KEITH P. ELLISON, District Judge.
Before the Court is Defendants' Motion to Dismiss First Amended Complaint ("Motion"). (Doc. No. 32.) After considering the Motion, all responses and replies thereto, and the applicable law, the Court concludes that the Motion should be
The Equal Employment Opportunity Commission ("EEOC") brings this discrimination action against Bass Pro Outdoor World, LLC ("BPOW"), Tracker Marine, LLC ("Tracker"), and Bass Pro, Inc. ("BPI") (collectively, "Defendants") pursuant to Title VII of the Civil Rights Act of 1964 as amended, and Title I of the Civil Rights Act of 1991 ("Title VII"). (Doc. No. 23, Am. Compl. ¶¶ 3-4.) According to
The EEOC asserts that Defendants also have a nationwide standard operating procedure of discouraging the hiring of Black applicants for several positions because of their race. (Id.) The EEOC offers four examples of alleged incidents exemplifying Defendants' discriminatory practice. (Id.) First, in or around the summer of 2006, a recently hired Human Resources Manager interviewed a qualified Black applicant for a position at a store in Louisiana. (Id.) An Assistant General Manager, who had participated in that store's hiring decisions for three years, told the Human Resources Manager that the candidate "really doesn't fit our profile." (Id.) When the Human Resources Manager asked for an explanation, the Assistant General Manager replied, "We don't hire niggers
Additionally, the EEOC avers, Defendants have denied employment to Hispanic applicants for hourly and salaried positions at their retail stores nationwide because of national origin. (Id. ¶ 11.) The EEOC claims that Defendants hire Hispanic applicants at rates far below their availability in the relevant labor pools. (Id.) For example, Defendants have proffered data showing that of approximately 892 managers at their retail stores, only 33 were Hispanic. (Id.) The EEOC asserts that Defendants' practice is nation-wide, as shown through several examples of alleged discriminatory actions. (Id.) In 2005, in addition to directing a Human Resources Manager to "hire some white people," the General Manager of the Katy, Texas store frequently used the words "wetback," "Pedro," and "Mexican" to refer to people of Hispanic origin. (Id.) In late 2008, a Lead employee at the Clarksville, Indiana store stated, "Hispanics should be shot at the border by the border patrol." (Id.) A Lead employee at the Destin, Florida store
The EEOC further claims that Defendants have, on a nationwide basis, unlawfully retaliated against employees who opposed practices that they reasonably perceived to violate Title VII. (Id. ¶ 15.) According to the EEOC, Defendants' retaliatory acts against such employees have included: altering the terms, conditions, or privileges of their employment; bringing false allegations against them; pressuring them to withdraw their complaints; subjecting them to heightened scrutiny; and firing them or inducing their resignations. (Id.) The EEOC offers two examples of alleged retaliatory acts by Defendants. (Id.) First, in May 2008, a managerial employee at the Spanish Fort, Alabama store complained to a Regional Human Resources Manager that the store General Manager was discriminating against female employees. (Id.) When the store General Manager heard about the complaint, he told his subordinate that she "better not complain about him again." (Id.) Later, the store Human Resources Manager fired the employee, explaining that the store General Manager had ordered her termination. (Id.) A manager in the Clarksville, Indiana store stated that Defendants' corporate officer permitted a store manager and Human Resources manager to listen to Defendants' anonymous discrimination hotline. (Id.) On one occasion, Defendants fired an employee in Clarksville, Indiana because she had a voice that sounded like one of the hotline callers. (Id.)
The consequence of these practices, the EEOC insists, has been to deprive Black and Hispanic applicants of equal employment opportunities and to otherwise adversely affect their status as applicants because of their race or national origin. (Id. ¶ 16.) Additionally, the EEOC avers, these practices have deprived employees of equal employment opportunities and otherwise adversely affected their status as employees because of their complaints or other activity protected by Title VII. (Id.) The EEOC also accuses Defendants of failing to preserve records relevant to the determination of whether unlawful employment practices have been or are being committed, in violation of Section 709(c) of Title VII, 42 U.S.C. § 2000e-8(c). (Id. ¶ 17.) Such records allegedly include: relevant employment applications and personnel files, tests administered to applicants, lists of job candidates, and electronic messages and audio and documentary records of efforts to contact the corporate complaint center. (Id.) For example, the EEOC claims that, after receiving notice of the Commissioner Charge which underlies this action, Defendants allowed the destruction of hotline recordings containing discrimination complaints. (Id.) The EEOC contends that the Defendants' unlawful employment practices were intentional and were done with malice or with reckless indifference to the federally protected rights of Black and Hispanic employee and applicants, as well as the federally protected
Defendants filed this Motion (Doc. No. 32), to which the EEOC filed a Response (Doc. No. 45). Defendants filed a Reply (Doc. No. 52).
"To survive a Rule 12(b)(6) motion to dismiss, a complaint `does not need detailed factual allegations,' but must provide the plaintiff's grounds for entitlement to relief-including factual allegations that when assumed to be true `raise a right to relief above the speculative level.'" Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). That is, "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, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). A claim has facial plausibility "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). The plausibility standard is not akin to a "probability requirement," but asks for more than a sheer possibility that a defendant has acted unlawfully. Id. A pleading need not contain detailed factual allegations, but must set forth more than "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citation omitted).
Ultimately, the question for the court to decide is whether the complaint states a valid claim when viewed in the light most favorable to the plaintiff. The court must accept well-pleaded facts as true, but legal conclusions are not entitled to the same assumption of truth. Iqbal, 129 S.Ct. at 1950 (citation omitted). The court should not "`strain to find inferences favorable to the plaintiffs'" or "accept `conclusory allegations, unwarranted deductions, or legal conclusions.'" R2 Investments LDC v. Phillips, 401 F.3d 638, 642 (5th Cir.2005) (quoting Southland Sec. Corp. v. INSpire Ins. Solutions, Inc., 365 F.3d 353, 362 (5th Cir.2004)).
"Absent a rule or statute to the contrary, ... a federal court [may] exercise jurisdiction over only those defendants who are subject to the jurisdiction of courts of the state in which the court sits." Point Landing, Inc. v. Omni Capital International, Ltd., 795 F.2d 415, 419 (5th Cir.1986), aff'd sub nom. Omni Capital International, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987). Because the Texas long-arm statute, Tex. Civ. Prac. & Rem.Code Ann. §§ 17.041-17.045, is coterminous with the Due Process Clause of the Fourteenth Amendment to the United States Constitution, the Court's constitutional due process inquiry into personal jurisdiction also serves as an inquiry into personal jurisdiction under the Texas long-arm statute. Command — Aire Corp. v. Ontario Mechanical Sales and Service Inc., 963 F.2d 90, 93-94 (5th Cir.1992).
To comport with constitutional due process, a plaintiff must show that: (1) defendants purposefully availed themselves of the benefits and protections of Texas law, thereby establishing "minimum contacts" with Texas such that defendants could reasonably have anticipated being haled into court there; and (2) under the circumstances, the exercise of personal jurisdiction "does not offend traditional notions
Specific jurisdiction exists "[w]hen a nonresident defendant has purposefully directed its activities at the forum state and the litigation results from alleged injuries that arise out of or relate to those activities." Id. (citation omitted). "The non-resident's purposefully directed activities in the forum must be such that he could reasonably anticipate being haled into court in the forum state." Clemens v. McNamee, 615 F.3d 374, 378 (5th Cir.2010) (citing Burger King, 471 U.S. at 474, 105 S.Ct. 2174). See also Choice Healthcare, Inc. v. Kaiser Foundation Health Plan of Colo., 615 F.3d 364, 369 (5th Cir.2010) ("The `purposeful availment' element ensures that a defendant will not be haled into court in a jurisdiction solely as a result of random, fortuitous, or attenuated contacts or the unilateral activity of another person or third party."). Further, specific jurisdiction "requires a sufficient nexus between the non-resident's contacts with the forum and the cause of action." Clemens, 615 F.3d at 378-79. Indeed, the non-resident defendant must purposefully avail herself of the privilege of conducting activities in the forum state. Id. at 379. For example, in the case of a company, relevant factors in finding specific jurisdiction would be a "regular ... flow" or "regular course" of sales, or "something more," such as "special state-related design, advertising, advice, marketing," or a "specific effort" to sell in the state. McIntyre Machinery, Ltd. v. Nicastro, ___ U.S. ___, ___, 131 S.Ct. 2780, 2792, 180 L.Ed.2d 765 (2011) (Breyer, J., concurring) (quotations omitted).
Unlike specific jurisdiction, general jurisdiction can be exercised when a defendant's contacts with the forum state are substantial, continuous, and systematic, though unrelated to the litigation. Cent. Freight Lines, Inc., 322 F.3d at 381. To determine general jurisdiction, a court views all of the defendant's contacts "over a reasonable number of years, up to the date the suit was filed." Access Telecom, Inc. v. MCI Telecomms. Corp., 197 F.3d 694, 717 (5th Cir.1999). The "continuous and systematic contacts test is a difficult one to meet, requiring extensive contacts between a defendant and a forum." Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir.2008).
