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Morgenstein v. Morgan Stanley DW Inc.

January 31, 2007


The opinion of the court was delivered by: James Robertson United States District Judge


This case involves allegations of disability discrimination in violation of the D.C. Human Rights Act and is before this court on diversity jurisdiction. Plaintiff Norman Morgenstein alleges that his former employer, Morgan Stanley, forced him to retire because of his disability, refused to accommodate his disability, and retaliated against him for asserting rights protected by the D.C. Human Rights Act. Morgan Stanley has moved to dismiss counts I and II and for summary judgment on counts I, II, and III. For the reasons set forth below, the motion for summary judgment will be granted.


Norman Morgenstein worked as a financial advisor for Morgan Stanley (MS) and its predecessor companies in the District of Columbia for more than thirty-two years before retiring on December 31, 2003. His father, Alvin Morgenstein, worked as a financial advisor in the same office. Plaintiff's primary duties were to assess his clients' financial objectives and advise his clients on how to achieve them. In February 1996, plaintiff underwent surgery for the removal of an acoustic neuroma from his left inner ear. After his operation, he experienced partial deafness, partial facial, eye, and eyelid paralysis, and balance problems. Those problems limited his ability to read and to focus on reading materials. When he returned from a four-month leave of absence, however, he resumed work on the accounts he had managed before his surgery and continued working for MS for approximately seven years.

On March 9, 2001, plaintiff received an email from Hugo Jauregui of MS's national registration department. Dkt. #16-1 at 5. Jauregui informed plaintiff that, because he had placed four accounts into a Morgan Stanley program called "investment consulting services" (ICS) in the early 1990's, he needed to obtain a District of Columbia "Series 65 Investment Advisor" license (IAR), either by taking and passing an examination or by obtaining a waiver, D.C. Regs § 1860.5.*fn2 Id. Plaintiff recalls that Paul Garipoli from MS's registration department told him that MS had tried to obtain a D.C. Series 65 license on his behalf but had been unsuccessful. Dkt. #16-1 at 6.

On April 4, 2001, with Garipoli's assistance, plaintiff wrote a letter to the D.C. Government's Department of Insurance and Securities Regulation (DISR), with a copy to MS, expressing his desire to obtain a Series 65 investment advisor license. Dkt. #8 Ex. 1. He explained that his Maryland Series 65 license*fn3 had expired in 1998, and that it was his understanding that he needed to be licensed in D.C., his "office of domicile." Id. He further explained that, because of disabilities caused by his surgery, he was unable to study or sit for the Series 65 examination. Id. For that reason, he asked to be "'grandfathered' to an Investment Advisor status within the District of Columbia." Id.

After some back and forth over DISR's concerns that plaintiff's limitations might impact his ability properly to advise his clients -- including three additional letters from Morgenstein supporting his request for a waiver -- the DISR rejected Morgenstein's request, by letter dated October 2, 2001. Dkt. #15 Ex. 19. DISR director Theodore Miles explained that plaintiff had violated D.C. securities regulations by placing the four accounts into ICS without a D.C. Series 65 license, and that the DISR was not inclined to grant waivers to applicants who had violated "the very part of the requirement [they] now ask us to waive." Id. The DISR indicated that it would reconsider the issue if MS applied for a waiver on Morgenstein's behalf, but, as Morgenstein was informed on March 25, 2002, and repeatedly thereafter, MS was unwilling to do so. Dkt. #16-1 at 8. MS declined to apply for the waiver, according to defendant, out of concerns over its potential liability to dissatisfied customers. Dkt. #15-1 at 10. MS offered to explore accommodations that would allow Morgenstein to sit for the examination, but he was not interested. Morgenstein Deposition at 220-22, Dkt. #15 Ex. 4. As of May 21, 2002, when the DISR sent an email reaffirming its decision denying Morgenstein's request for a waiver, Morgenstein understood that the waiver issue had been put "to rest." Id. at 147-49.*fn4

