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Beckmann v. Ito

United States District Court, D. Hawaii

January 3, 2002

BRYAN W. BECKMANN, Plaintiff,
v.
GORDON I. ITO, et al., Defendants.

          ORDER GRANTING THE STATE DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS AND TO DISMISS THE SECOND AMENDED COMPLAINT; AND GORDON I. ITO AND KATHLEEN H. NAKASONE'S, IN THEIR INDIVIDUAL CAPCACITIES, SUBSTANTIVE JOINDERS

          Alan C. Kay Sr. United States District Judge

         For the reasons set forth below, the Court GRANTS the Motion for Judgment on the Pleadings and to Dismiss the Second Amended Complaint filed by Defendants Department of Commerce and Consumer Affairs of the State of Hawaii; Gordon I. Ito and Kathleen H. Nakasone, in their official capacities; and Colleen L. Chun, Paul S.K. Yuen, and Martha C. Im, in their official and individual capacities, ECF No. 30, and GRANTS the substantive joinders thereto filed by Defendants Gordon I. Ito and Kathleen H. Nakasone, in their individual capacities, ECF Nos. 34, 37 (defendants, collectively, the "State Defendants;" and the motions, collectively, "Motion" or "Mot.").

         FACTUAL BACKGROUND..............................................1

         PROCEDURAL BACKGROUND...........................................8

         STANDARD.......................................................14

         DISCUSSION.....................................................18

         I. The Substantive Joinders...............................19

         II. Undisputed Grounds.....................................21

         III. Statute of Limitations and the Continuing Violation Doctrine...............................................24

         a. Counts ONE through TEN...............................2 5

         1. The Limitations Period............................25

         2 . The Continuing Violation Doctrine.................29

         3. The GEICO Case Ban is a Discrete Act..............30

         4. Hostile Work Environment and the Continuing Violation Doctrine................................32

         5. When the Limitations Period Commenced for the GEICO Case Ban..........................................34

         b. Count THIRTEEN.......................................37

         IV. Sovereign Immunity.....................................39

         a. Eleventh Amendment Sovereign Immunity Under the ADEA (Counts THREE and FOUR)..............................3 9

         b. Eleventh Amendment Sovereign Immunity Against Chapter 378 and Common Law Claims (Counts SEVEN through TWENTY-TWO...........................................41

         c. Punitive Damages.....................................43

         V. Hawaii Workers' Compensation Statute (Counts ELEVEN through TWENTY) ........................................44

         a. State and Official-Capacity Defendants...............44

         b. Individual-Capacity Defendants.......................46

         VI. Sufficiency of Allegations.............................52

         a. Tortious Interference with Employment (Count ELEVEN).53

         b. Abuse of Authority (Count TWELVE)....................56

         c. Ratification (Count FOURTEEN)........................57

         d. Harassment (Count FIFTEEN)...........................59

         e. Civil Conspiracy (Count TWENTY)......................60

         VIII. Allegation of Procedural Due Process Violation........61

         CONCLUSION.....................................................62

         FACTUAL BACKGROUND

         The following facts are taken from Plaintiff's Second Amended Complaint and, at this stage, are accepted as true. Plaintiff Bryan W. Beckmann ("Beckmann") is employed in the Insurance Division of the State of Hawaii Department of Commerce and Consumer Affairs ("DCCA"). Beckmann brings this lawsuit alleging that five DCCA employees "deliberately target[ed] him because of his protected status as a Caucasian [and] over 40 ... to achieve the singular goal of driving Plaintiff from State employment in violation of Federal and State anti-discrimination statutes, common law, and other rules and regulations . . . ." Second Amended Complaint ("SAC"), ECF No. 21, at 5.

         I. Events Concerning Beckmann's Hiring & Early Employment

         Beckmann works as an Investigator within the Compliance and Enforcement ("C&E") Branch of the State of Hawaii DCCA's Insurance Division. SAC at 7.

         Beckmann asserts that the discriminatory practices against him began immediately after he was hired in November 2012 as an Investigator III. SAC at 16. When Beckmann was offered the position, Defendant Ito, the Hawaii Insurance Commissioner, was absent and then-Chief Deputy Defendant Paul Yuen approved Beckmann's hire. SAC at 16. Shortly after Beckmann accepted the job offer, Defendant Ito requested to meet with Beckmann over Skype. SAC at 16. During the call, Defendant Ito "deliberately tried to make the job appear unattractive so [Beckmann] would rescind his acceptance." SAC at 17. Defendants Ito and Chun then conducted a criminal background check of Beckmann through the FBI database. Beckmann asserts that this background check was an improper attempt to locate information to prevent Beckmann from beginning his position even though he had already submitted to two prior FBI background checks. SAC at 17.