While the party seeking to invoke the power of the court bears the burden of proving that jurisdiction exists, a prima facie showing suffices, and the plaintiffs need not establish jurisdiction by a preponderance of the evidence. Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir.2006). Moreover, "the Court must resolve all undisputed facts submitted by the plaintiff, as well as all facts contested in the affidavits, in favor of jurisdiction." Id. (citing Wyatt v. Kaplan, 686 F.2d 276, 280 (5th Cir.1982)). "`The court may determine the jurisdictional issue by receiving affidavits, interrogatories, depositions, oral testimony, or any combination
The Court concludes that the EEOC has failed to state a claim for a pattern or practice of discrimination. Likewise, the EEOC's retaliation claim cannot survive the Motion to Dismiss. The Court agrees with Defendants that the EEOC may not bring a pattern or practice claim pursuant to § 706. A 300-day limitations period applies to claims brought pursuant to § 706 or § 707; therefore, claims for failure to hire falling outside of that time period must be dismissed. The EEOC has adequately pleaded a record-keeping violation and that conditions precedent to the lawsuit have been met. The Court must defer its decision as to whether it has personal jurisdiction over BPI until the EEOC submits supplemental briefing. Finally, the Court finds that it should not dismiss BPI and Tracker on the grounds of failure to exhaust. The EEOC is granted leave to file a Second Amended Complaint within 21 days of the date of this Memorandum and Order.
In their Motion, Defendants urge the Court to dismiss all claims against them. First, Defendants explain that that § 706
According to Defendants, the Amended Complaint fails to state a § 707 pattern or practice claim. (Id. at 13.) Defendants insist that the EEOC-despite conducting a three-year investigation-does not identify a specific, objectively verifiable company-wide policy or practice of discrimination. (Id.) Instead, Defendants aver, the EEOC
Next, Defendants assert that the Amended Complaint fails to state a § 706 claim because it does not identify any alleged claimants, state what claims the individual claimants are asserting, or provide the factual basis for those claims. (Id. at 22.) Defendants accuse the EEOC of attempting, impermissibly, to bring a pattern or practice claim pursuant to § 706 so that it can recover compensatory and punitive damages based on an Int'l Bhd. of Teamsters v. U.S., 431 U.S. 324, 336, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977), model. (Id. at 24.) Reading the EEOC's draft Proposed Discovery Plan and Case Management Order (Ex. C to Mot. Dismiss), Defendants discern that the EEOC is attempting to present its § 707 pattern or practice claim to a jury, when only § 706 provides for a jury trial. (Id.) Additionally, Defendants believe that the EEOC plans to bifurcate the proceeding, such that one jury would determine the existence of a pattern or practice and class-wide punitive damages, and multiple other juries would decide individual liability and compensatory damages. (Id.) According to Defendants, such a bifurcation would violate both the Seventh Amendment and the Due Process Clause. (Id.) Defendants oppose the EEOC's attempt to merge § 706 and § 707 into a single, non-existent "hybrid" claim. (Id. at 27.)
Defendants also assert that the EEOC's conclusory statement that it has satisfied all conditions precedent to the lawsuit is insufficient under Iqbal. (Id. at 28.) Defendants submit that pre-Iqbal Fifth Circuit precedent, holding that general averments such as the EEOC's satisfy Rule 9(c), is no longer controlling law. (Id. at 29.) Defendants argue that the Amended Complaint fails to state a record-keeping claim. (Id.) According to Defendants, the EEOC's claims must further be dismissed to the extent they concern actions that occurred outside of the limitations period. (Id. at 30.)
Defendants insist that BPI should be dismissed for lack of personal jurisdiction. (Id. at 31.) Specifically, Defendants explain that the EEOC's claims against BPI must be dismissed because the EEOC has failed to overcome the presumption that that a subsidiary's employees are not the employees of the parent company for the purposes of specific jurisdiction. (Id. at 32.) Nor is there general jurisdiction over BPI, Defendants contend. (Id.) Finally, Defendants urge that the EEOC's claims against BPI and Tracker are barred because the EEOC failed to exhaust its administrative remedies-as their names were not included in the Original Charge (Ex. A to Mot. Dismiss) or in the Amended Charge (Ex. B to Mot. Dismiss).
In its Response, the EEOC insists that it has met its burden of citing the specific adverse employment action challenged, the nature of the discrimination, and the time period involved. (Resp. to Mot. Dismiss at 7.) Specifically, the EEOC states that it has met its burden by: alleging an adverse employment action, alleging a nationwide standard operating procedure, providing direct evidence that hiring was tainted by discriminatory animus, specifying the job titles affected by discriminatory hiring practices, explaining the time period involved, and setting forth the nature of the hiring discrimination. (Id. at 8-10.) The EEOC avers that, together, these facts are sufficient to state a claim. (Id. at 10.) Indeed, the EEOC emphasizes, it is not required to provide summary-judgment-type evidence, such as statistical or other evidence needed to make a prima facie case, at the Motion to Dismiss stage. (Id. at 11.)
The EEOC insists that it can invoke the Teamsters model of proof to establish a pattern or practice of hiring discrimination under either § 706 or § 707. (Id. at 12.) The EEOC points out that the language of § 706 does not circumscribe the EEOC's enforcement authority to only individual disparate treatment claims. (Id. at 13.) The EEOC avers that numerous cases have confirmed that it can bring pattern or practice claims under § 706. (Id.) In fact, the EEOC insists, every private class action case using the pattern-or-practice framework of proof is a § 706 case. (Id. at 13-14.) According to the EEOC, any doubt that it has the ability to pursue a class claim under § 706 was put to rest by General Telephone Co. of the Northwest v. EEOC, 446 U.S. 318, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980), and EEOC v. Monarch Machine Tool Co., 737 F.2d 1444, 1449 n. 3 (6th Cir.1980). (Id. at 15-16.) The EEOC emphasizes that, after remand, the EEOC, still proceeding under § 706, went on to try the General Telephone case using the Teamsters model of proof. (Id.) The EEOC accuses Defendants of conflating proof models with causes of action. (Id. at 16.) Indeed, the EEOC observes, it does not allege a violation of § 706 or § 707 — which constitute Title VII's enforcement provisions — but rather a violation of § 703, 42 U.S.C. § 2000e-2. (Id.)
The EEOC urges that there is no language in § 707 that limits its suit authority under § 706. (Id. at 17.) Sections 706 and 707 are not mutually exclusive, the EEOC avers, and furthermore Title VII should be construed liberally in the EEOC's favor. (Id. at 18.) Likewise, the EEOC contends that it is empowered to seek compensatory and punitive damages in a pattern or practice case under § 706. (Id. at 18-19.) The EEOC goes on to insist: "It is consistent with principles of statutory interpretation to assume that Congress understood when it added the enhanced damages provisions to actions brought under Section 706, that Section 706(f)(1) provided the EEOC with the authority to pursue a discrimination claim under any method of proof, and that authorizing damages under Section 706 was sufficient to ensure that the EEOC could seek such damages when it sought to challenge a pattern or practice of discrimination." (Id. at 19.) The EEOC contends that Defendants' view — that the EEOC cannot seek enhanced damages in cases involving a pattern or practice of discrimination
The EEOC asserts that its Amended Complaint pleads sufficient facts to state a class retaliation claim under Title VII. (Id. at 21.) Citing to Seventh Circuit authority, the EEOC claims that its allegations are sufficient because they state that Defendants retaliated by altering the terms, conditions, or privileges of the victims' employment; bringing false allegations against them; pressuring them to withdraw their complaints; subjecting them to heightened scrutiny; and firing them or inducing their resignations, on a nationwide basis. (Id. (citing EEOC v. Concentra Health Servs., 496 F.3d 773, 781-82 (7th Cir.2007)).) Furthermore, the EEOC argues that it does not need to name all class members in its Amended Complaint. (Id. at 22.) The EEOC also believes that it has succeeded in stating a record-keeping violation claim. (Id. at 24.) The EEOC complains that it cannot identify, at this time, how and why the records were destroyed. (Id.) Pursuant to Fifth Circuit authority, the EEOC asserts that it is additionally not required to specifically plead how all conditions precedent to filing the suit have been fulfilled. (Id. at 25.)
The EEOC urges that its pattern or practice claims are not limited to the 300-day period preceding the underlying charge of discrimination, as Defendants allege. (Id. at 26.) Rather, the EEOC contends that the period does not apply because it has alleged that Defendants' pattern or practice of hiring discrimination constitutes a continuing violation extending beyond the 300-day period. (Id.) Indeed, the EEOC suggests that this Court should not decide whether the continuing violation doctrine is applicable at the Motion to Dismiss stage. (Id. at 27.) Additionally, the EEOC avers, § 707 does not contain a 300-day limitation. (Id. at 28-29.)
Lastly, the EEOC contends that BPI and Tracker should not be dismissed. (Id. at 29.) According to the EEOC, it has sufficiently pleaded that Defendants are an integrated enterprise, precluding dismissal of BPI for lack of personal jurisdiction. (Id.) Likewise, the EEOC claims that it has exhausted its administrative remedies with regard to all Defendants because of the integrated enterprise principle. (Id. at 33.) The EEOC believes that it has met this burden by pleading that: BPI owns BPOW and Tracker, which is a subsidiary of BPI; Defendants are officers, directors, and/or members, and share the same business address; Defendants hire employees through a common, shared process, including a uniform application for some positions; and BPOW listed itself, BPI, and Tracker as parties with a financial interest in the outcome of this litigation. (Id. at 30.) The EEOC also points out that the three Defendants are currently represented by the same counsel. (Id.) As questions relating to jurisdiction are inextricably intertwined with the merits, the EEOC asserts, jurisdictional questions should be deferred until after discovery. (Id. at 30-31.) In closing, the EEOC requests that if its Amended Complaint is found to be deficient in any respect, it be granted leave to amend. (Id. at 35.)
