United States District Court, D. Columbia.
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For RONESHA BUTLER, Plaintiff: Gary M. Gilbert, Kevin Lee Owen, LEAD ATTORNEYS, LAW OFFICES OF GARY M. GILBERT AND ASSOCIATES, P.C., Silver Spring, MD.
For MARY JO WHITE, Chairman, Securities and Exchange Commission, Defendant: John G. Interrante, LEAD ATTORNEY, U.S. ATTORNEY'S OFFICE, Washington, DC.
Royce C. Lamberth, United States District Judge.
Before the Court is defendant Securities and Exchange Commission's (" SEC" ) motion for leave to file an amended answer  (" Def.'s Mot. Am." 1), plaintiff Ronesha Butler's opposition  (" Pl.'s Opp'n to Mot. Am." ), and the SEC's reply  (" Def.'s Reply Re: Mot. Am." ). Also before the Court is defendant's renewed motion for summary judgment  (" Def.'s Mot. Summ. J." ), plaintiff's opposition  (" Pl.'s Opp'n to Summ. J." ), and defendant's reply  (" Def.'s Reply Re: Summ. J." ). Upon consideration of the parties' arguments, the applicable law, and the entire record herein, the Court will GRANT defendant's motion to amend its answer, DENY plaintiff's requests for additional discovery and attorneys' fees, and GRANT defendant's motion for summary judgment.
Plaintiff Ronesha Butler, a black attorney, was hired by the SEC in 2003 as an attorney advisor. Compl. ¶ ¶ 9-10. She was later promoted to Senior Counsel in the SEC's Office of Market Supervision (" OMS" ), within the Trading and Markets Division. Id. From 2003 until 2008, OMS Assistant Director Nancy Burke-Sanow, a Caucasian woman, supervised Butler. Id.
In March 2005, Butler informed Burke-Sanow that she was pregnant, and Burke-Sanow responded, " Oh so, what are you going to do?" Butler Aff. Ex. 27 at ¶ 2. She later had another employee ask if Butler wanted a baby shower, which was customary at the SEC. Id. Butler perceived these comments to be racially charged. Id. When Butler subsequently requested four months of maternity leave, Burke-Sanow required Butler to fill out daily leave requests, rather than asking for a simpler extended leave form. Compl. ¶ ¶ 16-18.
When Butler returned to the SEC after her maternity leave, she was assigned administrative tasks she considered " junk work." Id. ¶ 44. She began teleworking two days per month, and on several occasions
between August 2005 and October 2006, Burke-Sanow questioned Butler about whether Butler was actually working or caring for her daughter. Compl. ¶ 35. As a result of the questioning, Butler stopped teleworking. Compl. ¶ 41.
In May 2006, the Assistant Directors, including Burke-Sanow, gave recommendations to the Associate Directors regarding merit pay raises for the May 2005 to April 2006 period. Id. ¶ 50. Although Butler received an overall acceptable rating for the period, she did not receive a merit pay increase as is customary. Id. at ¶ 51. These pay increases have previously been the subject of litigation between the SEC and the National Treasury Employees Union. In 2008, the SEC awarded the union $2.7 million as part of a settlement agreement remedying the denial of merit-step increases from 2003-2007 to black employees and employees over the age of 40. Def.'s Mot. Summ. J. Ex. 42. Butler was awarded a $1,669 increase to her base salary as well as a $3,517.74 one-time cash payment as part of the settlement agreement. Pl.'s Resp. to Def.'s Statement of Undisputed Material Facts 27.
Butler alleges several other instances of perceived hostility throughout this time period, such as making racially-charged comments about her mother, subjecting her work to great scrutiny, and making disparaging comments about her to her peers. Compl. ¶ ¶ 20, 26, 29-30. The Court addresses these in greater detail in its analysis.
On January 24, 2007, Butler filed an EEO administrative complaint against the SEC alleging that she had been subjected to racial discrimination and a hostile work environment. Compl. ¶ 64. Butler alleges that Burke-Sanow retaliated against her during these proceedings by reducing the substantive work she received as well as the overall quantity of her work. Id. ¶ 68. She was removed from working on multiple projects. Id. ¶ 71. She claims that at times she had no work, despite going door-to-door and emailing supervisors asking for work. Butler Dep. Ex. 13 at 36.
After exhausting her administrative remedies with the EEO, Butler received a right to sue letter allowing her to bring her suit in district court. On March 21, 2011, Butler filed her complaint in district court alleging harassment and discrimination on the basis of race, and retaliation. Id. at 2. Defendant's motion to dismiss was denied. See Butler v. Schapiro, 839 F.Supp.2d 252, 259 (D.D.C. 2012). The Court now considers defendant's renewed Motion for Summary Judgment and Motion to Amend its Answer.
