HOLLY A. BRADY, District Judge.
This matter comes before the Court on Defendant's Motion to Dismiss (ECF No. 12). For the reasons set forth below, Plaintiff's Complaint for Damages will be dismissed pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim under Title VII of the Civil Rights Act of 1964 and Section 501 of the Rehabilitation Act of 1973.
The facts of this case, as alleged in Plaintiff's Complaint for Damages (ECF No. 3), are as follows. During the relevant time, Plaintiff was a canteen worker at the Department of Federal Affairs Canteen Services facility in Marion, Indiana. Starting on February 20, 2014, Plaintiff was granted four hundred and twenty hours of FMLA leave and began taking intermittent leaves of absence from work. Sometime in July of 2014, Plaintiff called to request leave and Defendant's management official responded, "what's wrong with you." From July 2014, through September 2014, Plaintiff took an extended period of continuous FLMA leave. By August 19, 2014, Plaintiff had exhausted his allotted FLMA leave.
On August 8, 2014, Defendant's Human Resource Specialist sent an email to the canteen chief at the Marion facility stating that Plaintiff had called and left a voice mail indicating that he wanted to resign. On October 3, 2014, the canteen chief sent a Return of Duty Letter to Plaintiff seeking clarification of Plaintiff's employment status and requesting that Plaintiff return to work immediately. Also on October 3, 2014, Plaintiff's union representative emailed the canteen chief to ask about Plaintiff's employment status and to communicate Plaintiff's desire to return to work. Defendant responded on March 3, 2015, by sending a letter to Plaintiff formally documenting Plaintiff's resignation and providing him with options for post-employment benefits.
On January 25, 2016, Plaintiff filed his formal complaint of discrimination with Defendant alleging he was subjected to harassment and a hostile work environment based on his disability and in reprisal for prior EEO activity. Defendant issued its Final Agency Decision on December 16, 2016. Plaintiff appealed the Final Agency Decision to the EEOC. However, on July 6, 2017, and before the EEOC issued its decision, Plaintiff filed a complaint in this Court under Cause No. 1:17-cv-280. Plaintiff moved to dismiss that cause without prejudice on January 22, 2016 (Cause No. 1:17-cv-280, ECF No. 25). In relevant part, Plaintiff's Motion to Dismiss Without Prejudice states that Plaintiff is seeking dismissal "in that he has not finalized the administrative process with defendant and . . . [t]he parties [sic] counsel have discussed said dismissal and Defendant has no objection." (Id.). Plaintiff's motion was granted on January 23, 2018.
The EEOC rendered its Decision on July 26, 2018, affirming the Final Agency Decision's determination that there was no discrimination. Thereafter, on October 9, 2018, Plaintiff filed his Complaint for Damages in the Grant County, Indiana, Circuit Court. (ECF No. 3). Defendant removed the action to this Court pursuant to 28 U.S.C. § 1442(a)(1). (ECF No. 1). Defendant filed its Motion to Dismiss (ECF No. 12) and Memorandum in Support (ECF No. 13) on February 4, 2019. Plaintiff filed his Response (ECF No. 14) on March 4, 2019. This matter is now ripe for review by the Court.
Defendant first asserts that this Court lacks subject matter jurisdiction over Plaintiff's claim. Defendant argues that the Grant Circuit Court lacked jurisdiction over the claim, and therefore this Court also lacks jurisdiction under the derivative jurisdiction doctrine. As set forth below, this Court concludes that the Grant Circuit Court did have jurisdiction over the claim. However, even if the Grant Circuit Court lacked jurisdiction, that would not create a jurisdictional bar here. Accordingly, this Court concludes that Defendant's subject matter jurisdiction argument should be rejected.
Fed. R. Civ. P. 12(b)(1) provides that a case will be dismissed if the court lacks the statutory authority to hear and decide the dispute. The standard of review for a Rule 12(b)(1) motion to dismiss depends on the purpose of the motion. See United Phosphorous, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003). If subject matter jurisdiction is not evident from the face of the complaint, a court must analyze the motion like any other motion to dismiss and assume for purposes of the motion that the allegations in the complaint are true. Where, as here, the complaint is formally sufficient, but the contention is that there is no subject matter jurisdiction, the movant may use affidavits and other materials to support the motion. The burden of proof on the Rule 12(b)(1) issue is on the party asserting jurisdiction. Id.