In their Reply, Defendants insist that Plaintiffs have failed to state specific facts that plausibly suggest "that Bass Pro had a centralized policy that caused every challenged hiring decision made by every manager at every Bass Pro store over more than seven years to be presumptively infected with discriminatory bias
According to Defendants, the EEOC cannot bring its pattern or practice claims in a § 706 class action. (Id. at 5.) To so argue, Defendants contend, is to render § 707 superfluous, in contravention of established principles of statutory construction. (Id.) Indeed, Defendants assert, the legislative history of the Civil Rights Act of 1991 supports the logical conclusion that the distinction between § 706 and § 707 was intentional. (Id. at 6.) Defendants insist that General Telephone does not stand for the proposition that the EEOC can bring a class action under § 706 using the Teamsters method of proof; in fact, Defendants emphasize, General Telephone does not even mention Teamsters. (Id. at 7.) Consequently, Defendants aver that the EEOC's retaliation claims under § 706 must fail because the EEOC has not satisfied the preconditions to suit or alleged sufficient facts in the Amended Complaint to plausibly suggest individual retaliation claims. (Id. at 10.)
Defendants contend that the EEOC's assertion that no charge-filing period applies to § 707 claims is contradicted by the statute. (Id.) Additionally, Defendants point out, the EEOC has failed to explain why it should enjoy such a privilege when proceeding under § 706. (Id. at 11.) According to Defendants, the continuing violation doctrine does not change the limitations period because the EEOC alleges discrete acts. (Id. at 12.) Defendants go on to insist that the EEOC has failed to show that this Court has jurisdiction over BPI. (Id. at 13-14.) Indeed, Defendants assert, the EEOC's conclusory allegations in its Amended Complaint are insufficient to establish this Court's jurisdiction. (Id. at 14.) In closing, Defendants contend that the EEOC has failed to exhaust administrative remedies as to BPI and Tracker because the identity of interest exception is designed to protect plaintiffs unfamiliar with Title VII law — not the EEOC. (Id. at 15.) Furthermore, Defendants aver, the EEOC has not established facts to show an integrated enterprise. (Id.)
"Under § 707, the EEOC may investigate and act on a charge of a pattern or practice of discrimination, whether filed by or on behalf of a person claiming to be aggrieved or by a member of the Commission." EEOC v. Princeton Healthcare System, No. 10-4126(PGS), 2012 WL 1623870, at *16 (D.N.J. May 9, 2012) (citing 42 U.S.C. § 2000e-6(a)-(e)). "In order to establish a pattern or practice of discriminatory treatment under § 707, a plaintiff must show `more than the mere occurrence of isolated or accidental or sporadic discriminatory acts.'" EEOC v. Global Horizons, Inc., No. 11-00257 DAE-RLP, 860 F.Supp.2d 1172, 1191, 2012 WL
"`Pattern-or-practice cases differ significantly from the far more common cases involving one or more claims of individualized discrimination,' and proceed under a different burden shifting framework than the traditional McDonnell Douglas [Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973)] framework applicable to individual claims." EEOC v. JBS USA, LLC, No. 10-cv-02103-PAB-KLM, 2011 WL 3471080, at *2 (D.Colo. Aug. 8, 2011) (quoting Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1106 (10th Cir.2001)). "In a pattern or practice claim, the EEOC must first establish a prima facie case of pattern or practice by `demonstrat[ing] that unlawful discrimination has been a regular procedure or policy followed by an employer or group of employers.'" Id. (quoting Teamsters, 431 U.S. at 360, 97 S.Ct. 1843). "If the plaintiff carries this burden, the employer may defend against liability by challenging plaintiff's proof or providing nondiscriminatory explanations for the procedure." Id. (citing Teamsters, 431 U.S. at 360-61, 97 S.Ct. 1843). "If the employer fails to carry this burden, `a trial court may then conclude that a violation has occurred and determine' whether prospective relief is appropriate on a class wide basis." Id. (quoting Teamsters, 431 U.S. at 361, 97 S.Ct. 1843).
However, some district courts have explained that, at the motion to dismiss stage, "[s]pecific facts are unnecessary; the complaint need only provide a short and plain statement giving [the defendant] notice of the nature and basis of the claim." EEOC v. Scrub, Inc., No. 09 C 4228, 2009 WL 3458530, at *1 (N.D.Ill. Oct. 26, 2009) (citing Fed.R.Civ.P. 8(a)(2); Twombly, 550 U.S. at 555, 127 S.Ct. 1955). According to these courts, "even after Twombly, an employment discrimination plaintiff is not required to plead specific facts but may rely on notice pleading requirements." EEOC v. Propak Logistics, Inc., No. 1:09cv311, 2010 WL 3081339, at *5 (W.D.N.C. Aug. 6, 2010) (citing Boykin v. KeyCorp, 521 F.3d 202, 212-15 (2d Cir. 2008)). This line of cases emphasizes that "`[t]he Twombly Court made clear that its holding did not contradict the Swierkiewicz [v. Sorema N.A., 534 U.S. 506, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002)] rule that a complaint in an employment discrimination lawsuit [need] not contain specific facts establishing a prima facie case of discrimination.'" Id. (quoting Reed v. Airtran Airways, 531 F.Supp.2d 660, 666 (D.Md.2008)). See also Hewitt v. New York City Dept. of Health and Mental Hygiene, No. 09-CV-5705 (RRM)(RLM), 2012 WL 1106715, at *2 (E.D.N.Y. March 31, 2012) ("The Second Circuit has reiterated that Swierkiewicz continues to be the proper framework for analyzing whether a plausible claim for discrimination has been stated." (citing Arista Records LLC v. Doe 3, 604 F.3d 110, 120-21 (2d Cir.2010); Boykin, 521 F.3d at 213; Gillman v. Inner City Broad. Corp., No. 08 Civ. 8909(LAP), 2009 WL 3003244, at *3 (S.D.N.Y. Sept. 18, 2009))); Singleton v. Labor Finders, No. 11-0732, 2011 WL 6813204, at *2 n. 1 (W.D.La. Nov. 29, 2011) ("Twombly did not overrule Swierkiewicz."); Gillman,
For example, the Northern District of Illinois has asserted that although "[a] prima facie case of pattern or practice discrimination may be established through a combination of strong statistical evidence of disparate impact and anecdotal evidence of the employer's intent to treat the protected class unequally," Scrub, Inc., 2009 WL 3458530, at *2 (citing Teamsters, 431 U.S. 324, 97 S.Ct. 1843; Mozee v. Am. Commercial Marine Serv., Co., 940 F.2d 1036, 1051 (7th Cir.1991)), "[t]he manner of proof is distinct from pleading requirements," id. Thus, that court opined, "an employment discrimination plaintiff must satisfy notice-pleading requirements; specific facts establishing a prima facie case of employment discrimination are not required." Id. (citing Twombly, 550 U.S. at 570, 127 S.Ct. 1955; Swierkiewicz, 534 U.S. at 514-15, 122 S.Ct. 992). Likewise, the Northern District of Illinois rejected the defendant's conclusion that the EEOC's four-year investigation "warrants a more detailed complaint." Id. Rather, the court emphasized, "[l]itigants are entitled to discovery before `being put to their proof.'" Id. (quoting Vitug v. Multistate Tax Comm'n, 88 F.3d 506, 513 (7th Cir. 1996)). See also Propak Logistics, Inc., 2010 WL 3081339, at *3 ("Even though after so many years of investigation it would seem greater detail could have been provided, the Court nonetheless concludes that the Complaint is sufficient to comply with Rule 8."). As the EEOC had identified the nature of the discrimination and the relevant time period, the Northern District of Illinois determined that the EEOC had succeeded in stating a pattern or practice claim. Id. See also Propak Logistics, Inc., 2010 WL 3081339, at *5 ("[T]he Complaint contains the allegation that between October 2002 and June 2004, the Defendant had a pattern or practice of discriminatory hiring by predominantly hiring Hispanic applicants to fill vacant, available positions to the exclusion of similarly or more qualified non-Hispanic applicants. The EEOC has alleged that Defendant took a specific adverse employment action; that is, intentional discrimination, against qualified applicants and potential applicants based on their national origin.... This sufficiently identifies the nature of the discrimination-failure or refusal to hire because of national origin. The time period involved is alleged." (citations omitted)).
