Stanley Johnson v. The Kroger Company

319 F.3d 858, 2003 U.S. App. LEXIS 2936, 84 Empl. Prac. Dec. (CCH) 41,421, 91 Fair Empl. Prac. Cas. (BNA) 145, 2003 WL 354844

• Court: Court of Appeals for the Sixth Circuit
• Decided: February 19, 2003
• Docket: 01-3432
• Status: Published

Opinions

GILMAN, J., delivered the opinion of the court, in which MOORE, J., joined. ROSEN, D.J., delivered a separate dissenting opinion.

OPINION

GILMAN, Circuit Judge.

Stanley Johnson, an African-American male, brought suit against his former employer, The Kroger Company, alleging that Kroger discharged him on the basis of his race. The district court granted Kroger’s motion for summary judgment, concluding that Johnson had failed to establish that the legitimate, nondiscriminatory reason given by Kroger for terminating Johnson’s employment was a pretext designed to mask racial discrimination. For the reasons set forth below, we REVERSE the judgment of the district court and REMAND the case for further proceedings consistent with this opinion.

I. BACKGROUND

A. Factual background

Johnson began working for Kroger in 1986, when he entered the company’s management-training program. After completing the program and working at two other Kroger stores in Ohio, Johnson was assigned to work as one of two comanagers at Kroger’s Portsmouth, Ohio store in 1989. He worked at the Portsmouth store through January of 1995.

At the time of Johnson’s transfer to the Portsmouth store, the manager was Don Allison and the senior comanager was Denis Kirkbridge. Allison’s first evaluation of Johnson in 1990 rated him between “marginal” and “satisfactory.” The following year, Johnson received a “satisfactory” rating, a recognition that his performance was improving. Allison also recommended that Johnson be given a pay raise in 1991.

Randy Roberts replaced Allison as the manager of the Portsmouth store in December of 1991. In addition, Paul Gaines replaced Kirkbridge as the senior coman-ager sometime in late 1991 or early 1992. Because Roberts had not supervised Johnson for most of 1991, Joe Martin, the manager of Kroger’s Zone 6, completed Johnson’s performance evaluation in February of 1992. (Kroger divides its stores into geographical “zones.”) Martin gave Johnson a “marginal” rating. According to Johnson, this rating reflected the fact that he was falsely accused of making “1-900” pay telephone calls to live-sex phone numbers from the manager’s office at the Portsmouth store. Johnson, who was the only African-American employee at the store, avers that Martin made this accusation at the beginning of Johnson’s performance-evaluation meeting.

Roberts gave Johnson a “satisfactory” rating for both 1992 and 1993, noting that Johnson’s performance was progressing. Senior Comanager Gaines, on the other hand, testified in his deposition that Johnson was an excellent comanager who had superior skills in customer and employee relations and was qualified to become a store manager. No performance evaluation was prepared for Johnson in 1994 because of personnel changes in Zone 6. But Roberts testified in his deposition that Johnson’s work was satisfactory and improving in 1994.

In January of 1995, Johnson was transferred to Kroger’s Wheelersburg, Ohio store. Wheelersburg is only 12 miles from Portsmouth, but the number of African-Americans living in the two localities differs markedly. In particular, Wheelers-burg had only 8 African-American residents in 1990, whereas 1,172 African-Americans lived in Portsmouth. Johnson expressed misgivings about moving to the Wheelersburg store because he had heard that the town had a reputation for racial intolerance, but he ultimately agreed to the transfer.

Both Portsmouth and Wheelersburg are within Zone 6, but the Wheelersburg location has only one comanager. Johnson was therefore the sole assistant to the store’s manager. He worked under the supervision of Dan Newman, the manager of the Wheelersburg store. Before Johnson began working at the Wheelersburg location, Newman spoke with Roberts about Johnson’s abilities. According to Newman, Roberts told him that Johnson lacked initiative, was useless as a coman-ager, and was the worst comanager Roberts had ever supervised.