I. Defendant's Motion to Amend Its Answer
Before the Court is defendant's motion to amend its answer. The Court considers first whether the opportunity to amend has been waived under Rule 8(c) as interpreted by the D.C. Circuit in Harris v. Secretary, U.S. Department of Veterans Affairs, 126 F.3d 339, 343-45, 326 U.S.App.D.C. 362 (D.C. Cir. 1997). Finding that it has not, the Court next considers whether the factors laid out by the Supreme Court in Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) warrant refusing amendment. Again finding that they do not, the Court will accordingly grant defendant's motion to amend its answer and deny plaintiff's request for additional discovery and associated attorneys' fees.
A. Legal Standard for Rule 15(a) Amendment
The District Court " shall freely give leave to amend the pleadings under Rule 15(a) when justice requires." Harris, 126 F.3d at 345; see also Fed. R. Civ. Pro. 15(a)(2).
The Court makes this determination " on a case by case basis." Harris, 126 F.3d at 344. Indeed, " the grant or denial of an opportunity to amend is within the discretion of the District Court, but outright refusal to grant the leave without any justifying reason appearing for the denial is [an abuse of discretion]." Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). Justification may be shown through " undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc." Id. at 182. This loose standard for allowing amendment is consistent with the spirit of the Federal Rules in that it " facilitate[s] a proper decision on the merits" rather than making " pleading a game of skill in which one misstep by counsel may be decisive to the outcome." Id. at 181-82 (internal quotation marks and citation omitted). Thus, it follows that the party opposing amendment has the burden of convincing the Court why the amendment should not be granted. E.g., Morgan v. Fed. Aviation Admin., 262 F.R.D. 5, 8 (D.D.C. 2009) (plaintiff has burden of proof where defendant moves to amend answer under 15(a)); Smith v. Cafe Asia, 598 F.Supp.2d 45, 48 (D.D.C. 2009) (defendant has burden of proof where plaintiff moves to amend complaint under 15(a)); see also Gudavich v. District of Columbia, 22 Fed. App'x 17, 18 (D.C. Cir. 2001) (noting that non-movant " failed to show prejudice from the district court's action in allowing the [movant's] motion to amend" ).
B. Forfeiture of Affirmative Defenses Under Rule 8(c)
Plaintiff's chief argument in opposition to amendment is that defendant has forfeited the affirmative defenses in question by consistently failing to plead them or amend its answer to state them. See generally Pl.'s Opp'n to Def.'s Mot. for Leave to Amend Answer. Plaintiff draws the Court's attention to Harris v. Secretary, U.S. Department of Veterans Affairs for the proposition that " a party's failure to plead an affirmative defense . . . generally results in the waiver of that defense and its exclusion from the case," and that under Rule 8(c) " a party must first raise its affirmative defenses in a responsive pleading before it can raise them in a dispositive motion." 126 F.3d 339, 343, 345, 326 U.S.App.D.C. 362 (D.C. Cir. 1997) (internal quotation marks and citations omitted). Harris suggests that the pleading requirements of Rule 8 are designed to provide notice to the parties, and rejects the practice of other circuits permitting parties " to raise affirmative defenses for the first time in dispositive motions where no prejudice is shown." Id. at 344 (citing, e.g., Blaney v. United States, 34 F.3d 509, 512 (7th Cir. 1994)). Harris finds that this practice " subtly alters the structure dictated by Rules 8(c) and 15(a)" by (1) permitting parties to strategically avoid giving notice until later in the litigation process and (2) allowing the district court to weigh only
undue prejudice rather than considering all of the potential factors listed in Foman that may weigh against amendment. Id. Instead, Harris requires that " the District Court await a request for leave to amend" before considering an affirmative defense not originally raised in the pleadings. Id. at 345. Requiring amendment provides the nonmoving party notice of a new affirmative defense and an opportunity to conduct discovery in order to establish a proper counter. Id. It also ensures that each Foman factor is given its due weight. See id.
This Court interprets Harris in the context of the present circumstances. Here, defendant has moved to amend its answer to add the affirmative defenses of " arbitrage and award" and " release." Def.'s Mot. to Amend 1. Generally, there would be no question about allowing such amendment under the forgiving standard of Rule 15(a). Here, however, defendant argued the affirmative defenses in its renewed motion for summary judgment--filed before defendant moved to amend its answer--and thus plaintiff challenges the validity of amendment. Essentially, plaintiff argues that Harris precludes amendment where defendant moves to amend its answer to add affirmative defenses after first arguing them in a summary judgment motion, but before the Court's decision on that dispositive motion. The Court disagrees with this interpretation. It is clearly the motion to amend that is crucial, not its timing. Harris, 126 F.3d at 343 n.2 (" A Rule 15 amendment, if allowed by the trial court, will cure any problem of timeliness associated with forfeiture . . . ." ); see also 6 Wright, Miller, & Kane, Federal Practice & Procedure, § 1488 (3d ed. 2014) (" Quite appropriately the courts have not imposed any arbitrary timing restrictions on requests for leave to amend and permission has been granted under Rule 15(a) at various stages of the litigation" ). Indeed, in a procedural scenario identical to this one, Judge Bates held that moving to amend even after first arguing an affirmative defense at the summary judgment stage was permissible under Harris. Nurriddin v. Goldin, 382 F.Supp.2d 79, 91-92 (D.D.C. 2005). If defendant had argued the affirmative defenses in its dispositive motion but never filed a motion to amend, Harris would certainly call for the forfeiture of defendant's affirmative defenses. See, e.g., Lerner v. District of Columbia, 362 F.Supp.2d 149, 162-63 (D.D.C. 2005). But because defendant has moved for leave to amend, this Court will consider each of the factors in Foman, including undue delay, bad faith, failure to cure deficiencies, and futility of amendment in addition to undue prejudice before allowing or denying amendment.