The enforcement provision of Title VII provides that "[e]ach United States district court and each United States court of a place subject to the jurisdiction of the United States shall have jurisdiction of actions brought under this subchapter." 42 U.S.C. § 2000e-5(f)(3). In Yellow Freight Sys., Inc. v. Donnelly, 494 U.S. 820 (1990), a unanimous Supreme Court interpreted this provision as providing for concurrent jurisdiction between state and federal courts over Title VII actions. Defendant acknowledges Yellow Freight but suggests that this Court should find exclusive jurisdiction in the federal courts for Title VII claims against federal employers, relying on Bullock v. Napolitano, 666 F.3d 281 (4th Cir. 2012). The Court declines Defendant's suggestion.
The issue on which the courts in Yellow Freight and Bullock diverge is how to interpret Congress' omission of any reference to state court jurisdiction in 42 U.S.C. § 2000e-5(f)(3). The Supreme Court in Yellow Freight determined that principles of federalism mandated a finding of concurrent jurisdiction unless Congress explicitly provided otherwise.
Yellow Freight, 494 U.S. at 823 (citations omitted). Accordingly, the Supreme Court found that the lack of reference to state court jurisdiction was "strong, and arguably sufficient, evidence that Congress" did not intend exclusive federal jurisdiction. Id. Although the Court noted that the legislative history was "persuasive" in showing an anticipation by Congress that Title VII cases would be handled by federal courts, the Court concluded that "such anticipation does not overcome the presumption of concurrent jurisdiction that lies at the core of our federal system." Id. at 826.
The Fourth Circuit took a conflicting position regarding the effect of Congressional silence in Bullock. While Yellow Freight concentrated on Congress' ability to divest state courts of jurisdiction, Bullock focused on the sovereign's ability to confer jurisdiction via its waiver of sovereign immunity. As stated by the Bullock court:
Bullock, 666 F.3d at 284 (parallel citations omitted). Thus, according to the Fourth Circuit, § 2000e-5(f)(3) requires a different interpretation where, as in Bullock, the defendant employer is the federal government. Noting this distinguishing factor, the Fourth Circuit stated that,
Id. at 285. With the "unequivocal waiver" missing from § 2000e-5(f)(3), the Fourth Circuit held that state courts lack subject matter jurisdiction over Title VII claims against federal employers. Id. at 286.
Unlike Yellow Freight, Bullock was not a unanimous opinion. Instead, Judge Gregory issued a lengthy dissent relying, in large part, on Yellow Freight. According to the dissent, it was important to understand the statutory framework under which a federal employee brings a Title VII action. The right of a federal employee to bring a Title VII action is found in 42 U.S.C. § 2000e-16. There, Congress provided that a federal employee "aggrieved by the final disposition of his complaint . . . may file a civil action as provided in section 2000e-5 of this title, in which civil action the head of the department, agency, or unit, as appropriate, shall be the defendant." 42 U.S.C. § 2000e-16(c). Furthermore, "[t]he provisions of section 2000e-5(f) through (k) of this title, as applicable, shall govern civil actions brought hereunder, and the same interest to compensate for delay in payment shall be available as in cases involving nonpublic parties." 42 U.S.C. § 2000e-16(d). Thus, as noted by the dissent, § 2000e-16 "provides that a federal employee may file a civil action in the same manner as private sector employees." Bullock, 666 F.3d at 288 (original emphasis). With the procedure the same, the dissent concluded that Yellow Freight must control.
Id. at 287 (original emphasis).
This Court finds the dissent in Bullock to have the more compelling argument. As the dissent points out, case law requiring the "unequivocal waiver" of sovereign immunity has never required the amount of specificity the Fourth Circuit would require under Bullock. Id. at 288. Instead, the cases cited by Bullock all address the waiver of what kind of claim can be brought, not where the claim can be brought.