Johnson believes that both Newman and Roberts harbored racially discriminatory views. With respect to Roberts, Johnson avers that he once overheard Roberts calling African-American men “black boys.” Similarly, when Newman learned that Johnson was going to be transferred to the Wheelersburg store, Newman told Portsmouth Senior Comanager Gaines that assigning an African-American male as the comanager of the Wheelersburg store would hurt its business because African-Americans did not shop there.

The deposition testimony of several employees who worked at the Wheelersburg store suggests that the store was not a model of racial tolerance. For example, the store’s head produce clerk testified that,. shortly before Johnson’s arrival, Newman told the employees to be careful about the jokes that they told. Several of the store’s department heads also recalled hearing employees make racial slurs. Newman also held a meeting with the store’s department heads just before Johnson’s arrival. Several of those attending the meeting testified in their depositions that Newman told them that Johnson was not very intelligent and that they would need to assist him. (Newman denies making any such disparaging remarks, but because we are reviewing the grant of Kroger’s motion for summary judgment, all contested facts must be resolved in Johnson’s favor.)

Johnson and Newman had a dysfunctional relationship from the start. According to Johnson, Newman did not introduce him to the department heads, criticized him in public, and blamed Johnson when the store ran out of products, even though another employee, a department head who was Newman’s cousin, was primarily responsible for ordering merchandise. Several employees testified that Newman had never treated Caucasian comanagers in a similar manner. These employees also said that Newman did not mentor and train Johnson in the same way that he had assisted Caucasian comanagers, but instead ignored him.

Nancy Noyes became Kroger’s Zone 6 manager in the fall of 1995. She replaced Ed McCauley, who testified in his deposition that the Wheelersburg store’s sales had improved in the months since Johnson became the comanager, and that Johnson was trying hard to do a good job. Noyes visited the Wheelersburg store in November of 1995. During that inspection, she noted that (1) the quality of the bananas was poor and the meat cases contained dark meat, but the prices had not been reduced for either of these items, (2) Johnson was unfamiliar with Kroger’s markdown policy, (3) Johnson had ordered an excessive quantity of potato chips, apparently due to a misunderstanding of Kroger’s cost-billing accounting method, and (4) the dairy department was unkempt. Johnson acknowledged that these problems existed, but contends that other employees were responsible for the deficiencies and that Noyes had higher standards than those to which he was accustomed.

According to Noyes, Newman wanted to intervene because of his concern that the poor conditions would reflect badly upon him. But Noyes encouraged Newman to refrain from taking any action so that Johnson would have the opportunity to develop his own solutions. Noyes’s next visit to the store in December of 1995 resulted in her finding many of the same problems. Johnson avers that Noyes treated him unprofessionally and disrespectfully, using a hateful tone of voice that she did not use when speaking to Caucasian employees.

Newman, working in conjunction with Noyes, prepared a performance evaluation for Johnson in January of 1996. Johnson was rated as “marginal.” The evaluation identifies some of the same problems that Roberts and Allison had noted when they had evaluated Johnson’s performance at the Portsmouth store: a failure to motivate or ensure results from department heads, lack of initiative and follow-through, and an insufficient knowledge of store operations.

Noyes discussed Johnson’s evaluation with him in February of 1996. Following her conversation, she concluded that the comanager position was not a good match for Johnson and encouraged him to consider other jobs with Kroger. Noyes told Johnson that although he was good with customers, he did not have “an analytical mind.” Several employees who worked with Johnson disagreed with Noyes’s opinion that Johnson was not suited to be a comanager. Both Gaines and Kirkbridge, for example, thought that Johnson was extremely capable. These comanagers testified in their depositions that they had both trained Johnson on paperwork duties and that Johnson learned as quickly as the other comanagers with whom they had worked. Gaines also emphasized Johnson’s superior customer-relations skills. Numerous department heads at the Wheelers-burg store similarly believed that Johnson was performing in an effective manner. They testified in their depositions that Johnson was executing his duties as well as or better than the store’s previous co-managers.

Despite these accolades, several problems at the Wheelersburg store were once again documented in June of 1996. The Zone 6 meat merchandiser discovered another meat-dating problem, and a different member of Noyes’s staff observed deficiencies such as low product levels and unkempt conditions when he visited the store. Moreover, Johnson was unable to provide Noyes with the store’s sales and budget figures when she went to the store in June, even though she had previously told Johnson that he needed to know that information.