C. Foman Factors
To successfully resist amendment, plaintiff must show " undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc." Foman, 371 U.S. at 182. Plaintiff's opposition emphasizes potential undue prejudice and undue delay, while also implying bad faith. Pl.'s Opp'n to Mot. Amend 3-5. No amendments were previously requested or allowed, and amendment here would be substantive and certainly not futile; thus, these final two factors are not applicable to the Court's analysis.
Of the Foman factors, courts generally consider the " most important factor" to be " the possibility of prejudice to the opposing party." Djourabchi v. Self, 240 F.R.D. 5, 13 (D.D.C. 2006). To demonstrate " prejudice sufficient to justify
a denial of leave to amend the 'opposing party must show that it was unfairly disadvantaged or deprived of the opportunity to present facts or evidence which it would have offered had the amendments been timely.'" In re Vitamins Antitrust Litig., 217 F.R.D. 30, 32 (D.D.C. 2003) (quoting Dooley v. United Techs. Corp., 152 F.R.D. 419, 425 (D.D.C. 1993)) (internal quotation marks and citations omitted)). When ample time remains in discovery, a motion to amend usually does not create prejudice; however, when there is little time remaining or discovery has closed, the question often hinges on whether the amended pleading seeks to introduce new issues that would require additional discovery. See Williamsburg Wax Museum, Inc. v. Historic Figures, Inc., 810 F.2d 243, 247-48, 258 U.S.App.D.C. 124 (D.C. Cir. 1987); see also Becker v. District of Columbia, 258 F.R.D. 182, 184-85 (D.D.C. 2009). Even if new discovery would be required, the Court may exercise its discretion to allow amendment, and mitigate any resulting prejudice by awarding attorneys' fees and other costs if appropriate. See Wright, Miller, & Kane, supra, § 1488 n.27 (citing Amquip Corp. v. Admiral Ins. Co., 231 F.R.D. 197 (E.D. Pa. 2005)).
Moreover, " [undue] delay without resulting prejudice . . . is not sufficient to warrant denial of [amendment]." In re Vitamins, 217 F.R.D. at 33; Wright, Miller, & Kane, supra, § 1488 (" In most cases, delay alone is not a sufficient reason for denying leave." ). Providing " sound reason" may mitigate the effect of a substantial delay, see Becker, 258 F.R.D. at 185 (quoting Doe v. McMillan, 566 F.2d 713, 720 (D.C. Cir. 1977)); Shea v. Clinton, 288 F.R.D. 1, 6-8 (D.D.C. 2012), just as providing notice of intent to plead an affirmative defense makes delay less prejudicial, see, e.g., Harris, 126 F.3d at 343-45; Jackson v. District of Columbia, 254 F.3d 262, 267, 349 U.S.App.D.C. 185 (D.C. Cir. 2001).
Plaintiff spends approximately half a page of her opposition making conclusory statements about the prejudice that would result should the Court allow amendment. Pl.'s Opp'n to Mot. Amend 5. This hardly meets the standard of showing what specific facts or evidence plaintiff has been deprived from uncovering through discovery. See Vitamins, 217 F.R.D. at 32. Absent this explanation, it is not immediately obvious to the Court what plaintiff could possibly learn through discovery that would alter the legal question before the Court. Plaintiff has already conceded the only potentially disputable factual issue: that she did receive compensation and a salary increase as part of the arbitration agreement. Pl.'s Resp. to Def.'s Statement of Undisputed Material Facts, ECF No. 44-1 at 27. Thus, if amendment is allowed, the only question for the Court to decide is whether the arbitration award is an effective means of preclusion for this case, which will require some interpretation of statutory terms and an examination of legal precedent. The Court is equipped to perform this analysis at this time, see II.B.1, infra, and as such the additional discovery requested by plaintiff is unnecessary and will be denied. This finding indicates that there is no prejudice and that amendment should be permitted, but, to be sure, the Court continues its analysis.
While plaintiff makes much of the fact that she informed defendant of the arbitration decision from the outset of this litigation, e.g., Pl.'s Opp'n to Mot. Amend 2-4 (emphasizing " over two and a half years" ago), the Court finds it somewhat duplicitous that plaintiff would seek to use the strong language of the arbitration decision ...