Xuan Lu v. SAP Am., Inc.

Court of Appeals for the Sixth Circuit·Decided October 24, 2022·No. 22-1253·Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 22a0431n.06

Case No. 22-1253

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

FILED

) Oct 24, 2022 XUAN LU, DEBORAH S. HUNT, Clerk )

Plaintiff-Appellant, )

) ON APPEAL FROM THE v. ) UNITED STATES DISTRICT ) COURT FOR THE EASTERN SAP AMERICA, INC., et al., ) DISTRICT OF MICHIGAN Defendant-Appellee. )

) OPINION

Before: McKEAGUE, THAPAR, and READLER, Circuit Judges.

McKEAGUE, Circuit Judge. Xuan Lu, a Chinese citizen temporarily residing and working in Michigan, sued her employer, SAP America, for discrimination, retaliation, and intentional infliction of emotional distress under both federal and Michigan law. The district court granted SAP America’s motions to set aside default and to dismiss on the ground of forum non conveniens, and Lu appealed. Because we find that there was no clear abuse of discretion, we affirm.

I

A. Background Plaintiff-Appellant Xuan Lu is a Chinese citizen residing in the United States for six months out of the year pursuant to a valid green card. On March 2, 2015, Lu was hired by SAP (China) Co., Ltd. (formerly SAP Beijing Software System Co., Ltd., hereinafter “SAP China”) as a Global Legal Compliance Officer. Her Employment Contract listed Beijing, China as her work

location and contained a labor dispute provision mandating arbitration, mediation, and/or litigation of all labor disputes in the Chinese courts.

For the first three years of her employment, Lu lived and worked in Beijing, China under the direct supervision of Vivianne Gordon-Puller and Hanno Hinzmann. During that time, she was considered an “outstanding employee” and consistently received large bonuses.

In May 2018, Lu was assigned to a new supervisor, Azmeen Moiz, who lived and worked in Singapore. While under Moiz’s supervision, Lu requested to spend time in the United States in order to be with her son. She obtained approval to begin working remotely from Michigan for six months out of the year. Defendant-Appellant SAP America, Inc. (hereinafter “SAP America”) sent a letter to Lu, acknowledging Lu’s plans to work from the United States. The letter stated in part: “SAP America, Inc. recognizes that you will work in the United States remotely from home and not in a[] SAP office location for [six months] and at SAP (China) Co., Ltd., Beijing Branch for [six months] in each calendar year.” SAP America further acknowledged that Lu’s work would “primarily be for the benefit of SAP China in [her] current role of Lead Senior Legal Counsel” and that she would “continue to report to current manager, Moiz Azmeen, during [her] time in the U.S.”

When Lu began working in the United States, the time difference routinely required her to attend mandatory Skype meetings in the middle of the night. Lu had been diagnosed with lupus and these late-night meetings aggravated her symptoms of insomnia and fatigue. Because she found attending Moiz’s required meetings “extremely difficult and debilitating,” Lu requested an accommodation.

Moiz rejected her request, but according to Lu, this was only the beginning. Moiz allegedly proceeded to retaliate and discriminate against Lu on the basis of her disability by failing to provide

her with vacation time, ignoring her leave requests, not assigning her any business travel, and paying her smaller annual bonuses than her Indian coworkers. According to Lu, Moiz also often yelled at her, sought negative feedback about her from her colleagues, and falsely accused her of various errors.

Lu complained of Moiz’s conduct to Hinzmann, Moiz’s supervisor who was based in Germany, but Hinzmann took no action. Moiz then placed Lu on a ninety-day “Performance Improvement Plan” (PIP), which Lu argues was “patently false.” When Lu again complained of Moiz’s discriminatory conduct, this time to Hinzmann’s supervisor, Gordon-Puller, Gordon-Puller simply told Lu to comply with the PIP. Ultimately, Lu contacted Human Resources, and in November 2019, Lu’s presence was requested at an in-person meeting in China, purportedly to review her PIP. Lu repeatedly requested sick leave to excuse her attendance, but was told she would be fired if she failed to attend the meeting.

On November 18, 2019, Lu attended the PIP meeting, despite her ongoing illness.

However, no PIP review was conducted. Instead, Lu was given a termination letter that vaguely referenced alleged violations of company policy. Believing her termination was discriminatory and in violation of Chinese employment law, Lu complied with her Employment Contract’s labor- dispute provision and filed a complaint with the Labor Arbitration Committee in Chaoyang District, Beijing against SAP China. Lu sought reinstatement of her employment, compensation for lost salary, her Y2019 annual target bonus, the difference between her Y2019 and Y2018 bonuses, and payment of “Move SAP,” a form of equity granted by SAP S.E. On August 20, 2020, the Labor Arbitration Committee awarded Lu reinstatement, her lost salary, and her Y2019 bonus, but denied her remaining claims. Both Lu and SAP China challenged the award by filing suit in

the People’s Court of Chaoyang District, Beijing. At the time of the district court’s decision in the case underlying this appeal, that matter against SAP China remained pending in the Chinese courts.

B. Procedural History On April 9, 2021, Lu filed suit in the United States District Court for the Eastern District of Michigan against SAP America, SAP China and SAP S.E.—who she collectively refers to as her “joint employers.” She brought claims for disability, racial and national origin discrimination; retaliation; and intentional infliction of emotional distress under federal and Michigan law. On July 6, 2021, Lu sent copies of the summons and complaint to SAP America’s resident agent, the Corporation Company, via overnight mail, signature required, and certified mail, return receipt requested. When SAP America failed to answer, on July 8, 2021, the district court ordered Lu to show cause why the case should not be dismissed for failure to prosecute. Lu responded by providing tracking numbers indicating her previous mailing of the summons and complaint to SAP America’s resident agent. In that same response, Lu also requested that the court extend her summons for one year as to SAP China and SAP S.E. to allow for service under the Hague Convention. SAP America is the only defendant involved in this appeal.

On August 17, 2021, Lu filed a Request for Clerk’s Entry of Default against SAP America for failure to plead or otherwise defend. The court promptly entered the Clerk’s Entry of Default as to the defendant corporation. Almost four months later, on December 21, 2021, Lu served SAP America’s resident agent with the Clerk’s Entry of Default.

Thereafter, SAP America filed a Motion to Set Aside Default. The corporation argued that service was improper and that it could demonstrate good cause under Federal Rule of Civil Procedure 55(c). SAP America also filed a Motion to Dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) or, alternatively, under the doctrine of forum non

conveniens. On March 3, 2022, the district court granted SAP America’s Motion to Set Aside Default and its Motion to Dismiss on the basis of forum non conveniens. This appeal followed.

II

We turn first to SAP America’s Motion to Set Aside Default. On appeal, Lu argues that the district court abused its discretion in setting aside the default against SAP America because service of process was proper under Michigan law. It was not. Because Lu only mailed copies of the summons and complaint to SAP America’s resident agent and did not accompany those mailings with any form of personal service, Lu failed to comply with the methods for service of process allowed by the Federal Rules and Michigan law. Accordingly, the district court did not abuse its discretion when it granted SAP America’s Motion to Set Aside Default.

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Xuan Lu v. SAP Am., Inc., (6th Cir. 2022).

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