Following these incidents, Noyes consulted with several employees who had observed Johnson’s performance, and with Mike Purdum, who worked in Kroger’s Human Resources Department. Newman, like the other employees to whom Noyes spoke, confirmed Noyes’s perception that Johnson was not performing adequately.

Noyes decided at that point to offer Johnson a service director position that would be based elsewhere in Ohio. Both Noyes and Purdum believed that the job would be better suited to Johnson’s customer-service skills. But Johnson declined the offer in August of 1996. Johnson was finally discharged from his employment with Kroger effective November 2, 1996, although he stopped working in August of that year.

According to Johnson, Kroger’s decision to offer him a nonmanagement position constituted a departure from its normal procedures. Ed McCauley, who was the Zone 6 manager when Johnson was transferred to the Wheelersburg store, testified by deposition that his practice was to transfer managerial-level employees to other stores if they were not succeeding in a particular location. But McCauley recognized that every zone manager handles personnel problems differently. Johnson nevertheless emphasized that, unlike four Caucasian managers whom McCauley transferred to other stores, Johnson’s request for a transfer was denied by Noyes. McCauley also identified four managers whom he had placed on probation or under corrective action plans before they were discharged. Johnson was never placed on such a plan.

B. Procedural background

This lawsuit was filed in the United States District Court for the Southern District of Ohio in November of 1998. Johnson’s complaint alleges that Kroger discriminated against him on the basis of his race, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2, by (1) denying him training, (2) failing to promote him, (3) retaliating against him, (4) allowing a hostile work environment to exist, and (5) discharging him. In addition, the complaint includes several state-law claims.

Kroger filed a motion for summary judgment in March of 2000. Approximately one year later, the district court granted Kroger’s motion as to all of Johnson’s federal claims and dismissed the state-law claims without prejudice. This timely appeal challenges only the district court’s disposition regarding the federal claim of a racially discriminatory discharge.

II. ANALYSIS

A. Standard of review

A district court’s grant of summary judgment is reviewed de novo. Holloway v. Brush, 220 F.3d 767, 772 (6th Cir.2000). Summary judgment is proper where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In considering such a motion, the court must view the evidence and draw all reasonable inferences in favor of the nonmov-ing party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The central issue is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

B. Racial discrimination claim

In order to establish a Title VII employment discrimination claim, a plaintiff must either present direct evidence of discrimination or introduce circumstantial evidence that would allow an inference of discriminatory treatment. Johnson v. Univ. of Cincinnati, 215 F.3d 561, 572 (6th Cir.2000) (setting forth the requirements for racial discrimination claims). Johnson contends that the record includes both direct and circumstantial evidence of discrimination. We will therefore examine both possibilities below.

1. Direct evidence of discrimination

Where a plaintiff presents direct evidence of discriminatory intent in connection with a challenged employment action, “the burden of both production and persuasion shifts to the employer to prove that it would have terminated the employee even if it had not been motivated by impermissible discrimination.” Nguyen v. City of Cleveland, 229 F.3d 559, 563 (6th Cir.2000). This court has explained that “direct evidence is that evidence which, if believed, requires the conclusion that unlawful discrimination was at least a motivating factor in the employer’s actions.” Jacklyn v. Schering-Plough Healthcare Prods. Sales Corp., 176 F.3d 921, 926 (6th Cir.1999). Consistent with this definition, direct evidence of discrimination does not require a factfinder to draw any inferences in order to conclude that the challenged employment action was motivated at least in part by prejudice against members of the protected group. Nguyen, 229 F.3d at 563 (noting that “a facially discriminatory employment policy or a corporate decision maker’s express statement of a desire to remove employees in the protected group is direct evidence of discriminatory intent”).

Johnson argues that the following statements constitute direct evidence of discrimination: (1) Newman’s comment expressing concern about the potentially detrimental effect on business of having an African-American comanager, (2) Newman’s remarks to the store’s department heads regarding Johnson’s lack of ability and intellectual shortcomings, (3) Noyes’s notation and comments in connection with Johnson’s performance evaluation that he lacked initiative, and (4) Noyes’s suggestion that Johnson should consider other positions with Kroger because he lacked “an analytical mind.”