Despite the continuing vitality of Swierkiewicz, courts have acknowledged that the dictates of Twombly and Iqbal still apply to discrimination complaints. Courts reconcile these three cases by explaining that plaintiffs need not establish every element of their prima facie case,
Defendants urge this Court to examine the Amended Complaint in light of Twombly and Wal-Mart. (Reply to Resp. to Mot. Dismiss at 4.) According to Defendants, the fact that Wal-Mart concerned class certification is irrelevant; surely, Defendants press, Wal-Mart's standard is useful in evaluating what facts must be alleged to state a claim. (Id.) Indeed, Defendants assert, Wal-Mart's commonality finding consisted in part of the question of whether a pattern or practice existed. (Id.) Defendants are correct that Wal-Mart explained that "[w]ithout some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members' claims for relief will produce a common answer to the crucial question why was I disfavored." 131 S.Ct. at 2552 (emphasis in original). Additionally, the Wal-Mart Court noted that "[t]he only corporate policy that the plaintiffs' evidence convincingly establishes is Wal-Mart's `policy' of allowing discretion by local supervisors over employment matters." Id. at 2554 (emphasis in original). The Court opined that "that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices." Id. (emphasis in original). However, the Court declines Defendants' invitation to fashion a new pleading standard for pattern or practice cases based on Wal-Mart. In fact, the Wal-Mart Court explicitly distinguished its Rule 23 class certification holding from a pleading standard: "Rule 23 does not set forth a mere pleading standard." Id. at 2551. In other words, unlike a party attempting to survive a 12(b)(6) motion, "[a] party seeking class certification must affirmatively demonstrate his compliance with the Rule — that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of
Nonetheless, the Court concludes that the EEOC's Amended Complaint cannot survive the Motion to Dismiss. The Court finds most convincing the case law that reconciles Twombly and Iqbal with Swierkiewicz. Specifically, the Court agrees that although Swierkiewicz's finding that a plaintiff need not make a prima facie case of discrimination retains its vitality, Twombly and Iqbal demand that plaintiffs state a plausible claim for relief. "Accordingly, while a complaint need not contain specific facts establishing a prima facie case of employment discrimination to overcome a Rule 12(b)(6) motion to dismiss, it must nevertheless give fair notice of the basis of Plaintiff's claims, and the claims must be facially plausible." Gillman, 2009 WL 3003244, at *4.
Here, the EEOC has failed to state a facially plausible pattern or practice claim. The EEOC alleges that Defendants have denied employment to Black applicants for hourly and salaried positions at their retail stores nationwide based on their race. The EEOC explains that of about 600 managers at Defendants' retail stores, only about 10 to 15 were Black. (Am. Compl. ¶ 8.) This data may be sufficient to state a plausible claim that Defendants had a pattern or practice of failing to hire Black managers. However, the EEOC alleges that Defendants have denied employment to Black applicants for many salaried and hourly positions, not just managers. (Id.) Defendants go on to provide four examples of discriminatory behavior. (Id.) While these examples concern extremely troubling racist comments surrounding hiring decisions, the EEOC provides few facts showing that any applicants were actually denied positions based on their race. Nor does this handful of alleged incidents render the EEOC's allegations of a nationwide pattern or practice plausible. Similarly, the EEOC explains that of the 892 managers at Defendants' retail stores, only 33 were Hispanic.
The EEOC requests, in the alternative, leave to amend its Amended Complaint. The Court evaluates the EEOC's request for leave to amend under Federal Rule of Civil Procedure 15, which provides that this Court "`should freely give leave when justice so requires.'" Cole v. Sandel Med. Indus., LLC., 413 Fed.Appx. 683, 688 (5th Cir.2011) (quoting Fed.R.Civ.P. 15(a)(2)). "[T]he language of this rule evinces a bias in favor of granting leave to amend," and the Court "must have a substantial reason to deny a request for leave to amend." Lyn-Lea Travel Corp. v. Am.
Leave to amend "`is not automatic,'" however. Udoewa v. Plus4 Credit Union, No. H-08-3054, 2010 WL 1169963, at *1 (S.D.Tex. March 23, 2010) (quoting Matagorda Ventures, Inc. v. Travelers Lloyds Ins. Co., 203 F.Supp.2d 704, 718 (S.D.Tex.2000) (citing Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 598 (5th Cir.1981))). In considering whether to grant leave to amend, the Court may weigh multiple factors, including undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies, undue prejudice, and futility. Wimm v. Jack Eckerd Corp., 3 F.3d 137, 139 (5th Cir.1993). The Court may also consider whether the EEOC knew "`or should have known of the facts upon which the proposed amendment is based but fail[ed] to include them in the original complaint.'" Udoewa, 2010 WL 1169963, at *2 (quoting Pallottino v. City of Rio Rancho, 31 F.3d 1023, 1027 (10th Cir.1994)). See also Ross v. Houston Housing Authority, No. H-09-2361, 2010 WL 1726908, at *2 (S.D.Tex. April 28, 2010) (denying motion to amend on the basis that plaintiff had prior knowledge and possession of supporting evidence); Pope v. MCI Telecommunications Corp., 937 F.2d 258, 263 (5th Cir.1991) (denying motion for leave to amend in part because plaintiff could have added her proposed amendment years earlier, as it "was not about something recently discovered" but "based upon the same facts as her previous claims").
Balancing these factors, the Court determines that the EEOC should be granted leave to amend its Amended Complaint. The Court has no reason to believe that amendment will be futile. Defendants will not be heavily prejudiced by leave to amend, as discovery has not yet begun in this case and a Scheduling Order has not been entered. The EEOC has amended its Complaint only once, and did so without the benefit of guidance from the Court as to its pleading requirements; thus, the EEOC is not guilty of repeated failure to amend. In sum, the EEOC is granted leave to file a Second Amended Complaint within 21 days of the date of this Memorandum and Order.
"Section 706 of Title VII authorizes the EEOC to bring claims involving the rights of aggrieved individuals challenging an unlawful employment practice on an individual or class-wide basis." Global Horizons, 860 F.Supp.2d at 1191, 2012 WL 928160, at *16 (citing 42 U.S.C. § 2000e-5(f)(1); EEOC v. Scolari Warehouse Mkts., Inc., 488 F.Supp.2d 1117, 1143 (D.Nev.2007)). "The 1991 amendments to Title VII expanded the remedies available for § 706 claims from purely equitable remedies, including backpay, to include punitive and compensatory damages, without similarly expanding the damages available for claims brought pursuant to § 707." JBS USA, LLC, 2011 WL 3471080, at *4 (citing 42 U.S.C. § 1981a(a)(1); EEOC v. Waffle House, Inc., 534 U.S. 279, 287, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002)). Thus, under § 706, "[t]he EEOC is entitled to equitable relief, and may also usually pursue compensatory and punitive damages." EEOC v. CRST Van Expedited, Inc., 611 F.Supp.2d 918, 929 (N.D.Iowa 2009) (citing 42 U.S.C. § 2000e-5(g); 42 U.S.C. § 1981a(a)). "A § 706 claim involves the rights of aggrieved individuals challenging unlawful employment practice on an individual or class-wide basis, whereas a § 707 claim involves a pattern-or-practice of systemic discrimination challenging widespread discrimination
"Notwithstanding those differences, courts have blurred the line between class-wide claims brought pursuant to § 706 and pattern-or-practice claims brought pursuant to § 707." Scolari Warehouse Mkts., Inc., 488 F.Supp.2d at 1143 (citing General Telephone, 446 U.S. at 328 n. 12, 100 S.Ct. 1698; EEOC v. Gen. Tel. Co. of the Northwest, Inc., 885 F.2d 575, 577 (9th Cir.1989); EEOC v. Foster Wheeler Constructors, Inc., No. 98 C 1601, 1999 WL 528200, at *1 (N.D.Ill.1999)). Some courts have determined that "the EEOC may bring suit alleging a pattern or practice of unlawful discrimination under section 706 or section 707, but if the suit arises from a charge filed pursuant to section 706, then the EEOC must meet the prerequisites of section 706 before filing suit." EEOC v. Int'l Profit Associates, Inc., No. 01 C 4427, 2007 WL 844555, at *9 (N.D.Ill. March 16, 2007). For example, in Scolari, the District Court of Nevada determined that pattern-or-practice claims could be brought pursuant to § 706, even though doing so, "when Congress specifically created another avenue to bring such claims[,] creates an apparent redundancy in the law that troubles the Court." Scolari Warehouse Mkts., Inc., 488 F.Supp.2d at 1144. The court based its decision on several factors. First, the court observed that there were several intersections between § 706 and § 707, including the fact that § 707(e) incorporates the procedural requirements of § 706. Id. Second, as the court noted, Title VII has long been construed liberally in favor of complainants. Id. at 1145. The court expressed concern that "allowing punitive and compensatory damages for class-wide claims and not for pattern-or-practice claims, when both are equally severe in magnitude, would disrupt Title VII's purpose to eradicate widespread discrimination and to make persons whole again." Id. (citing Albemarle Paper Co. v. Moody, 422 U.S. 405, 417-18, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975)). Third, the court found that § 706 and § 707 claims are similar in that "the interest in bringing a class action and/or a pattern-or-practice claim is the same: to prevent against unlawful employment practices affecting a group of individuals with related claims." Id. (citing Harriss v. Pan Am. World Airways, Inc., 74 F.R.D. 24, 41-42 (N.D.Cal. 1977); Cherosky v. Henderson, 330 F.3d 1243, 1247 (9th Cir.2003)). The court concluded
Other courts have reached the contrary conclusion. Disagreeing with Scolari, the District Court for the Eastern District of Michigan insisted "that allowing punitive and compensatory damages in § 706, but not § 707, actions may `disrupt Title VII's purpose' is ... irrelevant-Congress apparently did not think so, as the 1992 amendments to 42 U.S.C. § 1981a only extended punitive and compensatory damages to § 706 actions, not § 707 actions." Serrano, 711 F.Supp.2d at 793 (emphasis in original). That court went on to find that the EEOC could not proceed solely under § 706, but reserved its "judgment on the propriety of allowing the EEOC to `blur the lines' ... between the two statutory sections" in cases where the EEOC pursued both § 706 and § 707 actions simultaneously. Id. at 794. Similarly, the Northern District of Iowa opined that, "[l]ike § 706, § 707 grants the EEOC the right to seek equitable relief against employers found to have intentionally engaged in a pattern or practice of unlawful employment discrimination." CRST Van Expedited, Inc., 611 F.Supp.2d at 930 (citing 42 U.S.C. § 2000e-6(a)). "Unlike § 706, however, the EEOC is not authorized to seek compensatory or punitive damages under § 707; the relevant portion of 42 U.S.C. § 1981a only authorized recovery of compensatory and punitive damages `[i]n an action brought by a complaining party under [§ 706].'" Id. (citing 42 U.S.C. § 1981a(a)). The CRST Van Expedited court accused the EEOC of "attempting to have its cake and eat it too" by trying "to avail itself of the Teamsters burden-shifting framework yet still seek compensatory and punitive damages under § 706." Id. at 934. "Complicating matters further," that court observed, "it is important to remember that the Supreme Court designed the Teamsters burden-shifting framework with only equitable relief in mind." Id. (citing Jenson v. Eveleth Taconite Co., 130 F.3d 1287, 1290 n. 4 (8th Cir.1997)). Fortunately, the CRST Van Expedited court did not need to "cut through this cloud of confusion" because the defendant did not argue that the EEOC's complaint failed to state a pattern or practice claim. Id.
