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U.S. Equal Employment Opportunity Commission v. MJC, Inc.

United States District Court, D. Hawaii

January 24, 2018



          Susan Oki Mollway, United States District Judge.


         Plaintiff Equal Employment Opportunity Commission (“EEOC”) complains that Defendants MJC, Inc., and GAC Auto Group, Inc., which separately or together own or operate a car dealership, violated the Americans with Disabilities Act (“ADA”) by failing to hire Ryan Vicari because he had a hearing disability. Defendants move to stay the proceedings on the ground that the EEOC allegedly failed to engage in the informal conciliation process mandated by 42 U.S.C. § 2000e-5, which is a condition precedent to an EEOC lawsuit. Defendants also move to dismiss the Complaint for failure to state a claim, arguing that the Complaint fails to adequately allege that Vicari is a “qualified individual” under the ADA.

         The court declines to issue a stay but grants the motion to dismiss. Defendants fail to meet their burden as movants of showing that a stay is warranted. This court does, however, dismiss the Complaint because it fails to allege facts tending to show that Vicari is a qualified individual under the ADA.


         Defendants are two Hawaii corporations, GAC Auto Group, Inc., and MJC, Inc., and some of their unidentified employees (“Does 1-10” in the Complaint). ECF 1, PageID #s 2-3. GAC Auto Group is the legal name of a car dealership doing business as Cutter Mazda of Honolulu. See Id. at PageID # 3. GAC Auto Group is wholly owned by MJC, which, in turn, manages the dealership. Id. GAC Auto Group and MJC jointly have hiring and firing rights for the dealership. Id.

         On July 31, 2017, the EEOC filed a Complaint alleging that “Defendants have engaged in unlawful employment practices in violation of Section 102(a) and (b) of the ADA, 42 U.S.C. § 12112(a) and (b).” ECF 1, PageID #s 5, 8. The ADA provides:

No covered entity shall discriminate against a qualified individual on the basis of disability in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment.
[A qualified individual is] an individual who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.

42 U.S.C. §§ 12111(8), 12112(a).

         The EEOC alleges that Defendants failed to hire Ryan Vicari, who is deaf, “based on his actual . . . [and] perceived disability” after he “applied for [a car] detailer position with Defendants on June 24, 2015.” Id. at PageID #s 5-6. The EEOC presents the events of June 24, 2015, succinctly:

Charging Party [i.e., Ryan Vicari] was interviewed on or about [June 24, 2015, ] by Defendants. During the interview, Defendants were informed that Charging Party is hearing impaired and can read lips. In response, Defendants stated they could not hire Charging Party because he was deaf and ended the interview. Consequently, Charging Party was not considered and/or hired for the detailer position and/or any other position with Defendants.

Id. at PageID # 6. The EEOC seeks compensatory and punitive damages for Vicari, “reinstatement or front pay, ” an injunction forbidding Defendants from engaging in further disability discrimination, and an order requiring Defendants to implement prophylactic policies and programs. See Id. at PageID #s 6-7; see also 42 U.S.C. § 2000e-5(g)(1) (detailing a federal court's remedial powers under the ADA).

         Defendants deny that they failed to hire Vicari for the detailer position because he is deaf. Instead, Defendants say they truthfully advised Vicari “that there were no detailer positions available.” ECF 18-1, PageID # 76. Defendants claim that they then

interview[ed] [Vicari] for the only available position--a Service Lot Attendant. [But] [d]ue to the nature of the Service Lot Attendant position, which requires constant communication with other employees via two-way radios, often while driving, Defendants understood that Mr. Vicari would not have been able to fulfill the essential functions of the position.

Id. at PageID #s 76-77. This particular factual dispute is not currently before the court.

         Defendants have moved to stay the present action following the EEOC's alleged failure to engage Defendants in the informal conciliation process mandated by 42 U.S.C. § 2000e-5(b), which is a condition precedent to an EEOC lawsuit against an employer. See ECF 18-1, PageID #s 80-83; 42 U.S.C. § 2000e-5(b), (f)(1); see also Mach Mining, LLC v. EEOC, 135 S.Ct. 1645, 1649 (2015) (“Before suing an employer for discrimination, the Equal Employment Opportunity Commission . . . must try to remedy unlawful workplace practices through informal methods of conciliation.”). Defendants claim that the EEOC failed in fact to conciliate; they do not contest the adequacy of the Complaint's allegations on this score. See ECF 18-1, PageID # 76. Defendants' stay request is brought under Rule 7 and Rule 12(b)(1) of the Federal Rules of Civil Procedure and 42 U.S.C. § 2000e-5(f)(1). ECF 18, PageID # 73.