         Despite Defendants Ito's and Chun's attempts to keep Beckmann from starting the job, he began work on March 4, 2013. SAC at 17. On Beckmann's first day, Defendant Ito commented that Beckmann should not have been offered the position without Defendant Ito's approval. SAC at 17. Beckmann understood this to mean that "he was not welcome in the Division." SAC at 17.

         Beckmann asserts Defendant Chun next targeted him in mid-2013 by investigating Beckmann's use of a Lexis Nexis database to search his own name and his father's name. SAC at 19. Although the investigation was dropped, Defendant Chun instructed investigators not to work with Beckmann on companion investigations and to forbid Beckmann from entering the secure Fraud Branch space even though Beckmann's Filipina and Japanese colleagues were permitted to do so. SAC at 19-20.

         When Beckmann continued to collaborate with investigators in the Fraud Branch, Defendant Chun reacted in anger. She directed investigators not to view a work site with Beckmann, made fraud investigators fearful of being seen with Beckmann and shunned female colleagues who liked Beckmann. SAC at 20.

         II. Beckmann's Prior Private Detective Business

         Prior to beginning work with the DCCA Insurance Division, Beckmann had plans to open a private investigation firm in Hawaii. SAC at 15. Beckmann had obtained his Hawaii private detective license and created a website marketing his services to Hawaii. SAC at 15. When he applied for the position with the DCCA Insurance Division, Beckmann disclosed his private detective license and discussed his business website with his DCCA interviewer, Sam Thomsen. SAC at 16. As a condition of his employment, Beckmann agreed to and did obtain an opinion from the Hawaii State Ethics Commission to determine whether the private detective work would conflict with his State employment. SAC at 16, 18. The Hawaii State Ethics Commission counseled that Beckmann could not obtain new business as a private investigator and would be required to recuse himself from any investigations relating to existing clients. SAC at 18. Defendant Ito was informed of this opinion by Mr. Thomsen in June 2013. SAC at 18-19. Although Beckmann initially sought reconsideration of the advisory opinion by the Hawaii State Ethics Commissioner, he ultimately decided not to pursue a private investigation business simultaneously with his State employment because he "underestimated the time required to run a private investigation firm as a second job." SAC at 19.

         III. The Investigation Against Beckman

         Three years later, in the summer of 2016, Defendant Chun discovered Beckmann's website and reported the website to Defendant Ito. SAC at 21. Defendant Chun then bragged to her colleagues about the discovery of the website, indicating that Defendant Ito would open an internal investigation into Beckmann. SAC at 21.

         Indeed, Defendant Ito opened an internal investigation. SAC at 21. Beckmann asserts that "Defendant Ito's goal [was] fabricating a case of employment misconduct against Plaintiff." SAC at 21. All State Defendants were included in the "bogus investigation." SAC at 21. The investigation resulted in a Preliminary Investigation Report, which recommended discipline and referral of the matter to the Hawaii State Ethics Commission for review and handling. SAC at 22. Beckmann was never questioned on the matter; the Special Investigation Unit was not involved to determine whether the website was active; Beckmann was not taken up on his offer to produce his redacted tax returns showing no income from the investigation work; and Beckmann's webmaster was never interviewed. SAC at 23. Beckmann therefore asserts, "The inescapable conclusion is that no Defendant wanted to learn the answers, and risk laying waste to the investigation's flimsy foundation and destroying the Commissioner's carefully-laid discriminatory plan to rid his Division of Plaintiff." SAC at 23. According to Beckmann, the form of the investigation violated his right to due process under his union contract. SAC at 23.

         Beckmann ultimately received a charge letter and was put on a 30-day paid suspension on August 11, 2016. SAC at 24-25. He was charged with offering and soliciting services through his website in violation of Insurance Division instructions and policy. SAC at 24. Defendant Nakasone contacted Beckmann's webmaster and, although the webmaster offered an interview, Defendant Nakasone declined. SAC at 25-26.

         On August 18, 2016, Defendant Nakasone met with Beckmann and his union representative. SAC at 25. Defendant Nakasone reported that Defendant Ito was opening an ethics investigation regarding Beckmann's website. SAC at 26. That same day, Defendant Nakasone sent a letter to the Hawaii State Ethics Commission "urging it to open a second investigation" into Beckmann. SAC at 26. Defendant Im drafted the letter at Defendant Ito's direction, and the letter was signed by Defendant Nakasone and approved by Defendant Yuen. SAC at 26.