In addition, this Court would note that courts have generally refused to make a distinction between private sector and federal employees in interpreting the scope of Title VII. See West v. Gibson, 527 U.S. 212 (1999) (compensatory damages available to federal employees); Rodriguez v. United States, 852 F.3d 67 (1st Cir. 2017) (safe harbor provision of §2000e-2(h) applies to federal employers); Forest v. U.S. Postal Serv., 97 F.3d 137 (6th Cir. 1996) (90-day limitations period applied to federal employee); Roy v. Runyon, 954 F.Supp. 368 (D. Me. 1997) (punitive damages available to federal employees notwithstanding sovereign immunity). Nothing in the language or reasoning of Yellow Freight indicates that the decision is intended to apply only to private sector employees. Accordingly, this Court sees no reason to part with the long-held judicial refusal to distinguish between classes of employees in the manner the Fourth Circuit has done.
Moreover, this Court believes that the Fourth Circuit has applied the "unequivocal waiver" canon too broadly. On this point, Gomez-Perez v. Potter, 553 U.S. 474 (2008), is instructive. There, the Supreme Court was tasked with determining whether the ADEA prohibits retaliation against a federal employee who complains of age discrimination. As it did here, the Government stated that its waiver of sovereign immunity must be "construed strictly," and since retaliation was not specifically listed among the acts giving rise to a claim the Government had not unequivocally waived its sovereign immunity against such claims. Id. at 490-91. The Supreme Court rejected the Government's position, noting that only the waiver need be strictly construed, not the statute as a whole.
Id. at 491 (citations omitted). Thus, in determining the scope of the sovereign immunity waiver, one must first identify that waiver.
For Title VII, the waiver provision is 42 U.S.C. § 2000e-16(c). As noted above, that section provides that a federal employee "aggrieved by the final disposition of his complaint . . . may file a civil action as provided in section 2000e-5 of this title, in which civil action the head of the department, agency, or unit, as appropriate, shall be the defendant." This waiver states what kind of action can be brought (appeals of a final disposition), against whom (the head of the department, agency, or unit), and how (as provided in section 2000e-5). To paraphrase Gomez-Perez, that § 2000e-16 references § 2000e-5 does not mean that § 2000e-5 must surmount the same high hurdle as § 2000e-16. The language of § 2000e-16(c), coupled with Yellow Freight, is sufficient for this Court to conclude that Congress intended for federal employees to bring an action in the same manner, and in the same jurisdictions, as private sector employees.
While courts must strictly construe waivers of sovereign immunity, they "must also be careful not to assume the authority to narrow the waiver that Congress intended or to construe the waiver unduly restrictively." Irwin v. Dep't. of Veterans Affairs, 498 U.S. 89, 94 (1990). As set forth above, this Court determines that the Fourth Circuit incorrectly assumed that authority. This Court concludes that the Grant Circuit Court had jurisdiction over Plaintiff's claims, and that Defendant's derivative jurisdiction claim must fail.
Even if this Court were to agree with the Fourth Circuit on the question of concurrent jurisdiction, it would nonetheless diverge from that court on the issue of whether exclusive federal jurisdiction required dismissal. That is because, to the extent the doctrine of derivative jurisdiction still exists in this Circuit, it survives in only the most academic sense.
The relevant authority is Judge Flaum's decision in Rodas v. Seidlin, 656 F.3d 610 (7th Cir. 2011). There, the Seventh Circuit was faced with the question of whether the derivative jurisdiction doctrine was a matter of subject matter jurisdiction, or whether it constitutes a "mere defect in the process by which a case reaches federal court." Id. at 621. After an extensive review of the authorities, the court found the latter.
Id. at 622-23 (citations omitted). This distinction is critical, the court held, because "subject matter jurisdiction is unyielding, and the earliest cases confirm that the doctrine of derivative jurisdiction is not." Id. at 623 (citations omitted). Stated another way, derivative jurisdiction can be waived by the parties, while subject matter jurisdiction may not.
For our purposes, the most important part of Rodas is the instructions to the district court on remand. The court instructed the district court to exercise jurisdiction over the matter, the lack of derivative jurisdiction notwithstanding. The court noted that subject matter jurisdiction over the case would have been proper had the matter been filed in the district court initially. Id. at 629. The court further noted that, relying on People of State of Ill. Ex rel. Barra v. Archer Daniels Midland Co., 704 F.2d 935, 939 (7th Cir. 1983), any defect in derivative jurisdiction can be cured by the filing of an amended complaint in the district court. Rodas, 656 F.3d at 629. As the Seventh Circuit stated in Barra, "[i]f that [amended] complaint properly invoked the jurisdiction of the federal court it is immaterial that the original complaint may not have stated a removable claim." Barra, 704 F.2d at 939.
