Casey v. Sumitomo (SHI) Cryogenics of America, Inc.

• Court: District Court, S.D. California
• Decided: August 14, 2019
• Docket: 3:19-cv-00937
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 KATHRYN CASEY, an individual, Case No.: 19cv937-CAB-BGS

12 Plaintiff, ORDER REGARDING MOTION TO 13 v. DISMISS AND TO STRIKE [Doc. No. 9] 14 SUMITOMO (SHI) CRYOGENICS OF AMERICA, INC., 15 Defendant. 16

17 On July 1, 2019, Defendant Sumitomo (SHI) Cryogenics of America, Inc. 18 (“Defendant” or “SCAI”) filed a motion to dismiss and to strike Plaintiff’s First Amended 19 Complaint pursuant to Fed.R. Civ.P. 12(f) and 12(b)(6). [Doc. No. 9.] On July 22, 2019, 20 Plaintiff Kathryn Casey (“Plaintiff”) filed an opposition. [Doc. No. 10]. On July 29, 2019, 21 Defendant filed a reply. [Doc. No. 11.] The Court finds the motion suitable for submission 22 on the papers and without oral argument in accordance with Civil Local Rule 7.1(d)(1). 23 BACKGROUND 24 Plaintiff’s claims arise from her employment with SCAI. Plaintiff was initially 25 employed by Ferran Technology as an office manager. First Amended Complaint 26 (“FAC”) ¶ 18. In October 2016, SCAI acquired Ferran Technology, and ultimately SCAI 27 28 1 became Plaintiff’s employer. Id. at ¶ 20. When Plaintiff began working for SCAI, she 2 kept her position as an office manager. Id. 3 The gravamen of Plaintiff’s FAC is that she was wrongfully terminated from her 4 employment as a result of alleged gender discrimination and retaliation for making 5 certain workplace complaints. Plaintiff alleges SCAI discriminated against her on the 6 basis of her gender by “excommunicating” her from meetings with executives from 7 SCAI’s parent company visiting SCAI’s San Diego offices, and unfavorably altering her 8 office manager job responsibilities. Id. at ¶¶ 24, 29, 43-44, 55, 153, 171. Plaintiff further 9 alleges SCAI retaliated against her for making certain complaints to management, 10 including about wage and hour irregularities and financial reporting to SCAI’s parent 11 company. See id. ¶¶ 47-52, 80-82. Plaintiff alleges SCAI thereafter “limited her job 12 duties,” “stripped her of all other office managerial duties,” and “lower[ed] her 13 performance evaluation so that her employment file could have negative marks as a 14 means of starting the process of terminating her[.]” Id. at ¶¶ 52, 55-56. Plaintiff alleges 15 that her employment was terminated on February 25, 2019. Id. at ¶ 120. 16 On May 20, 2019, Plaintiff filed a complaint against SCAI and its CEO, David 17 Dedman, alleging the following causes of action against both Defendants: (1) wrongful 18 termination in violation of public policy, (2) retaliation under Cal. Labor Code § 1102.5, 19 (3) retaliation under Cal. Labor Code § 98.6, (4) discrimination in violation of Fair 20 Employment and Housing Act (“FEHA”), Cal. Gov. Code § 12940(a), (5) retaliation in 21 violation of FEHA, Cal. Gov. Code § 12940(h), and (6) intentional infliction of 22 emotional distress. 23 On June 11, 2019, David Dedman filed a motion to dismiss all causes of action. 24 [Doc. No. 5.] On the same day, SCAI filed a motion to dismiss the fourth through sixth 25 causes of action for failure to state a claim, and to strike allegations related to SCAI’s 26 alleged concealment of financial activities from SCAI’s corporate parent and hiring of a 27 family member. [Doc. No. 4.] Rather than oppose, Plaintiff responded by filing the FAC 28 [Doc. No. 6], and then dismissed Dedman without prejudice [Doc. No. 8]. 1 The FAC alleges the same causes of action as in the complaint. Defendant seeks to 2 dismiss the fourth, fifth, and sixth causes of action for failure to state a claim. Defendant 3 also requests that the Court strike paragraphs 36(1), 37, 47 through 53, 55 through 58, 69 4 through 76, 79 and 151 from the FAC as irrelevant and improper. 5 LEGAL STANDARD 6 Under Rule 12(b)(6), a party may bring a motion to dismiss based on the failure to 7 state a claim upon which relief may be granted. A Rule 12(b)(6) motion challenges the 8 sufficiency of a complaint as failing to allege “enough facts to state a claim to relief that is 9 plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Ordinarily, 10 for purposes of ruling on a Rule 12(b)(6) motion, the court “accept[s] factual allegations in 11 the complaint as true and construe[s] the pleadings in the light most favorable to the non- 12 moving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th 13 Cir. 2008). But, a “pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation 14 of the elements of a cause of action will not do.