motion to dismiss for lack of subject matter jurisdiction, pursuant Rule 12(b)(1), that is also before the court. Plaintiff opposes the motions to dismiss and has filed a conditional motion (D.E. 26) for leave to amend her complaint. The various motions were referred to the undersigned magistrate judge for issuance of a memorandum and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B) (see Public D.E. dated 20 July 2016) and are ripe for adjudication.¹ For the reasons set forth below, it will be recommended that defendants' motions to dismiss be denied and plaintiff's conditional motion to amend be denied as moot.

BACKGROUND

In her complaint (D.E. 4-1 at pp. 6-14),² filed 26 February 2016 in Wake County (North Carolina) Superior Court, plaintiff alleges as follows:

On 21 April 2015, plaintiff applied for a position as an assistant teacher at All Starz. Compl. 7 ¶ 5. She was approximately five months pregnant. Id. at 7 ¶ 9. Joe Kugler, the owner of All Starz, hired plaintiff for the assistant teacher position on 5 May 2015. Id. at 7 ¶ 6.

Plaintiff began working as an assistant teacher on 27 May 2015 in a classroom with another teacher, Ms. Brooke, and a floater, Alexa. Id. at 7 ¶ 7. At the end of the day, Katie, the Director of All Starz, told plaintiff that everyone liked her and offered to assign her to Ms. Brooke's classroom, which plaintiff accepted. Id. at 7 ¶ 8.

On her second day of work, 28 May 2015, Ms. Brooke asked plaintiff if she was pregnant and plaintiff confirmed that she was. Id. at 7 ¶ 9. Plaintiff, then approximately six months pregnant, was showing outward signs of pregnancy. Id. at 7-8 ¶ 9.

The following day, 29 May 2015 (a Friday), Katie told plaintiff that there was no position available for her, but advised her to call back the following week to see if circumstances had changed. Id. at 8 ¶ 12. Joe Kugler had made the decision to terminate plaintiff at the urging of Ms. Brooke. Id. at 8 ¶ 15. When plaintiff called the following week, on 2 June 2015, Katie again told plaintiff that no position was available and offered to reimburse her for the nonreimburseable expenses she had incurred in the hiring process. Id. at 8 ¶ 14.

Despite telling plaintiff there were no open positions, All Starz had posted job openings on 26 May 2015 and 28 May 2015 and continued to do so after 29 May 2015 from 11 June2015 to 22 June 2015. Id. at 8-9 ¶ 16. A person who was not pregnant was hired for the position plaintiff had. Id. at 11 ¶ 30. Defendants' action against plaintiff was done with malice or reckless indifference to her federally protected rights. Id. at 10 ¶ 20.

Plaintiff alleges that she was terminated from All Starz on 29 May 2015 because of her pregnancy, or alternatively, that the actions taken against her amounted to a constructive discharge. Id. at 8 ¶ 15; 9 ¶ 17. She asserts a claim for sex and pregnancy discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (Title VII"). Id. at 10-11 ¶¶ 22 -34. Attached to her complaint are copies of a charge filed by her with the Equal Employment Opportunity Commission ("EEOC") naming only All Starz Children's, dated 21 June 2015 (id. at 13), and a "right-to-sue" letter from the EEOC, dated 10 December 2015 (id. at 14). Plaintiff seeks declaratory relief, back pay, other compensatory damages, punitive damages, attorneys' fees, and other relief. Id. at 11-12, prayer for relief ¶¶ 1-8.

Defendants removed the case to this court on 1 April 2016. See Notice of Removal (D.E. 4). They filed their dismissal motions on 6 May 2016. Defendants seek dismissal pursuant to Rule 12(b)(6) of not only plaintiff's Title VII claim itself but, alternatively, dismissal of her demands for punitive damages and emotional distress damages. In its motion under Rule 12(b)(1), All Starz Cary challenges subject matter jurisdiction on the grounds of failure by plaintiff to exhaust her administrative remedies before the EEOC.

Plaintiff filed her conditional motion for amendment under Rule 15(a) on 17 June 2016, contemporaneously with her response to defendants' motions. It seeks leave to file the proposed amended complaint (D.E. 26-2) submitted with the motion in the event the court finds the dismissal motions on plaintiff's claim meritorious.