Examining these precedents, the Court concludes that the EEOC cannot bring a hybrid pattern or practice claim that melds the respective frameworks of § 706 and § 707. Rather, the Court interprets § 706 to not provide a vehicle for pattern or practice claims. Likewise, the Court believes § 707 only permits equitable relief. The Court does not read General Telephone, 446 U.S. 318, 100 S.Ct. 1698, or Monarch Machine Tool Co., 737 F.2d 1444, to empower the Court to blend the § 706 and § 707 frameworks; indeed, neither case squarely addressed that issue. The Court finds no support in the case law, or in the statutes themselves, for the EEOC's proposition that § 707's pattern or practice language is merely a redundancy.
Similar to its pattern or practice claim, any allegations brought pursuant to the EEOC's powers under § 706 must include sufficient facts to state a plausible claim for relief. Currently, the EEOC appears to bring a claim for retaliation. Nonetheless, the EEOC fails to plead sufficient facts to state a retaliation claim. While the EEOC is not obligated to provide the identities of all § 706 class members, the Court cannot locate a case in
Defendants urge that the EEOC has failed to state a claim that all conditions precedent have been met, in compliance with Iqbal. (Mot. Dismiss at 28.) Rule 9(c) provides: "In pleading conditions precedent, it suffices to allege generally that all conditions precedent have occurred or been performed." Fed.R.Civ.P. 9(c). The Fifth Circuit has explained that "there
Pursuant to 42 U.S.C. § 2000e-8(c), "[e]very employer, employment agency, and labor organization" must "make and keep such records relevant to the determinations of whether unlawful employment practices have been or are being committed," and "preserve such records for such periods ... as the [EEOC] shall prescribe by regulation." The EEOC alleges that "[r]ecords which Defendants unlawfully failed to retain include, but are not limited to, relevant employment applications and personnel files, tests administered to applicants, lists of job candidates, electronic messages and audio and documentary records of efforts to contact the corporate complaint center." (Am. Compl. ¶ 17.) For example, the EEOC claims, Defendants "allowed the destruction of hotline recordings containing discrimination complaints made by employees" after receiving notice of the Commissioner Charge that underlies this action. Importantly, "a record-keeping violation may occur whether the records are purposely destroyed or merely lost." EEOC v. T.R. Orr, Inc., No. CV 04-2003-PCT-JAT, 2007 WL 505293, at *4 (D.Ariz. Feb. 14, 2007) (citing Lombard v. MCI Tel. Corp., 13 F.Supp.2d 621, 629 n. 10 (N.D.Ohio 1998)). These facts, taken together, are sufficient to state a claim of a record-keeping violation. Thus, the record-keeping claim will not be dismissed.
"The plain language of § 707(e) authorizes the EEOC to investigate and act on a
This Court concludes that the EEOC is bound by the 300-day limitations period when proceeding pursuant to either § 706 or § 707. "The Court need not look any farther than the plain language of Section 706(e)(1) to conclude that the class of individuals for whom the EEOC can seek relief is limited to those who could have filed an EEOC charge during the filing period." Freeman, 2010 WL 1728847, at *4. "The plain language of section 707 incorporates this procedure into pattern or practice actions." Bloomberg, 751 F.Supp.2d at 645 (citing 42 U.S.C. § 2000e-6(e); Freeman, 2010 WL 1728847, at *4; EEOC v. Custom Cos., Inc., No. 02 Civ. 3768, 2004 WL 765891, at *8 (N.D.Ill. Apr. 7, 2004); EEOC v. Optical Cable Corp., 169 F.Supp.2d 539, 546 (W.D.Va.2001)). "Nothing in the text of Section 706 or 707 suggests that the EEOC can recover for individuals whose claims are otherwise time-barred." Freeman, 2010 WL 1728847, at *4. "If Congress intended to make an exception for the EEOC to revive stale claims under Section 706 and 707, it should have said so." Id.
"The continuing violation doctrine creates an equitable exception to the statute of limitations set forth in Section 706(e)(1)." Id. at *5. "To prove a continuing violation, a plaintiff must demonstrate an ongoing pattern of discrimination and that at least one act of discrimination occurred during the charging period." Id. (citing Gilliam v. S.C. Dep't of Juvenile Justice, 474 F.3d 134, 139-42 (4th Cir. 2007)). "It is true that, `[p]rovided that an act contributing to the [hostile work environment] claim occurs within the filing period,' the court may consider acts outside the statutory time period as evidence of the hostile work environment." E.E.O.C. v. JBS USA, LLC, 794 F.Supp.2d 1188,
Thus, "[e]ven in a pattern-or-practice case such as this, the discrete decisions to refuse to hire and to terminate employment cannot be linked together to create a continuing violation." Id. "First, the continuing violation doctrine permits the inclusion of additional, but otherwise time-barred, claims — not the inclusion of otherwise time-barred parties." Freeman, 2010 WL 1728847, at *6 (emphasis in original). Furthermore, "[a] pattern or practice of refusing to hire job applicants does not constitute a continuing violation." Id. This is because "[t]he refusal to hire an applicant ... is undoubtedly a discrete act of discrimination." Id. (citing Morgan, 536 U.S. at 114, 122 S.Ct. 2061) ("Discrete acts such as termination, failure to promote, denial of transfer, or refusal to hire are easy to identify." (emphasis added)). "It follows that Title VII precludes recovery in a pattern or practice claim for discrete acts of unlawfully denying a particular applicant a job ... if the decision is made outside of the limitations period." Id. See also O'Reilly Automotive, Inc., 2010 WL 5391183, at *10 ("The EEOC also argues that the 300-day limitation period does not apply to continuing violations. But the continuing violation doctrine does not apply to discrete acts of discrimination such as a failure to promote.") (citing Morgan, 536 U.S. at 113-14, 122 S.Ct. 2061; Celestine v. Petroleos De Venezuela SA, 108 Fed.Appx. 180, 182 n. 3 (5th Cir.2004) ("This Court did not and still does not apply the continuing violation doctrine to discrete incidents such as training, hiring, and promotion.")). As the 300-day period applies to all of the EEOC's claims, any claims for discrete violations occurring outside of that period — including a pattern or practice of failure to hire — must be dismissed.
The EEOC does not argue that BPI, in its capacity as a separate corporation, has independent minimum contacts with Texas. (Resp. to Mot. Dismiss at 30.) Rather, the EEOC asserts, the minimum contacts and due process personal jurisdiction tests are satisfied by the integrated enterprise theory. (Id. at 31.) In Trevino v. Celanese Corp., the Fifth Circuit Court of Appeals explained that in Title VII cases, "superficially distinct entities may be exposed to liability upon a finding that they represent a single, integrated enterprise: a single employer." 701 F.2d 397, 404 (5th Cir.
The integrated enterprise theory described by the EEOC is a liability standard, however, not a jurisdictional standard. "The purpose of the single integrated-enterprise theory is to determine whether two entities constitute a single employer for the purposes of Title VII liability; the minimum-contracts test makes certain that persons are not drug into the courts of far-away jurisdictions in which they did not envision being involved and in which the existence of jurisdiction would be fundamentally unfair." Walker v. THI of New Mexico at Hobbs Center, 801 F.Supp.2d 1128, 1153 (D.N.M.2011) (quotations omitted). "`[T]hat a defendant would be liable under a statute if personal jurisdiction over it could be obtained is irrelevant to the question of whether such jurisdiction can be exercised.'" EEOC v. AMX Communications, Ltd., No. WDQ-09-2483, 2011 WL 3555831, at *6 (D.Md. Aug. 8, 2011) (quoting Cent. States Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 944 (7th Cir.2000)).