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 15 (2009) (quoting Twombly, 550 U.S. at 555). “Determining whether a complaint states a 16 plausible claim for relief . . . [is] a context-specific task that requires the reviewing court 17 to draw on its judicial experience and common sense.” Id. at 679. 18 Generally, leave to amend a pleading “shall be freely given when justice so requires. 19 Fed. R. Civ. P. 15 (a)(2). See, e.g., Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 20 1051 (9th Cir. 2003) (“This policy is to be applied with extreme liberality.”) Dismissal 21 without leave to amend is only appropriate when the court is satisfied that the deficiencies 22 in the complaint could not possibly be cured by amendment. Jackson v. Carey, 353 F.3d 23 750, 758 (9th Cir. 2003); Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (holding that 24 dismissal with leave to amend should be granted even if no request to amend was made). 25 Pursuant to Federal Rule of Procedure Rule 12(f), the Court may strike “from any 26 pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous 27 matter.” Fed.R.Civ.P. 12(f). Motions to strike generally will not be granted unless it is clear 28 that the matter to be stricken could not have any possible bearing on the subject matter of 1 the litigation. See LeDuc v. Kentucky Central Life Insurance Co., 814 F.Supp. 820, 830 2 (N.D.Cal.1992). Allegations “supplying background or historical material or other matter 3 of an evidentiary nature will not be stricken unless unduly prejudicial to defendant.” Id. 4 Moreover, allegations which contribute to a full understanding of the complaint as a whole 5 need not be stricken. See id. 6 DISCUSSION 7 A. Sixth Cause of Action. 8 Defendant seeks dismissal of the sixth cause of action for intentional infliction of 9 emotional distress (“IIED”) on the grounds that Plaintiff has not alleged sufficient facts to 10 show SCAI engaged in any “outrageous and extreme” conduct, as required to state such a 11 claim. [Doc. No. 9-1 at 10-12.] Rather, Defendant argues, Plaintiff’s IIED claim is 12 predicated on personnel decisions which cannot serve as a basis for an IIED claim. Id. 13 Under California law, the elements of a claim for intentional infliction of emotional 14 distress are as follows: “(1) extreme and outrageous conduct by the defendant with the 15 intention of causing, or reckless disregard of the probability of causing, emotional distress; 16 (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and 17 proximate causation of the emotional distress by the defendant’s outrageous conduct.” 18 Lawler v. Montblanc North America, LLC, 704 F.3d 1235, 1245 (9th Cir. 2013) (quoting 19 Hughes v. Pair, 46 Cal. 4th 1035, 1050 (2009)). “A defendant’s conduct is ‘outrageous’ 20 when it is so ‘extreme as to exceed all bounds of that usually tolerated in a civilized 21 community.’ ” Id. “A simple pleading of personnel management activity is insufficient to 22 support a claim of intentional infliction of emotional distress, even if improper motivation 23 is alleged.” Janken v. GM Hughes Elecs., 46 Cal. App. 4th 55, 80 (1996). 24 Here, Plaintiff alleges that the conduct that caused her emotional distress was the 25 following: “Defendant Dedman was instrumental in the decision and implementation of 26 adverse actions and gender discrimination/differential treatment including, but not limited 27 to, stripping of Plaintiff’s job duties as an adverse action to where she ultimately did 28 nothing more than order lunches and clear up after the male executives were finished 1 eating, excommunicating her, and ultimately terminating her.” [FAC ¶203.] Plaintiff also 2 alleges that the motivation for such conduct was gender discrimination and whistleblower 3 retaliation. [FAC ¶207.] 4 All of this alleged conduct – stripping Plaintiff of job duties, not communicating 5 with her, terminating her employment– are personnel management activities which cannot 6 support a claim for IIED, even if the motivation for such conduct was improper. Janken, 7 46 Cal. App. 4th at 80. Therefore, the motion to dismiss the sixth cause of action for IIED 8 is GRANTED. Given that Plaintiff has already been given an opportunity to amend this 9 claim, further leave to amend is denied. 10 B. Fourth Cause of Action. 11 Defendant argues the fourth cause of action for discrimination under FEHA fails 12 because Plaintiff has not alleged any facts to show that SCAI’s alleged adverse 13 employment actions taken against her were substantially motivated by gender 14 discrimination. [Doc. No. 9-1 at 12-14.] 