ALL STARZ CARY'S CHALLENGE TO SUBJECT MATTER JURISDICTION

UNDER RULE 12(b)(1)

I. APPLICABLE LEGAL PRINCIPLES

A. Rule 12(b)(1) Standard of Review

Rule 12(b)(1) provides for dismissal of an action if the court lacks subject matter jurisdiction over it. Fed. R. Civ. P. 12(b)(1). The plaintiff bears the burden of showing federal jurisdiction. Richmond, Fredericksburg & Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991); West v. J.O. Stevenson, 164 F. Supp. 3d 751, 760 (E.D.N.C. 2016). A motion brought pursuant to this rule may contend either that the complaint fails to allege facts supporting a finding of subject matter jurisdiction or that the facts needed to establish jurisdiction do not exist. West, 164 F. Supp. 3d at 760. In the first instance, the facts in the complaint "'are assumed true, and the motion must be denied if the complaint alleges sufficient facts to invoke subject matter jurisdiction.'" Id. (quoting Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009)). In the second instance, "the district court is to regard the pleadings' allegations as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment." Richmond, Fredericksburg & Potomac R. Co., 945 F.2d at 768; see also Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999) (nonconversion of motion).

B. Exhaustion of Administrative Remedies under Title VII

To bring a federal suit under Title VII, a plaintiff must first exhaust the administrative procedures set forth in 42 U.S.C. § 2000e-5(b). See Davis v. N.C. Dep't of Corr., 48 F.3d 134, 137 (4th Cir. 1995). A plaintiff's failure to allege facts showing that the administrative prerequisites have been met or to attach an EEOC right-to-sue letter to the complaint subjects it to dismissal for lack of subject matter jurisdiction. See id. at 137-38, 140 ("We have long heldthat receipt of, or at least entitlement to, a right-to-sue letter is a jurisdictional prerequisite that must be alleged in a plaintiff's complaint.").

"Under Title VII . . . , a civil action may be brought only 'against the respondent named in the [EEOC] charge.'" Causey v. Balog, 162 F.3d 795, 800 (4th Cir. 1998) (quoting 42 U.S.C. § 2000e-5(f)(1)); Leuenberger v. Spicer, No. 5:15-CV-00036, 2016 WL 355090, at *5 (W.D. Va. 28 Jan. 2016) ("[A] court usually has jurisdiction over only those claims made against parties named in the charge."). "The naming requirement serves two purposes, and is not a mere technicality: 'First, it notifies the charged party of the asserted violation. Secondly, it brings the charged party before the EEOC and permits effectuation of the [Civil Rights] Act's primary goal, the securing of voluntary compliance with the law.'" Alvarado v. Bd of Trs. of Montgomery Cmty. Coll., 848 F.2d 457, 458-59 (4th Cir. 1988) (quoting Bowe v. Colgate-Palmolive Co., 416 F.2d 711, 719 (7th Cir. 1969)).

However, courts have also recognized that "Title VII does not require procedural exactness from lay complainants." Id. at 460 ("EEOC charges must be construed with utmost liberality since they are made by those unschooled in the technicalities of formal pleading."); Ross v. Franklin Cty. Dep't of Soc. Servs., 186 F. Supp. 3d 526, 530-31 (W.D. Va. 2016) ("[B]ecause a charge of discrimination is generally completed by a lay person, 'courts routinely construe this naming requirement liberally.'" (quoting Kouri v. Todd, 743 F. Supp. 448, 451 (E.D. Va. 1990)); Glover v. Univ. Vill. at Salisbury, LLC, Civ. No. JKB-14-1801, 2015 WL 854834, at *2 (D. Md. 25 Feb. 2015) ("[T]he naming requirement 'is not applied in a hyper-technical fashion.'" (quoting Kronk v. Carroll Cnty., Md., Civ. No. L-11-277, 2012 WL 245059, at *5 (D. Md. 25 Jan. 2012)).

After noting that the goals of the naming requirement had not been thwarted, the Fourth Circuit in Alvarado held that the plaintiff's Title VII suit could proceed against the board of trustees of the college where he worked, the suable entity under state law, even though he had named the college itself as his employer in his EEOC charge. 848 F.2d at 460. The court concluded that "the board of trustees is identical with the college," id. at 461, and that "[i]t is not reasonable to have expected [plaintiff] to know that Maryland statutes provide that the board of trustees of the college is the appropriate entity to 'sue and be sued,'" id. at 460.

In addition, courts have applied the so-called "substantial identity exception" to the naming requirement when a defendant in a Title VII suit not named in the EEOC charge is substantially identical—not necessarily actually identical as in Alvarado—to an entity that is named. See, e.g., Fontell v. MCGEO UFCW Local 1994, No. AW-09-2526, 2010 WL 3086498, at *5 (D. Md. 6 Aug. 2010). Under this exception, courts consider four factors:

(1) Whether the role of the unnamed part

...