Thus, this Court "does not believe that it should confuse liability and jurisdiction by using the single-employer theory to determine whether it has personal jurisdiction" over BPI. Walker, 801 F.Supp.2d at 1153 (quotations omitted). Indeed, that BPI may "be liable under Title VII if the Court has personal jurisdiction over them is not relevant to the question whether the Court can exercise personal jurisdiction over them," and conversely "if the Court does not have personal jurisdiction over [them], it cannot render a valid judgment on the merits of other issues" — including whether BPI and the other Defendants are part of a single, integrated enterprise. Id. at 1154 (citations omitted). See also AMX Communications, Ltd., 2011 WL 3555831, at *6 (in a Title VII case, rejecting application of the integrated enterprise test for jurisdictional purposes); Smit v. Isiklar Holding A.S., 354 F.Supp.2d 260, 267 (S.D.N.Y. 2005) ("[P]laintiff conflates ERISA subject matter jurisdiction and the due process analysis required for personal jurisdiction. Even if ERISA considers all the defendants a `single employer' and a `controlled group' and `common control' with Isiklar Holding — issues I need not reach here — it would not empower the Court to impute the actions of one entity to another for the purposes of establishing personal jurisdiction."). But see King v. Enterprise Leasing Co. of DFW, No. 3:05-CV-0026-D, 2006 WL 784885, at *4 (N.D.Tex. March 28, 2006) ("Because King has made a prima facie showing that Enterprise Company was her employer and discriminated and retaliated against her in Texas, where she was employed, she has likewise made a prima facie showing of specific jurisdiction, i.e., that Enterprise Company's contacts with Texas arise from, or are directly related to, the cause of action."); Procaccino-Hague v. Boll Filter Corp., No.
As support, the EEOC cites to case law that is actually based on the single business enterprise theory of personal jurisdiction — not the single enterprise theory of Title VII liability. However, that theory is no longer valid under Texas law. Relying on what it perceived to be Texas courts' single business enterprise theory, the Northern District of Texas found personal jurisdiction over a foreign company based on the fact that, as a parent company, it had an excessive amount of control over its Texas-based subsidiary. Berry v. Lee, 428 F.Supp.2d 546, 554 (N.D.Tex.2006). Since that decision, however, the Texas Supreme Court has clarified that it does not recognize a single business enterprise theory of personal jurisdiction. PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 175 (Tex.2007). See also Guzman v. Memorial Hermann Hospital System, No. H-07-3973, 2008 WL 5273713, at *10 (S.D.Tex. Dec. 17, 2008) (observing that "the Texas Supreme Court recently held that the relevant factors for `jurisdictional veil-piercing' in a case involving a parent and a subsidiary are not those factors associated with the single enterprise theory"). Rather, the Texas Supreme Court held that plaintiffs seeking to fuse a parent and its subsidiary for jurisdictional purposes must prove the parent controls the internal business operations and affairs of the subsidiary to a degree greater than that normally associated with common ownership and directorship. Id. (citing BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 799 (Tex.2002)). The Texas Supreme Court explained that the evidence must go so far as to "`show that the two entities cease to be separate so that the corporate fiction should be disregarded to prevent fraud or injustice.'" Id. (quoting BMC Software, 83 S.W.3d at 799). The Court found guidance in a leading treatise, which opined that "courts should determine whether the subsidiary is `separate and distinct from its parent corporation for personal jurisdiction purposes,' taking into account the amount of the subsidiary's stock owned by the parent corporation, the existence of separate headquarters, the observance of corporate formalities, and the degree of the parent's control over the general policy and administration of the subsidiary." Id. (quoting 4A Wright & Miller, Federal Practice & Procedure § 1069.4). Thus, the single business enterprise theory of personal jurisdiction does not exist under Texas law.
Additionally, it is important to note that the EEOC bears the burden of making a prima facie case of personal jurisdiction. In the supporting precedents the EEOC cites, plaintiffs prevailed on personal jurisdiction only after presenting supporting evidence. For example, in Procaccino-Hague, cited by the EEOC, the plaintiff alleged that the defendants were "an integrated enterprise and constitute a single enterprise in that the two entities have interrelated operations, a centralized control of labor relations, common management and financial control by the parent." 2004 WL 78155, at *3. In addition, the plaintiff offered an affidavit showing that the companies used the same presidents, set forth some of the same terms and conditions of employment, shared financial statements, had staff regularly travel between them, and generally did not operate as separate entities. Id. Similarly, in King, the court found personal jurisdiction over a company when the plaintiff provided proof that the department she worked for was a component of the company; that she received direction, supervision, and work policies from the company; that her
The Court concludes, however, that it will not dismiss BPI from the lawsuit at this time. Rather, the Court defers its ruling on whether it has personal jurisdiction over BPI. Within 14 days of filing its Second Amended Complaint, the EEOC should file supplemental briefing with accompanying affidavits or other evidence supporting this Court's personal jurisdiction over BPI. Defendants may file supplemental briefing in response. After examining an enriched record, the Court will rule on its personal jurisdiction over BPI. The Court's other rulings in this Memorandum and Order do not apply as to BPI.
"Before filing suit under Title VII, a plaintiff must exhaust his administrative remedies with the EEOC." JBS USA, LLC, 794 F.Supp.2d at 1199 (citing Shikles v. Sprint/United Management Co., 426 F.3d 1304, 1317 (10th Cir.2005)). "`A corollary of this general rule is that a party must be named in the EEOC charge before that party may be sued under Title VII unless there is a clear identity of interest between [the unnamed party] and a party named in the EEOC charge.'" Steward v. Aries Freight Systems, L.P., No. H-07-1651, 2007 WL 3001660, at *3 (S.D.Tex. Oct. 12, 2007) (quoting Romain v. Kurek, 836 F.2d 241, 245 (6th Cir.1987); Way v. Mueller Brass Co., 840 F.2d 303, 307 (5th Cir.1988)). One test finds an identity of interest if the unnamed party has been provided with adequate notice of the charge and received the opportunity to engage in conciliation. See also Alexander v. Local 496 Laborers' Int'l Union of North Am., 177 F.3d 394, 412 (6th Cir. 1999) (citing Romain, 836 F.2d at 245). Alternatively, to determine identity of interest for the purposes of an EEOC charge, courts may scrutinize "the `relationship between the named and unnamed parties at the time the charge is filed and conciliation efforts occur.'" Steward, 2007 WL 3001660, at *3 (quoting Romain, 836 F.2d at 245-46; Glus v. G.C. Murphy Co., 562 F.2d 880 (3d Cir.1977)). "In looking at the relationship, the court examines four factors: whether the role of the unnamed party could through reasonable effort by the complainant be ascertained at the time of the filing of the EEOC complaint; ... whether, under the circumstances, the interests of a named [party] are so similar as the unnamed party's that for the purpose of obtaining voluntary conciliation and compliance it would be unnecessary to include the unnamed party in the EEOC proceedings; whether its absence from the EEOC proceedings resulted in actual prejudice to the interests of the unnamed party and whether the unnamed party has in some way represented to the complainant that its relationship with the complainant is to be through the named party." Id. (citing Romain, 836 F.2d at 246). "This criterion has been further refined to the point that `[t]he critical question to be answered then is: What entity made the final decisions regarding employment matters related to the persons claiming discrimination?'" Jurek v. Williams WPC-I, Inc., No. H-08-01451, 2009 WL 1748732, at *5 (S.D.Tex. June 17, 2009) (quoting Johnson v. Crown Enters., Inc., 398 F.3d 339, 343 (5th Cir.2005)).
Courts have held that the record, at a 12(b)(6) stage, is insufficiently developed to allow the court to adequately apply the applicable test; as such, courts have deferred the identity of interest analysis until
Defendants point the Court to case law that suggests courts developed this exception to the naming rule "to protect plaintiffs who are `unfamiliar with the technicalities of formal pleadings' and the `vagaries' of Title VII law." Upshaw v. Bd. of Supervisors of Southern University and Agricultural College, No. 10-184-JJB-SCR, 2011 WL 2970950, at *5 (M.D.La. July 19, 2011) (quoting Fassbender v. Treasure Chest Casino, 2008 WL 170071, at *6 (E.D.La.2008)). Pursuant to this precedent, "`[t]he leniency accorded a layman in drafting the EEOC charge should not be extended to an attorney.'" Id. (quoting Fassbender, 2008 WL 170071, at *6). Accordingly, "courts have held that the exception does not apply — and an unnamed party may not be sued — if the plaintiff is an attorney or is represented by counsel." Id. (citing Fassbender, 2008 WL 170071, at *6). See also Wei Hong Zheng v. Wong, No. 07-CV-4768 (FB)(JO), 2009 WL 2601313, at *4 (E.D.N.Y. Aug. 24, 2009) (agreeing "with the majority of the district courts in the Second Circuit that the exception only applies where plaintiff was not represented by counsel at the time of the EEOC filing" (quotations, citation, and punctuation omitted)); McLaughlin v. Kvaerner ASA, No. 04-5559, 2007 WL 764290, at *2 (E.D.Pa. March 8, 2007) ("`The applicability of the exception, however, is limited to plaintiffs who were not represented by counsel at the time the EEOC complaint was filed.'" (quoting Fordham v. Agusta Westland, N.V., 2007 WL 136329, at *2-3, 2007 U.S. Dist. LEXIS 2979, at *7-9 (E.D.Pa. Jan. 11, 2007))); Gagliardi v. Universal Outdoor Holdings, Inc., 137 F.Supp.2d 374, 379 (S.D.N.Y. 2001) ("This identity of interest exception, however, is limited to situations where a plaintiff was not represented by counsel at the time the EEOC charge was filed." (citing Harrington v. Hudson Sheraton Corp., 2 F.Supp.2d 475, 477 (S.D.N.Y. 1998); Sharkey v. Lasmo (Aul Ltd.), 906 F.Supp. 949, 954 (S.D.N.Y.1995))).