Meanwhile, the DISR conducted an investigation into Morgenstein's handling of the four ICS accounts, as did MS itself. MS concluded that, because Morgenstein had not received any special compensation for the four accounts, he qualified for the broker dealer exception to the Series 65 license requirement and thus had not violated any securities regulations. Dkt. #15-1 at 9, n.2; Dkt. #16-5 ¶ 32. On September 19, 2002, MS presented that conclusion to the DISR, which took no further action, Dkt. #15-1 at 9, n. 2, and to Morgenstein, who was told by his branch administrative manager, Carol Greenhalgh, that he did not need the Series 65 license to receive compensation on the four 1990s accounts. Dkt. #16-1 at 9. After receiving this news, Morgenstein continued receiving compensation on these accounts and stopped pursuing the Series 65 exam waiver. Id.

In "late 2002," Morgenstein's father retired and handed over his numerous and valuable client accounts to his son. Dkt. #16-5 ¶ 38. The combined value of these accounts was approximately $20,000,000. Id. At that time, MS was advising investors to move accounts valued at more than $100,000 into the ICS program. Dkt. #16-1 at 10. Morgenstein wanted to follow that advice with some of the accounts previously managed by his father, but he believed that, if he did so, he would no longer qualify for an exception to the Series 65 license requirement. Dkt. #16-1 at 10-11. Morgenstein thought he would need the Series 65 license after all, but, for reasons unexplained on the record, waited approximately a year to raise the issue again with MS. Dkt. #16-1 at 11. On November 20, 2003, he sent a letter to his supervisor at MS, Ronald Masci, again requesting that MS apply on his behalf for an exam waiver. Id. Four days later, Masci and Morgenstein met to discuss the letter. Dkt. #16-1 at 12.

Morgenstein states that Masci was very angry during the November 24, 2003 meeting, and that Masci "demanded that Morgenstein retire or be fired in response to his request for an accommodation." Dkt. #16-1 at 2; Dkt. #1-2 ¶ 16. Ronald Masci and Matthew Ridnouer, a MS employee who was present, remember the meeting differently. Both have testified that Masci issued no such ultimatum, but instead told Morgenstein that he was at risk of termination in any future force reduction because of his low performance numbers. Masci Deposition at 49-51, Dkt. #15 Ex. 3; Ridouer Deposition at 28-29, 31, Dkt. #15 Ex. 33. Morgenstein and Masci agree, in any event, that this was not the first time Masci expressed concerns about Morgenstein's poor job performance. He had in fact been encouraging Morgenstein to consider retirement since the spring of 2003. Morgenstein Deposition at 199-200, Dkt. #15 Ex. 4.

On December 1, 2003, Morgenstein sent Masci an email seeking confirmation of his understanding (1) that Masci would not apply for a Series 65 exam waiver on his behalf, and (2) that his only two choices were to retire or to be discharged. Dkt. #15 Ex. 34. In the same email, he notified Masci that, since he had "no other choice in the matter," he had accepted the proposed retirement package and submitted a departure date of December 31, 2003. Id. Masci's response neither explicitly confirmed nor corrected Morgenstein's understanding. Id. Instead, it simply read: "Your assumption of the date is correct. You should plan accordingly." Id.

Shortly after leaving MS, Morgenstein suffered a recurrence of his left acoustic neuroma, which was treated with radiation therapy in July, 2004. Dkt. #15-1 at 14. This recurrence exacerbated his vision problems and has prevented him from seeking additional employment. Dkt. #15-1 at 15.

On November 15, 2004, Morgenstein filed a charge of discrimination with the D.C. Office of Human Rights (DCOHR). Dkt. #15 Ex. 35. On the intake questionnaire he noted that MS declined to apply for an examination waiver on his behalf "approximately 11/2 years prior to 11/24/03[,]" apparently referencing the initial refusals during the spring of 2002. Dkt. #15 Ex. 36. He later withdrew his charge and filed a complaint in the ...

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