         Defendants have also moved under Rule 12(b)(6) to dismiss the Complaint for failure to state a claim. Defendants describe the Complaint as deficient because it fails to set forth facts tending to show that Vicari is a “qualified individual” under the ADA. Id.

         The court first assures itself of jurisdiction over this matter, then addresses the stay and the Rule 12(b)(6) matter.


         Defendants' Motion requests a stay under Rule 12(b)(1) of the Federal Rules of Civil Procedure, in addition to Rule 7 and 42 U.S.C. § 2000e-5(f)(1). See ECF 18, PageID # 73. Rule 12(b)(1) authorizes a court to dismiss claims over which it lacks subject matter jurisdiction. See Fed. R. Civ. P. 12(b)(1). At the hearing on January 8, 2018, Defendants clarified that they are not moving to dismiss for lack of subject matter jurisdiction, and are only seeking to stay this court's proceedings pending further conciliation efforts. ECF 23. The court nevertheless assures itself of its subject matter jurisdiction over this matter. See Leeson v. Transam. Disability Income Plan, 671 F.3d 969, 975 n.12 (9th Cir. 2012) (explaining that if a court lacks subject matter jurisdiction, it must dismiss the complaint, sua sponte if necessary).

         Title VII, and by extension the ADA, [1] grants this court jurisdiction over EEOC lawsuits generally. See 42 U.S.C. § 2000e-5(f)(3) (“Each United States district court . . . shall have jurisdiction of actions brought under this subchapter. Such an action may be brought in any judicial district court in the State in which the unlawful employment practice is alleged to have been committed.”). Title VII also sets forth various conditions precedent to an EEOC lawsuit against an employer. See 42 U.S.C. § 2000e-5(b). One such condition requires the agency, before it “may bring a civil action, ” to “endeavor to eliminate any . . . alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion.” Id. § 2000e-5(b), (f)(1). This court concludes that this conciliation requirement is not “jurisdictional”; that is, a federal court is not required to dismiss an ADA action for lack of subject matter jurisdiction whenever the EEOC fails to satisfy this obligation prior to filing suit. See Hamer v. Neighborhood Hous. Servs. of Chicago, 138 S.Ct. 13, 17 (2017) (explaining that a “[f]ailure to comply with a jurisdictional [requirement] . . . deprives a court of adjudicatory authority over the case, necessitating dismissal”).

         This court exercises jurisdiction regardless of whether the EEOC conciliated. Title VII empowers a court, in the event of nonconciliation, to “stay further proceedings for not more than sixty days pending . . . further efforts of the Commission to obtain voluntary compliance.” 42 U.S.C. § 2000e-5(f)(1) (emphasis added). In Mach Mining, LLC v. EEOC, 135 S.Ct. 1645, 1656 (2015), the Supreme Court declared that “the appropriate remedy [following a failure to conciliate] is to order the EEOC to undertake the mandated efforts to obtain voluntary compliance, ” given the statute's authorization of a stay for that purpose. Id. (citing 42 U.S.C. § 2000e-5(f)(1)). The Ninth Circuit, following Mach Mining, has recently held that “if the EEOC . . . failed to conciliate prior to bringing suit, the appropriate remedy [is] a stay of proceedings to permit an attempt at conciliation, not the dismissal of the aggrieved employees' claims.” Arizona ex rel. Horne v. Geo Grp., Inc., 816 F.3d 1189, 1199 (9th Cir. 2016) (emphasis added), cert. denied sub nom. Geo Grp., Inc. v. EEOC, 137 S.Ct. 623 (2017).

         The Ninth Circuit in Geo Group did not discuss its earlier ruling in EEOC v. Pierce Packing Co., 669 F.2d 605, 608-09 (9th Cir. 1982), which held that “conciliation [is a] jurisdictional condition[] precedent to suit by the EEOC, ” and which affirmed a dismissal for lack of jurisdiction. But this court need not wait for an express abrogation of Pierce Packing by the Ninth Circuit. See Miller v. Gammie, 335 F.3d 889, 900 (9th Cir. 2003) (en banc) (indicating that district courts are not bound by circuit precedent so long as “intervening Supreme Court authority is clearly irreconcilable with [the] prior circuit authority”). The court's very power to impose a stay indicates that Congress did not intend the conciliation requirement to be jurisdictional in nature. It is a time-honored principle that “without jurisdiction [a federal] court cannot proceed at all in any cause.” Ex parte McCardle, 74 U.S. (7 Wall.) 506, 515 (1869) (emphasis added). The statements in Geo Group and Mach Mining, as well as the statutory authorization to stay--not dismiss--proceedings following a failure to conciliate, make it clear that Pierce Packing has been abrogated and § 2000e-5(f)(1)'s conciliation requirement is not jurisdictional in nature.