Contrary to Johnson’s position, none of these instances compel the conclusion that Noyes’s decision to discharge Johnson was motivated by racial animus. The concern that Johnson’s presence would adversely effect the Wheelersburg store’s business, for example, does not compel the conclusion that Newman sought to have Johnson removed from the position of comanager. Deriving this purported desire from Newman’s comment requires the inferential step of concluding that because Newman held this belief, he would want to have Johnson’s employment terminated. Similarly, the comments about Johnson’s initiative and intelligence would support a finding of racial discrimination only if a factfinder were to infer that Newman and Noyes believed that Johnson lacked these traits because of his race. The need to draw such inferences prevents these remarks from constituting direct evidence of discrimination. Manzer v. Diamond Shamrock Chems. Co., 29 F.3d 1078, 1081 (6th Cir.1994) (holding that a statement of fact relating to the plaintiffs age was not direct evidence of age discrimination, because the relevance of the comment “is provided by inference”). We therefore conclude that Johnson has failed to provide any direct evidence of discrimination.

2. Whether Kroger’s explanation was a pretext to hide racial discrimination

Because Johnson has failed to present any direct evidence of discrimination, the burden-shifting approach first set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and later refined by Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), applies to the present case. Johnson v. Univ. of Cincinnati, 215 F.3d 561, 572 (6th Cir.2000). Under the McDonnell Douglas framework, the plaintiff faces the initial burden of presenting a prima facie case of unlawful discrimination. Id. The establishment of a prima facie case creates a rebuttable presumption of discrimination and requires the defendant to “articulate some legitimate, nondiscriminatory reason” for taking the challenged action. Id. at 573 (internal quotation marks omitted). If the defendant is able to satisfy this burden, the plaintiff must then “prove that the proffered reason was actually a pretext to hide unlawful discrimination.” Id.

Kroger concedes that Johnson established a prima facie case of discriminatory discharge. Likewise, Johnson concedes that Kroger articulated a legitimate, nondiscriminatory reason for terminating his employment; namely, the inability to satisfactorily perform his duties as a coman-ager. The disposition of this case thus hinges upon Johnson’s contention that the justification proffered by Kroger was a pretext designed to mask racial discrimination.

A plaintiff can refute the legitimate, nondiscriminatory reason articulated by an employer to justify an adverse employment action “by showing that the proffered reason (1) has no basis in fact, (2) did not actually motivate the defendant’s challenged conduct, or (3) was insufficient to warrant the challenged conduct.” Dews v. A.B. Dick Co., 231 F.3d 1016, 1021 (6th Cir.2000). Regardless of which option is used, the plaintiff retains the ultimate burden of producing “sufficient evidence from which the jury could reasonably reject [the defendants’] explanation and infer that the defendants intentionally discriminated against him.” Braithwaite v. Timken Co., 258 F.3d 488, 493 (6th Cir.2001) (alteration in original) (internal quotation marks and citation omitted).

Johnson does not dispute that Noyes and other Kroger employees working under her supervision documented instances of unsatisfactory conditions in the Wheel-ersburg store, even after he had been told about the problems. Thus, the first potential method of challenging an employer’s explanation — contesting its factual basis— is not available to Johnson.

In contrast, both the second and the third methods of establishing that Kroger’s explanation was a pretext intended to hide illegal discrimination are relevant in the present case. A plaintiff using the second option “admits the factual basis underlying the employer’s proffered explanation and further admits that such conduct could motivate dismissal,” but “attempts to indict the credibility of his employer’s explanation by showing circumstances which tend to prove that an illegal motivation was more likely than that offered by the defendant.” Manzer v. Diamond Shamrock Chems. Co., 29 F.3d 1078, 1084 (6th Cir.1994) (emphasis in original). The third possibility generally “consists of evidence that other employees, particularly employees not in the protected class, were not fired even though they engaged in substantially identical conduct to that which the employer contends motivated its discharge of the plaintiff.” Id.