15 To establish a prima facie case of gender discrimination, a plaintiff must show that: 16 “(1) [s]he was a member of a protected class, (2) [s]he was qualified for the position [s]he 17 sought or was performing competently in the position [s]he held, (3) [s]he suffered an 18 adverse employment action, such as termination, demotion, or denial of an available job, 19 and (4) some other circumstance suggests discriminatory motive.” Guz v. Bechtel Nat. Inc., 20 24 Cal.4th 317, 355 (2000)(“The specific elements of a prima facie case may vary 21 depending on the particular facts.”). 22 In Harris v. City of Santa Monica, 56 Cal.4th203, 232 (2013), the California Supreme 23 Court held that a plaintiff alleging discrimination under FEHA must show that 24 discrimination was a “substantial motivating factor” for the adverse employment action, 25 rather than simply a “motivating factor.” 26 Here, Plaintiff alleges that she was treated differently because she was “perceived as 27 a nagging woman.” [FAC ¶183] She also alleges that she was “left out of meetings with 28 executives from the Japanese parent company when they visited because she is a woman, 1 and Defendants only permitted men from the management team to have any involvement 2 with the Japanese parent company executives.” [FAC ¶42.] Thus, Plaintiff has made 3 allegations that she was treated differently because of her gender. Whether these 4 allegations, if proven true, show that gender was a “motivating factor” versus a “substantial 5 motivating factor” in her termination is a question for a jury. Therefore, Plaintiff has 6 sufficiently stated a claim for gender discrimination and the motion to dismiss the fourth 7 cause of action is DENIED. 8 C. Fifth Cause of Action. 9 Defendant argues the fifth cause of action for retaliation fails because Plaintiff does 10 not allege a causal connection between any gender-related protected activity and SCAI’s 11 alleged adverse employment action taken against her. [Doc. No. 9-1 at 14-15.] 12 The FEHA prohibits retaliation against “any person.” Cal. Gov't Code § 12940(h). 13 To establish a prima facie case of retaliation under the FEHA, plaintiff must show: (1) she 14 engaged in a protected activity; (2) she was subject to an adverse employment action; and 15 (3) there was a causal link between the protected activity and the adverse action. Yanowitz 16 v. L'Oreal USA, Inc., 36 Cal.4th 1028 (2005). To establish unlawful retaliation, the plaintiff 17 must “establish that unlawful retaliation was a substantial factor motivating the adverse 18 employment action.” Yau v. Saint Francis Mem'l Hosp., No. 13–cv–02558 DMR, 2015 19 WL 3639521, at *11 (N.D. Cal. June 11, 2015) (citing Harris v. City of Santa Monica, 56 20 Cal.4th 203, 225, 152 Cal.Rptr.3d 392, 294 P.3d 49 (2013)) (internal quotation marks 21 omitted). 22 Defendant acknowledges that Plaintiff alleges that she engaged in protected activity 23 (“reported to management that she was being treated less favorably as a woman”) in 24 February 2018. [Doc. No. 9-1 at 14; FAC ¶45.] Defendant argues that Plaintiff also alleges 25 that she was terminated a year later and that, such a lengthy passage of time, precludes any 26 inference that the termination was a result of Plaintiff’s protected activity. [Doc. No. 9-1 27 at 14.] 28 1 An inference of causation may arise based on the timing of an adverse employment 2 action. Passantino v. Johnson & Johnson Consumer Products, Inc., 212 F.3d 493, 507 (9th 3 Cir.2000) (“when adverse employment decisions are taken within a reasonable period of 4 time after complaints of discrimination have been made, retaliatory intent may be 5 inferred”). In particular, where an adverse employment action occurs “close on the heels” 6 of the protected activity, the timing alone may be sufficient to support an inference of 7 causation. Ray v. Henderson, 217 F.3d 1234, 1244 (9th Cir.2000) (holding on summary 8 judgment that causation could be inferred based on timing of adverse employment actions). 9 Even where the time that elapses between the protected activity and the adverse 10 employment action is not short enough to support an inference of causation, however, a 11 plaintiff may demonstrate causation “if between these events the employer engages in a 12 pattern of conduct consistent with retaliatory intent.” Wysinger v. Automobile Club of 13 Southern California, 157 Cal.App. 4th 413, 421 (2008). “[T]he collective impact of a series 14 of retaliatory acts may constitute sufficient adverse employment action even if some of the 15 acts individually would not.” Id. at 421 (holding that undeserved negative job reviews, 16 reductions in staff, ignoring the plaintiff's health concerns, and “acts that caused the 17 plaintiff substantial psychological harm” constituted “a pattern of conduct, the totality of 18 which constitute[d] and adverse employment action”); see also Green v. Laibco, LLC, 192 19 Cal.App. 4th 441, 455–456 (2011). 