         Beckmann was instructed to return to work on September 9, 2016. SAC at 27. Because the investigation was ongoing, he was assigned to different duties. SAC at 27. Most notably, he was no longer involved in investigating cases, instead "relegated" to "a mind-numbing, undesirable assignment." SAC at 27. Beckmann took this as a "constructive[] demot[ion]." SAC at 27. When Beckmann returned, Mr. Thomsen-the now-colleague who had interviewed Beckmann for the DCCA Insurance Division position-indicated his belief to Beckmann that the charges against Beckmann were baseless. SAC at 27.

         In the course of its investigation, the Hawaii State Ethics Commission interviewed Beckmann and others. SAC at 28. The Ethics Commission found insufficient evidence to support any violation and closed the investigation on October 20, 2016. SAC at 28. Despite this outcome, Defendant Ito did not restore Beckmann to full duty and Defendant Nakasone indicated that she intended to discipline Beckmann anyway. SAC at 28-29. Beckmann was not ultimately disciplined. SAC at 29.

         On December 27, 2016, Mr. Thomsen restored Beckmann to handling complaints. SAC at 29. Defendant Nakasone nevertheless continued representing the investigation against Beckmann was still ongoing until January 6, 2017, around which time Beckmann received a letter stating the investigation was concluded. SAC at 29-30.

         IV. Beckmann's Ban from GEICO Casework

         Several of Beckmann's allegations in the SAC relate to disputes regarding his work on Government Employees Insurance Company ("GEICO") cases and a GEICO manager's personal displeasure with Beckmann. According to Beckmann, GEICO was unhappy with his "diligent efforts" investigating GEICO matters. SAC at 31. GEICO's General Manager, Defendant Timothy Dayton ("Dayton"), contacted numerous individuals at the DCCA Insurance Division seeking "to remove the pressure on GEICO." SAC at 31. Mr. Thomsen, Defendant Nakasone, and Defendant Yuen did not act on Defendant Dayton's calls. SAC at 31. Defendant Ito, however, removed Beckmann from GEICO cases after the call from Defendant Dayton in early 2017 and banned him from working on them until November 2017. SAC at 31-33.

         V. The Lawsuit

         Based on this conduct, Beckmann brings twenty-two counts against some combination of (1) the DCCA; (2) Gordon I. Ito, individually and as Insurance Commissioner for the State of Hawaii; (3) Kathleen H. Nakasone, individually and as Chief Deputy Insurance Commissioner for the State of Hawaii; (4) Paul S.K. Yuen, individually and as Chief of the Legal Branch, Insurance Division for the State of Hawaii; and (5) Martha C. Im, individually and as Staff Attorney of the Legal Branch, Insurance Division of the State of Hawaii (collectively, the "State Defendants").

         Beckmann also brings claims against Defendant GEICO and GEICO's Hawaii General Manager, Defendant Dayton. Defendants GEICO and Dayton have filed separate Motions to Dismiss not addressed in this Order.[1]

         PROCEDURAL BACKGROUND

         Beckmann filed his Complaint in this action on December 27, 2018. ECF No. 1. He filed his First Amended Complaint on March 26, 2019, and filed the SAC on April 26, 2019. ECF Nos. 10, 21. In the SAC, Beckmann asserts twenty-two causes of action:

• COUNT ONE: Race-Based Discrimination in Violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a), against Defendant State of Hawaii DCCA;
• COUNT TWO: Retaliation, in Violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-3(a), against Defendant State of Hawaii DCCA;
• COUNT THREE: Age-Based Discrimination in Violation of the Age Discrimination in Employment Act of 1976, 29 U.S.C. § 621, et seq. ("ADEA"), against Defendants DCCA, Ito, Nakasone, Chun, and Yuen;
• COUNT FOUR: Retaliation, in Violation of the ADEA, against Defendants DCCA, Ito, Nakasone, Chun, and Yuen;
• COUNT FIVE: Disparate Treatment, in Violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1), against Defendant State of Hawaii DCCA;
• COUNT SIX: Hostile Work Environment, in Violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a) (1), against Defendant State of Hawaii DCCA, and individual Defendants Ito, Nakasone, Chun, and Yuen;
• COUNT SEVEN: Race-based Discrimination, in Violation of Hawaii Revised Statutes ("HRS") § 378-2(1)(A), against Defendant State of Hawaii DCCA, and individual Defendants Ito, Nakasone, Chun, and Yuen;
• COUNT EIGHT: Age-based Discrimination, in Violation of HRS § 378-2(1)(A), against Defendant State of Hawaii DCCA, and individual Defendants Ito, Nakasone, Chun, and Yuen;
• COUNT NINE: Retaliation, in Violation of HRS § 378-2(2), against Defendant State of Hawaii DCCA, and individual Defendants Ito, Nakasone, Chun, and Yuen;
• COUNT TEN: Aiding, abetting, inciting, compelling, or coercing discrimination, in Violation of HRS § 378-2(3), against Defendants State of Hawaii DCCA, and individual Defendants Ito, Nakasone, Chun, Yuen, and Im;
• COUNT ELEVEN: Tortious Interference With Employment, against Defendant employers GEICO and State of Hawaii DCCA, and individual Defendants Dayton, Ito, Nakasone, Chun, Yuen, and Im;
• COUNT TWELVE: Abuse of Authority, against Defendants State of Hawaii DCCA, and individual Defendants Ito, Nakasone, Chun, and Yuen;
• COUNT THIRTEEN: Slander, against Defendant Chun;
• COUNT FOURTEEN: Ratification, against Defendant employers State of Hawaii DCCA and GEICO, and Individual Defendants Ito, Nakasone, Chun, and Yuen;
• COUNT FIFTEEN: Harassment, against Defendant employers State of Hawaii DCCA and GEICO, and Individual Defendants Ito, Nakasone, Chun, Yuen, Im, and Dayton;
• COUNT SIXTEEN: Negligence, against Defendant employer State of Hawaii DCCA, and Individual Defendants Ito, Nakasone, Chun, Yuen, and Im;
• COUNT SEVENTEEN: Deliberate Indifference, against Defendant employers State of Hawaii DCCA and GEICO;
• COUNT EIGHTEEN: Respondeat Superior, against Defendant employers State of Hawaii DCCA and GEICO;
• COUNT NINETEEN: Negligent Supervision, against Defendant employers State of Hawaii DCCA and GEICO, and Individual Defendants Ito, Nakasone, and Yuen;
• COUNT TWENTY: Civil Conspiracy, against Defendant employers State of Hawaii DCCA and GEICO, and Individual Defendants Ito, Nakasone, Chun, Yuen, Im, and Dayton;
• COUNT TWENTY-ONE: Intentional Infliction of Emotional Distress ("IIED"), against Defendant employers GEICO and State of Hawaii DCCA, and Individual Defendants Dayton, Ito, Nakasone, Chun, Yuen, and Im; and
• COUNT TWENTY-TWO: Negligent Infliction of Emotional Distress ("NIED"), against Defendant employers State of Hawaii DCCA and GEICO, and Individual Defendants Ito, Nakasone, Chun, Yuen, Im, and Dayton.

SAC at 34-37.

         Defendants Department of Commerce and Consumer Affairs of the State of Hawaii; Gordon I. Ito and Kathleen H. Nakasone, in their official capacities; and Colleen L. Chun, Paul S.K. Yuen, and Martha C. Im, in their official and individual capacities, filed a Motion for Judgment on the Pleadings and To Dismiss the Second Amended Complaint on May 23, 2019. ECF No 30. Defendant Gordon I. Ito, in his individual capacity, timely filed a Substantive Joinder to that motion on May 28, 2019. ECF No. 34. Defendant Nakasone, in her individual capacity, timely filed a Substantive Joinder to that motion on May 29, 2019. ECF No. 37. On September 4, 2019, Defendant Ito filed a Statement of No Opposition to Defendant Nakasone's Substantive Joinder. ECF No. 78. On September 9, 2019, Beckmann filed an Opposition to the motion and the two substantive joinders. ECF No. 80 ("Opp."). On September 10, 2019, Defendant Dayton filed a Statement of No Opposition to the motion and two substantive joinders. ECF No. 81. On September 11, 2019, Defendant GEICO filed a Statement of No Opposition to the motion and two substantive joinders. ECF No. 85. Defendants Department of Commerce and Consumer Affairs of the State of Hawaii; Gordon I. Ito and Kathleen H. Nakasone, in their official capacities; and Colleen L. Chun, Paul S.K. Yuen, and Martha C. Im, in their official and individual capacities, filed a Reply on November 7, 2019. ECF No. 100. Defendants Ito and Nakasone each filed a Reply on November 8, 2019.[2] ECF Nos. 102, 104.

         Separately, on August 15, 2019, Defendant Ito, in his individual capacity, filed a motion to disqualify Beckmann's attorney, Ms. Mary Wilkowski. ECF No. 65. That motion was granted in part and denied in part on November 6, 2019, resulting in the disqualification of Ms. Wilkowski. ECF No. 99. Because that Order was in force at the time the Motion and joinders were scheduled to be heard, the Court took the hearings off calendar to allow Beckmann to obtain new counsel. ECF No. 108. Beckmann obtained counsel to represent him at the hearing on the State Defendants' Motion, which was heard on December 5, 2019, at 11:00 a.m.

         STANDARD

         I. Motion to Dismiss ...


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