Johnson presented the testimony of many of his coworkers in support of his contention that Kroger treated him differently than Caucasian comanagers. Several of the department heads at the Wheel-ersburg store, for example, said that Johnson fulfilled his responsibilities as well as Caucasian comanagers who had not been reprimanded, much less discharged. Gaines and Kirkbridge, both of whom had previously worked with Johnson as comanagers, were of the opinion that Johnson was quickly learning the paperwork responsibilities that Noyes identified as one of his shortcomings. Similarly, McCauley noted that the Wheelersburg store’s sales improved in the months following Johnson’s arrival. McCauley’s deposition testimony also supports Johnson’s contention that he was treated differently than Caucasian managers, because Johnson was not given the opportunity to transfer to a different store, nor was he placed on probation or under a corrective action plan prior to being discharged.

The above evidence regarding Kroger’s treatment of Caucasian managers relates to the third method of disproving what would otherwise be a legitimate, nondiscriminatory explanation for discharging an employee. But Kroger contends that because none of the allegedly comparable employees with whom Johnson seeks to contrast his treatment were supervised by Noyes, their experiences while working for Kroger are not relevant. In addition, Kroger notes that McCauley recognized that each zone manager handles personnel problems differently. The most relevant consideration, according to Kroger, is that although Noyes supervised dozens of managers and comanagers, Johnson has not identified any Caucasian managers under her authority who exhibited shortcomings similar to his own but who received more favorable treatment. Moreover, several other African-American comanagers who were supervised by Noyes testified in their depositions that they had no reason to believe that Noyes discriminated against them or against anyone else because of their race.

This court has explained that “the plaintiff and the employee with whom the plaintiff seeks to compare himself must be similar in all of the relevant aspects” in order for the two to be similarly-situated. Ercegovich v. Goodyear Tire & Rubber Co., 154 F.3d 344, 352 (6th Cir.1998) (emphasis in original) (internal quotation marks omitted). In the context of personnel actions, the relevant factors for determining whether employees are similarly situated often include the employees’ supervisors, the standards that the employees had to meet, and the employees’ conduct. Id. (noting that “[t]hese factors generally are all relevant considerations in cases alleging differential disciplinary action”). But the weight to be given to each factor can vary depending upon the particular case. Id. (explaining that courts “should make an independent determination as to the relevancy of a particular aspect of the plaintiffs employment status and that of the non-protected employee”).

Johnson relies upon Ercegovich to support his argument that his treatment should be compared not only with the managerial-level employees supervised by Noyes, but also with managers supervised by McCauley, her predecessor as zone manager. But the employees supervised by Noyes undoubtedly provide the most appropriate group of people with which Johnson’s treatment should be compared. Moreover, McCauley’s acknowledgment that zone managers handle personnel matters differently further supports the propriety of concentrating on managers whom Noyes supervised when comparing Johnson’s experiences with those of other Kroger managers. We therefore conclude that Johnson has failed to identify any similarly-situated employees who were treated differently for exhibiting managerial problems comparable to his own.

A more promising avenue from Johnson’s point of view goes back to the second method of challenging Kroger’s explanation for discharging him — that the nondiscriminatory reason given “did not actually motivate the defendant’s challenged conduct. ...” Dews v. A.B. Dick Co., 231 F.3d 1016, 1021 (6th Cir.2000). The record contains several instances that Johnson contends support a finding that Kroger was more likely than not motivated by illegal racial animus. For example, he points to Newman’s concern that having an African-American comanager would have an adverse effect on the Wheelersburg store’s business. Johnson also notes that several employees at the Wheelersburg store testified that Newman told them to cease telling racial jokes, and that some employees at the location had made racial slurs in the past.

Moreover, the record supports a finding that Newman treated Johnson less favorably than he had treated Caucasian coman-agers. Johnson and other employees testified by deposition that Newman refused to mentor or train Johnson, and instead ignored him. They also said that Newman did not introduce Johnson to department heads, criticized him in public, and blamed him for errors that occurred in areas that were the responsibility of other employees.

