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Miller v. AmCare Group, LLC

United States District Court, M.D. North Carolina

October 30, 2017

AMCARE GROUP, LLC, et al., Defendants.


          Joe L. Webster, United States Magistrate Judge

         This matter is before the Court upon Defendants AmCare Group, LLC ("AmCare") and James B. Weeks' Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and Motion for Sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure. (Docket Entry 14.) The matter is ripe for disposition. For the reasons stated herein, the Court recommends that Defendants' Motion be granted in part and denied in part, and that this matter be remanded to State court for further proceedings.


         On December 22, 2016, Plaintiff, Stacey Miller, brought this action against Defendants in the Superior Court of North Carolina for Guilford County, alleging violations of state and federal laws arising from her employment with Defendant AmCare. (See generally Complaint, Docket Entry 3.) Based on federal question jurisdiction from Plaintiffs claim that Defendants violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., Defendants removed the lawsuit to this Court. (Docket Entry 1.) On May 3, 2017, Defendants moved to dismiss the Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and sought sanctions under Rule 11. (Docket Entry 14.) Defendants' principle contention was that neither AmCare nor James Weeks, in his individual capacity, could meet the statutory definition of "employer" under Title VII, or the state law counterpart, the North Carolina Equal Employment Practices Act ("NCEEPA"), thus Plaintiffs Tide VII claim and derivative state tort law claims should fail as a matter of law and be deemed frivolous. (See Docket Entry 15.)

         Plaintiff filed a response in opposition to Defendants' Motion (Docket Entry 16), maintaining that as of that stage of litigation, there was not yet an indication that Defendant AmCare lacked the requisite number of employees to state a claim under Title VII. (See Docket Entry 17.) Defendants filed a reply in which they reasserted their position that they never employed 15 or more employees and therefore could not be an "employer" under either Title VII or the NCEEPA.[1] (Docket Entry 19.) In further support, Defendants attached the affidavit of Shirley Payton, AmCare's Accounting Manager, in which she attested that during her tenure at the company, they had only employed a work force of five to seven employees. (Docket Entry 19-1.)

         The undersigned then held a telephone conference on September 25, 2017, at which time Plaintiffs counsel conceded that Plaintiffs claim under Title VII should be dismissed. (See Minute Entry dated 9/25/2017.) As to the remaining state law claims, Plaintiff argued that they should be permitted to proceed. (Id.) The Court ordered supplemental briefing on the issue of whether the employer status is required for the remaining state law claims, and whether the Court maintains jurisdiction over the remaining state law claims. (Id.) During the telephone conference, Defendants also indicated that they were still seeking Rule 11 sanctions against Plaintiff. (Id.) On October 2, 2017, Plaintiff then filed a supplemental brief (Docket Entry 21) and Defendants filed a supplemental brief on October 9, 2017. (Docket Entry 22.)


         According to the Complaint, Plaintiff Stacy Miller was an employee at Defendant AmCare's business for several years in the role of executive assistant to Defendant Weeks, the Chief Operating Officer. (Compl. ¶¶ 4-5.) Plaintiff alleges that shortly after taking the position, Defendant Weeks began to make inappropriate sexual comments and telephone calls to her, and harassed her on the job. (Id. ¶ 5.) Plaintiff asserts that as a result of this conduct, she experienced a sense of fear and apprehension while working, and lost sleep. (Id. ¶ 18.) Plaintiff contends that she expressed her objections to this conduct directly to Defendant Weeks, but that the conduct did not cease until about April 2016. (Id. ¶ 5.) After that point, Plaintiff alleges that Defendant Weeks began a course of work-related retaliation in the form of reduction of responsibilities, and the hiring of a new assistant that Plaintiff believed to be her upcoming replacement. (Id. ¶ 6.) Plaintiff was subsequently placed on administrative leave without notice, and her employment with Defendant AmCare was terminated on September 1, 2016. (Id. ¶ 7.) Plaintiff contends that Defendant AmCare was aware of Defendant Weeks' behavior towards Plaintiff, and failed to take measures to prevent or correct the alleged sexual harassment when it was put on notice. (Id. ¶ 8.)


         A. Defendants' Motion to Dismiss

         As Plaintiff has conceded that Defendant AmCare does not employ the requisite number of employees to support jurisdiction under Title VII of the Civil Rights Act and the NCEEPA, the only claims remaining before the Court are Plaintiffs claims arising under North Carolina state law. (See Pl.'s Suppl. Br., Docket Entry 21 .)[2] Plaintiff argues that remand is appropriate for her remaining claims. (Id. at 1-2.) Defendants contend that the Court should maintain its jurisdiction pursuant to 28 U.S.C. § 1367, and find that Plaintiffs state law claims are a derivative of her Title VII claim, and therefore are pre-empted and warrant dismissal. (Defs.' Suppl. Br., Docket Entry 22 at 3-4.)

         Pursuant to 28 U.S.C. § 1367, this Court may decline to exercise supplemental jurisdiction over Plaintiffs remaining state law claims after having dismissed the Tide VII claim. 28 U.S.C. § 1367(c)(3). "It has consistently been recognized that pendent jurisdiction is a doctrine of discretion, not of plaintiffs right . . . . [I]f the federal claims are dismissed before trial, even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well." United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 (1966). When contemplating whether the exercise of supplemental jurisdiction under § 1367(c) is appropriate, courts are guided by considerations of "convenience and fairness to the parties, the existence of any underlying issues of federal policy, comity, and considerations of judicial economy." Shanaghan v. Cahill, 58 F.3d 106, 110 (4th Cir. 1995).

         When the federal claims which provided the initial basis for federal jurisdiction have been dismissed prior to trial, courts have generally found that the aforementioned factors point toward declining the exercise of supplemental jurisdiction. See Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988); see also Flanagan v. Syngenta Crop Prot., LLC, No. 1:17CV202, 2017 WL 3328168, at *8 (M.D. N.C. Aug. 3, 2017) (unpublished). In the case at hand, the sole federal claim, Plaintiffs Tide VII claim, will be dismissed. Accordingly, the Court should decline supplemental jurisdiction and remand all remaining state law claims to state court. See e.g., Ennis v. Town of Kill Devil Hills, No. 2:12-CV-9-F, 2012 WL 1473391, at *4 (E.D. N.C. Apr. 27, 2012) ("[G]iven the relatively early stage of this litigation, the court finds that the interests of comity are best served by allowing the state courts to rule on Defendants' challenges to Plaintiffs' state law claims.").

         To support their position that the Court should retain jurisdiction and dismiss Plaintiffs state law claims, Defendants rely on Rhodes v. Johnson, No. 3:13-cv-00109, 2014 WL 2531594 (W.D. N.C. June 5, 2014) (unpublished). In that case, the Court granted summary judgment on the plaintiffs state law claims of intentional infliction of emotional distress and negligent retention and supervision when the federal Title VII claims based on the same underlying conduct failed as a matter of law. Id. at *9. The Court emphasized that when the "victim of a discriminatory act [does not] allege [] a harm apart from discrimination, Title VII . .. ...

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