20 Here, Plaintiff alleges that, after her protected activity, she had her job duties 21 stripped [FAC¶ ¶55, 56, 69, 74, 78, 113] received unwarranted scolding [FAC ¶¶51, 93], 22 and was given falsified negative job reviews [FAC ¶¶52, 53.] These alleged actions are 23 sufficient to show “a pattern of conduct consistent with retaliatory intent.” Wysinger, 157 24 Cal.App.4th at 421. Therefore, the motion to dismiss the fifth cause of action is DENIED. 25 D. Motion to Strike. 26 Defendant argues that Plaintiff’s allegations that she lodged reports about executives 27 “hiding capital and hiding spending activities from [SCAI]”s corporate parent company in 28 Japan,” should be stricken because she does not allege what statute, rule or regulation may 1 have been violated by such alleged conduct and, therefore, those allegations cannot be the 2 basis of a whistleblower claim. [Doc. No. 9-1 at 17-19.] 3 A claim for violation of Labor Code section 1102.5 (California’s whistleblower 4 statute) requires “(1) the plaintiff establish a prima facie case of retaliation, (2) the 5 defendant provide a legitimate, nonretaliatory explanation for its acts, and (3) the plaintiff 6 show this explanation is merely a pretext for the retaliation. [Citations.]” Manavian v. 7 Department of Justice, 28 Cal.App.5th 1127, 1141 (2018). To establish the first element, 8 the plaintiff must show (1) the plaintiff engaged in protected activity, (2) the defendant 9 subjected the plaintiff to an adverse employment action, and (3) there is a causal link 10 between the two. Id. An employee engages in activity protected by the statute when the 11 employee discloses “ ‘reasonably based suspicions’ of illegal activity. [Citation.]” Green 12 v. Ralee Engineering Co., 19 Cal.4th 66, 87 (1998). “To have a reasonably based 13 suspicion of illegal activity, the employee must be able to point to some legal foundation 14 for his suspicion—some statute, rule or regulation which may have been violated by the 15 conduct he disclosed. [Citation.]” Fitzgerald v. El Dorado County, 94 F.Supp.3d 1155, 16 1172 (E.D. Cal. 2015). 17 In this case, in the subject paragraphs, Plaintiff alleges that she lodged reports 18 about executives “hiding capital and hiding spending activities from SUMITOMO’s 19 corporate parent company in Japan . . . in order to appear more profitable than it was. . .” 20 [FAC ¶36(1)], and that she “reasonably believed it was illegal for executive management 21 to hide finances and spending activities from the parent company (as she reasonably 22 believed the same to amount to fraud, among other violations of the law)” [FAC ¶37]. 23 Although Plaintiff does not expressly allege that she believed Defendants were violating 24 or not complying with a specific state or federal law, Labor Code section 1102.5, 25 subdivision (b), does not require such an express statement. It requires only that an 26 employee disclose information and that the employee reasonably believe the information 27 discloses unlawful activity. Lab. Code, § 1102.5, subd. (b); Ross v. County of Riverside, 28 36 Cal.App.5th 580, 593 (2019). Here, Plaintiff alleges she reasonably believed the acts 1 || constituted fraud, and fraud can certainly be a crime. See e.g., Cal. Penal Code §532. 2 || Whether it was reasonable for Plaintiff to believe that the alleged actions constituted 3 || criminal fraud is a jury question. Moreover, Defendant has not shown that the “matter to 4 ||be stricken could not have any possible bearing on the subject matter of the litigation,” or 5 || that the subject allegations are “unduly prejudicial to defendant.” LeDuc, 814 F.Supp. at 6 || 830. Therefore, the motion to strike is DENIED. 7 CONCLUSION 8 For the reasons set forth above, the Court ORDERS AS FOLLOWS: 9 (1) the motion to dismiss is GRANTED as to the sixth cause of action for 10 intentional infliction of emotional distress without leave to amend; 1] (2)The motion to dismiss the fourth and fifth causes of action is DENIED. 12 (3) The motion to strike is DENIED; 13 (4) Defendant shall answer the FAC, as amended by this Order, by September 6, 14 2019. 15 IT IS SO ORDERED. 16 Dated: August 14, 2019 € BE 17 Hon. Cathy Ann Bencivengo 18 United States District Judge 19 20 21 22 23 24 25 26 27 28