Kroger seeks to minimize this evidence by emphasizing that Noyes was the decisionmaker, so that any bias exhibited by Newman was irrelevant. Although remarks made by an individual who has no authority over the challenged employment action are not indicative of discriminatory intent, the statements of managerial-level employees who have the ability to influence a personnel decision are relevant. Ercegovich, 154 F.3d at 354-55 (concluding that the plaintiff presented a genuine issue of material fact as to whether the manager in question was involved in the employer’s decision to eliminate the plaintiffs position without giving him the opportunity to transfer elsewhere). Newman not only supervised Johnson on a daily basis, but also spoke with Noyes about the problems she identified during her store visits in late 1995, assisted Noyes in preparing Johnson’s performance review in January of 1996, and consulted with Noyes prior to her ultimate decision to offer Johnson a new but diminished position. Based upon these facts, we conclude that a jury could reasonably find that Newman played a significant role in Noyes’s decisionmaking process.

Kroger also contends that Newman’s concern about having an African-American comanager was an isolated statement that cannot support a finding of racial discrimination. See id. at 355 (“Isolated and ambiguous comments are too abstract, in addition to being irrelevant and prejudicial, to support a finding of age discrimination.”) (internal quotation marks and citation omitted). But Newman’s comment does not stand alone. Instead, the manner in which several employees observed him behave towards Johnson — behavior that was claimed to be distinct from his interaction with Caucasian comanagers — reinforces the possibility that Newman’s comment might have reflected racial animus. Id. at 356 (“[W]hen assessing the relevancy of an allegedly biased remark where the plaintiff presents evidence of multiple discriminatory remarks or other evidence of pretext, we do not view each discriminatory remark in isolation, but are mindful that the remarks buttress one another as well as any other pretextual evidence supporting an inference of discriminatory animus.”).

Newman’s statement must also be viewed in connection with the evidence concerning racial jokes and slurs prior to Johnson’s arrival at the Wheelersburg store. Kroger emphasizes that Newman did not listen to racial jokes, but instead told the department heads not to tell them, and that he never heard the racial slurs that other employees reportedly heard. A reasonable juror, however, could infer that Newman’s awareness of racial jokes prior to Johnson’s arrival at the store indicates that he harbored racially discriminatory views.

In addition to the evidence pertaining to the relationship between Johnson and Newman, the record is silent as to whether Noyes disciplined any employees at the Wheelersburg store other than Johnson. These employees admittedly were not similarly situated to Johnson because, with the exception of Newman, they did not have the same responsibilities or occupy managerial-level positions. But if Noyes blamed Johnson for the problems at the store without reprimanding other potentially blameworthy employees, this differential treatment, especially when viewed in conjunction with Newman’s treatment of Johnson, would permit an inference that racially discriminatory views were the actual reason that Kroger terminated Johnson’s employment.

This is admittedly a close case. We are of the opinion, however, that Johnson has presented sufficient evidence to enable a reasonable jury to conclude that Johnson would not have been discharged but for his race. Kroger, on the other hand, has produced substantial evidence that Johnson lost his job because he was not performing effectively. But the ultimate decision of whether Kroger’s proffered reason for discharging Johnson was legitimate or only a pretext intended to hide racial discrimination is a matter for the jury to determine. Based upon the record before us, we are of the opinion that the issue cannot be decided as a matter of law.

We note, however, that the dissent has reached the opposite conclusion. Although well-written and carefully analyzed, we cannot agree with its assertions that “[t]here is not a shred of evidence” that Newman’s conduct was racially motivated (Dissenting Op. at 875), and that “Newman provided no input into Noyes’s decision beyond his ability to observe Johnson’s day-to-day performance_” (Dissenting Op. at 878). The record, we believe, is not “so one-sided that [Kroger] must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

In the end, this case comes down to a judgment call about whether Johnson presented enough evidence to create a genuine issue of material fact. Even the dissent acknowledges that there is “a scintilla of evidence” that Newman was racially biased. (Dissenting Op. at 878). We would simply point out that one judge’s scintilla is another’s genuine issue of material fact that requires consideration by a jury.

III. CONCLUSION

For all of the reasons set forth above, we REVERSE the judgment of the district court and REMAND the case for further proceedings consistent with this opinion.