Not all courts agree that the identity of interest exception should be limited to pro se plaintiffs, however. Indeed, "[d]istrict courts have split over whether pro se status before the agency is a threshold issue precluding application of the `identity of interests' test." Consolmagno v. Hospital of St. Raphael, No. 3:11cv109 (PCD), 2011 WL 4804774, at *7 n. 14 (D.Conn. Oct. 11, 2011) (citing Anderson v. Derby Bd. of Educ., 718 F.Supp.2d 258, 275 (D.Conn. 2010) (holding that pro se status at the administrative stage is required before applying "identity of interests" exception); Olvera-Morales v. Sterling Onions, Inc., 322 F.Supp.2d 211, 216 (N.D.N.Y.2004) (applying "identity of interests" exception when experienced Title VII counsel failed to name respondent before EEOC)). See also Turk v. Salisbury Behavioral Health, Inc., No. 09-CV-6181, 2010 WL 1718268, at *3 (E.D.Pa. April 27, 2010) ("Although
The Court concludes that the identity of interests exception may still apply to cases brought by the EEOC. In Glus, the Sixth Circuit noted the importance of "the availability of complete redress of legitimate grievances without undue encumbrance by procedural requirements especially when demanding full and technical compliance would have no relation to the purposes for requiring those procedures in the first instance." Glus, 562 F.2d at 888. The Court of Appeals opined: "We cannot believe Congress intended that a person filing charges should accurately ascertain, at the risk of later facing dismissal of their suit, at the time the charges were made, every separate entity which in some way may have violated Title VII." Id. These concerns, although perhaps more pressing when concerning pro se plaintiffs, id. ("`To expect a complainant at the administrative stage, usually without the aid of counsel, to foresee and handle intricate procedural problems ... would place a burden ... which Congress did not intend.'" (quoting Evans v. Sheraton Park Hotel, 503 F.2d 177 (1974))), do not appear to be limited to them. At this stage in the litigation, there is insufficient evidence from which to evaluate whether an identity of interest existed between all Defendants. Therefore, the Court declines to dismiss Tracker on these grounds.
For the reasons explained above, Defendants' Motion is
The Court defers its decision as to its personal jurisdiction over BPI until the submission of supplemental briefing; the remaining portions of this Memorandum and Order do not apply as to BPI. The EEOC may file a Second Amended Complaint within 21 days of this Memorandum and Order. Discovery will be stayed until the Court rules on Defendants' Motion to Dismiss the Second Amended Complaint, if such a Motion is filed. In the event Defendants do not file a Motion to Dismiss the Second Amended Complaint, the stay on discovery will be lifted when Defendants file an Answer to the Second Amended Complaint.
Before the Court is Defendants' Motion to Dismiss for Lack of Personal Jurisdiction over Bass Pro, Inc. ("BPI"). After reviewing the supplemental briefing ordered by this Court and the applicable law, the Court finds that Defendant's Motion
The Court reviewed the facts of this case in a prior Memorandum and Order (Doc. No. 53) and will not do so again. The Equal Employment Opportunity Commission ("EEOC") brings this discrimination action against Bass Pro Outdoor World, LLC ("BPOW"), Tracker Marine, LLC ("Tracker"), and BPI (collectively, "Defendants"), pursuant to Title VII of the Civil Rights Act of 1964 as amended, and Title I of the Civil Rights Act of 1991 ("Title VII"). (Doc. No. 23, Am. Compl. ¶¶ 3-4.) The EEOC alleges that Tracker and BPOW are both owned and controlled by BPI.
The EEOC asserts that Defendants have a nationwide standard operating procedure of discouraging the hiring of Black and Hispanic applicants for many hourly and salaried positions at their retail stores because of their race. (Id. ¶ 8.) According to the EEOC, Defendants have selected Black applicants at rates far below their availability in the relevant labor pools. (Id.) For example, the EEOC avers, Defendants have produced data showing that out of 600 managers at their retail stores, only 10 to 15 were Black. (Id.) The EEOC further claims that Defendants have, on a nationwide basis, unlawfully retaliated against employees who opposed practices that they reasonably perceived to violate Title VII. (Id. ¶ 15.) The EEOC also accuses Defendants of failing to preserve records relevant to the determination of whether unlawful employment practices have been or are being committed, in violation of Section 709(c) of Title VII, 42 U.S.C. § 2000e-8(c). (Id. ¶ 17.)
Defendants assert in their Motion to Dismiss the First Amended Complaint (Doc. No. 32) that the EEOC does not have personal jurisdiction over BPI. Defendants allege that BPI is a non-resident holding company that has no appreciable contacts within Texas. BPI is incorporated and organized under the laws of the State of Delaware and maintains its principal place of business in Springfield, Missouri. (Doc. No. 32-1, ¶ 3-4.) The EEOC argued that the Court could assert personal jurisdiction over BPI because BPI and BPOW are an integrated enterprise. (Id. ¶ 4.) BPOW is a Missouri limited liability company, and has continuously been doing business in the State of Texas and the City of Katy. Because BPOW is integrated with BPI, Plaintiff attempted to use an integrated enterprise theory to establish jurisdiction over BPI.
The Court held in its previous Order that the integrated enterprise theory described by the EEOC is a liability standard, not a jurisdictional standard. EEOC v. AMX Communications, Ltd., No. WDQ-09-2483, 2011 WL 3555831, at *6 (D.Md. Aug. 8, 2011) (finding that the liability of a defendant is irrelevant to the question of whether jurisdiction can be exercised). Thus, this Court did not believe that "it should confuse liability and jurisdiction by using the single-employer theory to determine whether it has personal jurisdiction" over BPI. Walker v. THI of New Mexico at Hobbs Center, 801 F.Supp.2d 1128, 1153 (D.N.M.2011). Rather, the Texas Supreme Court has held that plaintiffs seeking to fuse a parent and its subsidiary for jurisdictional purposes must prove the parent controls the internal business operations and affairs of the subsidiary to a degree greater than that normally associated with common ownership and directorship. Id. (citing BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 799 (Tex.2002)). The Court
The Court defers any ruling regarding Tracker because Defendants have stated that they incorrectly identified Tracker on Defendants' Certificate of Interested Parties, when Tracker Marine Retail, LLC is the correct party. (Doc. No. 74, FN 2.) Tracker is a manufacturing company that has no involvement in the underlying EEOC investigation. Until August 24, 2012, the EEOC was under the impression that Tracker, rather than Tracker Marine Retail, LLC, was the party related to this case. (Id.) On August 24, Defendants filed an Amended Certification of Interested Parties to correct this error. (Doc. No. 75.) Therefore, the Court finds that the dismissal of BPI is without prejudice to the right of the EEOC to conduct discovery regarding the recently identified Tracker Marine Retail, LLC.
"Absent a rule or statute to the contrary, a federal court [may] exercise jurisdiction over only those defendants who are subject to the jurisdiction of courts of the state in which the court sits." Point Landing, Inc. v. Omni Capital International, Ltd., 795 F.2d 415, 419 (5th Cir. 1986), aff'd sub nom. Omni Capital International, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987). Because the Texas long-arm statute, Tex. Civ. Prac. & Rem. Code Ann. §§ 17.041-17.045, is coterminous with the Due Process Clause of the Fourteenth Amendment to the United States Constitution, the Court's constitutional due process inquiry into personal jurisdiction also serves as an inquiry into personal jurisdiction under the Texas long-arm statute. Command-Aire Corp. v. Ontario Mechanical Sales and Service Inc., 963 F.2d 90, 93-94 (5th Cir.1992). To comport with constitutional due process, a plaintiff must show that: (1) defendants purposefully availed themselves of the benefits and protections of Texas law, thereby establishing "minimum contacts" with Texas such that defendants could reasonably have anticipated being haled into court there; and (2) under the circumstances, the exercise of personal jurisdiction "does not offend traditional notions of fair play and substantial justice." Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987); Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); Asarco, Inc. v. Glenara, Ltd., 912 F.2d 784 (5th Cir.1990).