Given the decision in Rodas, this Court cannot conceive of a situation where derivative jurisdiction would necessitate dismissal of Plaintiff's case with prejudice. Initially, the Court concludes that the procedural error in removal was created by the Government. When this matter was filed in the Grant Circuit Court, the Government had two options. The first option was to move to dismiss the case there for lack of subject matter jurisdiction, presenting the same Bullock-based argument it presented here. If it were successful, the dismissal would have been without prejudice, and would have carried no preclusive effect. Stocker v. Cataldi, 521 N.E.2d 716 (Ind. Ct. App. 1988). The second option was to do what it did: manufacture error by invoking removal under 28 U.S.C. § 1442(a)(1) and seek dismissal with prejudice under the derivative jurisdiction doctrine. This Court does not believe that the Government, having voluntarily brought the case to this Court, should be heard to object to the power of this Court to render judgment. See Baggs v. Martin, 179 U.S. 206, 208-09 (1900).
Perhaps more importantly, because derivative jurisdiction does not raise the question of subject matter jurisdiction, it cannot be ruled upon under Fed. R. Civ. P. 12(b)(1). Instead, at best, the doctrine can only be addressed under Rule 12(b)(6). Of course, dismissal under that Rule carries with it a presumed right to amend (Runnion ex rel. Runnion v. Girl Scouts of Greater Chi. and Nw. Ind., 786 F.3d 510, 519 (7th Cir. 2015)) which, as set forth in Barra, corrects the procedural defect in any event. Accordingly, derivative jurisdiction is, at best, a point-in-time issue, not a fatal flaw in a plaintiff's case. For these reasons, this Court denies Defendant's motion to dismiss under Fed. R. Civ. P. 12(b)(1).
Defendant next argues that Plaintiff's initial Complaint on July 6, 2017, short-circuited the EEOC process, and therefore Plaintiff has failed to exhaust his administrative remedies. The Court finds that neither the law nor the procedural history of this case supports the Defendant's argument, and therefore Defendant's motion on this basis is denied.
As Defendant notes, failure to exhaust claims are evaluated under Fed. R. Civ. P. 12(b)(6). Under Rule 12(b)(6), a claim must be dismissed when the plaintiff has failed to state a claim upon which relief can be granted. "Defendants must meet a high standard in order to have a complaint dismissed for failure to state a claim upon which relief may be granted since, in ruling on a motion to dismiss pursuant to Rule 12(b)(6) as well as Rule 12(b)(1), the court must construe the complaint's allegations in the light most favorable to the plaintiff." Thompson v. Ill. Dep't of Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002). Under a Rule 12(b)(6) standard, the court accepts all well-pleaded facts as true, views them in the light most favorable to the plaintiff, and accepts as true all reasonable inferences to be drawn from the complaint. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008). The court asks, "whether the complaint gives the defendant fair notice of what the suit is about and the grounds on which it rests." Mosely v. Bd. of Educ. of City of Chi., 434 F.3d 527, 533 (7th Cir. 2006). To prevail, the defendant "must demonstrate that the plaintiff's claim, as set forth by the complaint, is without legal consequence." Gomez v. Ill. State Bd. of Educ., 811 F.2d 1030, 1039 (7th Cir. 1987). Nevertheless, the complaint "must allege facts sufficiently setting forth the essential elements of the cause of action." Gray v. Cty. Of Dane, 854 F.2d 179, 182 (7th Cir. 1988).
Defendant relies on Williams v. Potter, 2008 WL 4449549 (N.D. Ind. 2008). In Williams, as here, the plaintiff initiated a federal lawsuit before the EEOC had completed its review of the final agency determination and prior to the 180-day time period for the EEOC to render its decision. Unlike the case at bar, the plaintiff in Williams also withdrew his EEOC appeal, resulting in the EEOC terminating its review of the appeal without rendering a decision on the merits. Id. at *1. After reviewing the applicable statutes and authorities, the court held that the plaintiff "failed to wait the statutorily prescribed time period between filing her appeal and filing her federal claim," and therefore did not exhaust her administrative remedies. Id. at *5. As a result, the claim was dismissed without prejudice under Fed. R. Civ. P. 12(b)(6).