Generally, a foreign parent corporation is not subject to the jurisdiction of a forum state merely because its subsidiary is present or doing business there; the existence of a parent-subsidiary relationship, by itself, is not sufficient to warrant the assertion of jurisdiction over the foreign parent. 2 J. Moore & J. Lucas, Moore's Federal Practice ¶ 4.25[6], at 4-272 (2d ed. 1982); Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1159 (5th Cir. 1983). It has long been recognized, however, that in some circumstances a close relationship between a parent and its subsidiary may justify a finding that the parent "does business" in a jurisdiction through the local activities of its subsidiaries. See, e.g., Walker v. Newgent, 583 F.2d 163, 167 (5th Cir.1978); Prod. Promotions, Inc. v. Cousteau, 495 F.2d 483, 492 (5th Cir.1974); Turner v. Jack Tar Grand Bahama, Ltd., 353 F.2d 954, 956 (5th Cir. 1965). If the parent corporation exerts such domination and control over its subsidiary, then "they do not in reality constitute separate and distinct corporate entities but are one and the same corporation for purposes of jurisdiction." Hargrave v.
The Fifth Circuit has relied on the "alter ego rule" that is generally used to pierce the corporate veil also to determine personal jurisdiction. Walker v. Newgent, 583 F.2d 163, 167 (5th Cir.1978); Gutierrez v. Raymond Int'l, Inc., 484 F.Supp. 241, 253 (S.D.Tex.1979). The presumption is that a subsidiary, even a wholly-owned subsidiary, is independent of its parent company for jurisdictional purposes. Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 338 (5th Cir.1999). This presumption can be overcome by clear evidence. Id. Such clear evidence requires an additional or a `plus' factor, "something beyond the subsidiary's mere presence within the bosom of the corporate family." Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 338 (5th Cir.1999) (quoting Donatelli v. National Hockey League, 893 F.2d 459, 465 (1st Cir.1990)).
In Hargrave, the Court of Appeals set out factors to be considered in deciding whether a parent company can be held amenable to personal jurisdiction because of the acts of a subsidiary. The Hargrave factors consider (1) how much of the subsidiary's stock is owned by the parent; (2) whether the two corporations have separate headquarters; (3) if they have common officers and directors; (4) whether the parent and subsidiary observe corporate formalities; (5) whether they maintain separate accounting systems; (6) whether the parent exercises complete authority over general policy; (7) and whether the subsidiary exercises complete authority over daily operations. Hargrave, 710 F.2d at 1160, cited by Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 339 (5th Cir.1999). A court should consider the totality of circumstances, rather than a single factor, to determine whether jurisdiction is proper. PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 176 (Tex.2007).
Although the burden is on the party seeking to invoke the power of the court to prove that jurisdiction exists, a prima facie showing suffices, and jurisdiction need not be established by a preponderance of the evidence. Walk Haydel & Associates, Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241 (5th Cir.2008). All uncontroverted allegations in the complaint must be taken as true, and all conflicts between the facts contained in the parties' affidavits and other evidence must be resolved in favor of the party asserting jurisdiction. Cent. Freight Lines Inc. v. APA Transp. Corp., 322 F.3d 376, 380 (5th Cir.2003). "The court may determine the jurisdictional issue by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.'" Allred v. Moore & Peterson, 117 F.3d 278, 281 (5th Cir. 1997) (quoting Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir.1985)).
The EEOC puts forward evidence of common ownership and officers, but not sufficient evidence to establish personal jurisdiction over BPI. The EEOC contends that specific jurisdiction exists through a theory of alter egos. In other words, the EEOC argues that BPI is an alter ego of BPOW, and thus, the contacts of BPOW can be imputed to BPI to satisfy personal jurisdiction. The EEOC argues that all three Defendants are commonly owned, operate out of a shared corporate headquarters, and share officers and directors. The EEOC provides an affidavit from Connie K. Wilhite, a trial attorney for the EEOC, stating that all three corporations are owned by one individual, Johnny Morris, and share the same president, James Hagale. Additionally, the EEOC alleges that BPI and BPOW share board members.
Even taking the EEOC's allegations as true, the EEOC does not show that BPI controlled its subsidiary, BPOW, to such a degree that the activities of BPOW are fairly attributable to BPI. Even 100% stock ownership and commonality of officers and directors are insufficient to establish an alter ego relationship between two corporations. Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1160 (5th Cir.1983); Gardemal v. Westin Hotel Co., 186 F.3d 588, 594 (5th Cir.1999) (one hundred percent ownership and identity of directors and officers are, even together, an insufficient basis for applying the alter ego theory to pierce the corporate veil). Similarly, a common corporate headquarters is not sufficient to establish alter ego liability. Global 360, Inc. v. Spittin' Image Software, Inc., CIV.A3:04-CV-1857-L, 2005 WL 625493 (N.D.Tex. Mar. 17, 2005)
The EEOC alleges that BPOW and BPI owner Morris exercised control over the day-to-day operations, claiming that he was intimately involved in many of the daily decisions of BPOW stores. However, the evidence provided by the EEOC does not go that far. The EEOC presents one phone interview that includes the statement "whenever I called corporate it seemed to me that everyone was waiting for Johnny Morris to make the decision" and a declaration from an employee that, in 2007, she may have spoken to Johnny Morris to complain about another employee, though she was not sure if it was he.
Some control over the subsidiary is part of the normal framework of a parent-subsidiary relationship, and the blending of corporate activities is insufficient to show that the subsidiary is an alter ego of the parent. N. Am. Van Lines, Inc. v. Emmons, 50 S.W.3d 103, 120 (Tex.App.2001); Gardemal v. Westin Hotel Co., 186 F.3d 588, 594 (5th Cir.1999) (plaintiff must show such domination of finances, policies and practices that the controlled corporation has no separate mind, will or existence of its own and is but a business conduit for its principal). Even taking the EEOC's facts in the most favorable light, Morris's control over BPOW is not sufficient to establish alter ego jurisdiction. In Global 360, a case with similar facts, the plaintiff had presented sufficient evidence to demonstrate that Ken Davies was the president of both the parent and subsidiary corporation, and exercised authority over all general policies and daily operations of the corporate defendants. Global 360, 2005 WL 625493, at *1. Still, the court did not find that the activities of the subsidiary could be fairly attributable to the parent, and thus did not find personal jurisdiction. Id. The Court finds that the EEOC falls short of the mark in producing sufficient evidence to demonstrate that Morris exercised "complete control" over BPOW, which is the level required by the Hargrave factors.
Although the EEOC insists that BPI and BPOW are fused, it offers as evidence nothing more than various printouts from third-party websites.
The Court acknowledges that the EEOC put forward other pieces of evidence demonstrating the relationship between BPOW and BPI. The evidence included a shared website, recruitment forms, training, and staffing procedures. However, this evidence — even in its totality — is not sufficient to constitute the `plus' factor and subject BPI to personal jurisdiction in Texas. In cases with comparable facts, courts have not found alter ego jurisdiction. Conner v. ContiCarriers & Terminals, Inc., 944 S.W.2d 405, 419 (Tex.App. 1997) (shared office headquarters, salaried employees on the same payroll system, shared bank account, shared officers, and fifty percent of revenue generated from subsidiary were not sufficient to assert jurisdiction over parent corporation); Global 360, Inc. v. Spittin' Image Software, Inc., CIV.A3:04-CV-1857-L, 2005 WL 625493 (N.D.Tex. Mar. 17, 2005) (shared stock ownership, office space, same president, managing director, bookkeeper, and sole employee, eighty percent of stock ownership by parent, closely related accounting systems were insufficient to establish alter ego jurisdiction); BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 799 (Tex.2002) (consolidated financial report, shared financial assistance, shared office space, shared recruitment process, same letterhead was not sufficient).
Additionally, the Court notes that the EEOC has not alleged that BPI and BPOW shared financial assets. The importance of this factor is encapsulated in two of the Hargrave factors — whether the corporations observed corporate formalities and whether they maintained separate accounting systems. Although the EEOC alleges that BPOW generated more than 75% of BPI's total revenue, this does not mean that there was a breakdown of corporate formalities or that they had the same accounting system. The EEOC bears the burden of establishing that BPI's control over BPOW's budget is such that they "functionally became the same entity." Administrators of Tulane Educ. Fund v. Ipsen, S.A., 450 Fed.Appx. 326, 332 (5th Cir.2011); Jackson v. Tanfoglio Giuseppe, S.R.L., 615 F.3d 579, 586 (5th Cir.2010). Thus, the Court concludes that the exercise of jurisdiction over BPI would violate "traditional notions of fair play and substantial justice." Asahi, 480 U.S. at 113, 107 S.Ct. 1026.
That leaves the question of whether further discovery should be authorized. The Court previously granted leave for parties to supplement the record with affidavits and other evidence tending to show personal jurisdiction over BPI. The EEOC has not alleged with any specificity the additional facts regarding BPI it would hope to obtain through further discovery.
However, the Court does find that additional discovery regarding Tracker's relationship to this case is warranted. In Defendants' Supplemental Briefing, Defendants assert that Tracker should also be dismissed for lack of personal jurisdiction, but the EEOC has not had the opportunity to fully engage in discovery regarding Tracker's relationship to the case. Defendants misidentified Tracker on Defendants' Certificate of Interested Parties, rather than Tracker Marine Retail, LLC, the correct entity. Until August 24th, 2012, this error was not corrected and Plaintiff was unaware of the error. When the existing record is inadequate to support personal jurisdiction and a party demonstrates that it can supplement its jurisdictional allegations, more discovery is appropriate. Estate of Manook v. Research
For the foregoing reasons, the Court concludes that Defendants' Motion to Dismiss BPI for lack of personal jurisdiction should be