The obvious distinction between Williams and the case at bar is the fact that, unlike in Williams, there is an EEOC decision from which Plaintiff appeals. Noting this distinction, Defendant points this Court to 29 C.F.R. § 1614.409 which provides,
The effect of this regulation, according to Defendant, is that "the EEOC had no authority to issue its Decision," and therefore "Plaintiff is attempting to proceed in district court without having received a final decision by the EEOC."
Because, as a matter of existential fact, there is a final EEOC decision in this case, Defendant must necessarily be arguing that § 1614.409 rendered the EEOC's decision a legal nullity. Defendant cites no authority for this position, and the Court finds the authorities to be conflicting. In support of Defendant's position is Tolbert v. United States, 916 F.2d 245 (5th Cir. 1990). Taking a "strict construction of the Title VII exhaustion requirement," the Fifth Circuit concluded that filing a federal action prior to the issuance of the EEOC decision, or the 180-day decision period, was a failure to exhaust administrative remedies and deprived the district court of jurisdiction. Id. at 249. On the other side of the argument is Brown v. Snow, 440 F.3d 1259 (11th Cir. 2006), a case disclosed to the Court by Defendant. There, the Eleventh Circuit held that the proper way to evaluate a failure to exhaust administrative remedies was to "discern from the record whether the complainant participated in the administrative process in good faith." Id. at 1264. Finding that the complainant did so participate, the court concluded that the "early filing did not prevent the EEOC from investigating his complaint for the full 180 days." Id. Accordingly, the court affirmed the district court's refusal to dismiss the complaint.
The Court concludes that Seventh Circuit authority more closely follows the logic of Brown. The Seventh Circuit examined the consequences of a premature filing in Hill v. Potter, 352 F.3d 1142 (7th Cir. 2003). The court first noted that Title VII does not authorize filing a complaint until the plaintiff has exhausted his administrative remedies. However, the court concluded that premature filing does not doom a claim.
Id. at 1145-46. This appears to be precisely what happened here. While the record does not reflect why Plaintiff "jumped the gun," it does appear that Defendant was not harmed by the premature filing; after all, Defendant consented to dismissal without prejudice. (Cause No. 1:17-cv-280, ECF No. 25). The dismissal of Plaintiff's prior claim was on his own voluntary motion. (Id.). This case, then, falls squarely into the hypothetical envisioned by Hill, making the outcome of Defendant's motion "obvious."
While Defendant is correct that none of the foregoing authorities directly address its § 1614.409 argument, this Court believes that Hill is sufficiently on point to govern the determination of Defendant's motion. Therefore, this Court denies Defendant's motion to dismiss for failure to exhaust administrative remedies.
Finally, Defendant asserts that Plaintiff failed to allege sufficient facts to state a claim.
The Court also notes that Plaintiff has failed to name the proper party defendant. Title VII requires that, in all cases brought by federal employees, "the head of the department, agency, or unit, as appropriate, shall be the defendant." 42 U.S.C. § 2000e-16(c). The head of the VA, not the VA itself, is the proper party defendant in this case. This is an independent ground to dismiss Plaintiff's claims under Rule 12(b)(6).
Having determined that Plaintiff's Complaint for Damages should be dismissed, the Court also determines that Plaintiff should have the opportunity to amend his complaint. Unless it is certain from the face of the complaint that any amendment would be futile or otherwise unwarranted, the district court should grant leave to amend after granting a motion to dismiss. Runnion, 786 F.3d at 519-20. In keeping with this authority, the Court will grant Plaintiff the opportunity to remedy the defects in his Complaint.
For the foregoing reasons, Defendant's Motion to Dismiss (ECF No. 12) is GRANTED under Fed. R. Civ. P. 12(b)(6) as Plaintiff has failed to state a claim upon which relief can be granted. Defendant's Motion is DENIED in all other respects. Plaintiff shall file an amended complaint within fourteen days of this Order.
SO ORDERED.