         Mach Mining aside, Pierce Packing is also clearly irreconcilable with an additional line of Supreme Court cases stating that a clear statement of legislative intent to make a matter jurisdictional is a threshold requirement for a court's conclusion that subject matter jurisdiction is in issue. Under the rule announced in 2006 in Arbaugh v. Y&H Corp.,

if the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional, then courts . . . will not be left to wrestle with the issue. But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.

546 U.S. 500, 515-16; see Erin Morrow Hawley, The Supreme Court's Quiet Revolution: Redefining the Meaning of Jurisdiction, 56 Wm. & M. L. Rev. 2027, 2044 (2015) (identifying Arbaugh as the origin of the jurisdictional clear statement rule). Since Arbaugh, the Supreme Court has advised federal courts that, in the absence of clear congressional intent, they should not “lightly attach” the “drastic” consequences that attend labeling a statutory requirement “jurisdictional.” Gonzalez v. Thaler, 565 U.S. 134, 141 (2012); see also Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 435 (2011) (explaining that the jurisdictional clear statement rule covers even statutory provisions that are “important and mandatory”).

         Under the clear statement rule, which the Supreme Court announced decades after the Ninth Circuit decided Pierce Packing, the conciliation requirement is not “an ingredient of subject-matter jurisdiction.” See Arbaugh, 546 U.S. at 503, 514. First, the text of § 2000e-5(f)(1) does not speak in clearly jurisdictional terms. Arbaugh noted that another Title VII provision, which restricted Title VII liability to employers with “fifteen or more employees, ” did not speak in clearly jurisdictional terms. See 546 U.S. at 504 (quoting 42 U.S.C. § 2000e(b) (2006)). The conciliation provision, like Arbaugh's employee-numerosity requirement, does not by its terms “refer in any way to the jurisdiction of the district courts.” See 546 U.S. at 502 (quoting Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 394 (1982)). Compare 42 U.S.C. § 2000e-5(f)(1) (“If . . . the Commission has been unable to secure from the respondent a conciliation agreement acceptable to the Commission, the Commission may bring a civil action.”), and Id. § 2000e(b) (providing that employers are liable only if they have “fifteen or more employees”), with Id. § 2000e-5(f)(3) (defining the “jurisdiction” of federal courts under Title VII).

         Second, “clear jurisdictional language” appears elsewhere in Title VII, establishing that Congress knew how to speak in jurisdictional terms if it so desired. See Gonzales v. Thaler, 565 U.S. 134, 142-43 (2012). Arbaugh noted that the employee-numerosity requirement “appear[ed] in a separate provision” of Title VII than the expressly jurisdictional provision located in § 2000e-5(f)(3). See Arbaugh, 546 U.S. at 515 (discussing 42 U.S.C. § 2000e(b)). Similarly, the conciliation provision is in a separate area of Title VII. See 42 U.S.C. § 2000e-5(f)(1), (f)(3); Civil Rights Act of 1964, Pub. L. 88-352 § 706 (e)-(f), 78 Stat. 260-61 (1964). Congressional use of express jurisdictional language elsewhere in Title VII cautions against reading the conciliation provision as containing an additional, subtler jurisdictional limitation.

         Finally, “context, including [the Supreme] Court's interpretation of similar provisions in many years past, is relevant to whether a statute ranks a requirement as jurisdictional.” Gonzales, 565 U.S. at 142 n.3 (quoting Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 168 (2010)). This court is unaware of any Supreme Court case deeming a similar provision jurisdictional. See EEOC v. Farmers Ins. Co., 24 F.Supp.3d 956, 964 (E.D. Cal. 2014) (“[T]here is no long line of Supreme Court precedent holding that conciliation is the type of requirement that has historically been treated as jurisdictional in nature.” (quoting EEOC v. Alia Corp., 842 F.Supp.2d 1243, 1254 (E.D. Cal. 2012)). Absent such history, or a clear textual statement, this court does not deem the conciliation requirement to be jurisdictional.

         In sum, the Ninth Circuit's 1982 decision in Pierce Packing is no longer authoritative in light of intervening authority from two sources: Mach Mining and its progeny (like the Ninth Circuit's decision in Geo Group), and the line of decisions beginning with Arbaugh v. Y&H Corp. In so concluding, this court joins other district courts in this circuit. See, e.g., EEOC v. Marquez Bros. Int'l Inc., No. 1:17-CV-0044-AWI- EPG, 2017 WL 4123915, at *3 (E.D. Cal. Sept. 18, 2017) (Ishii, J.) (holding that “the requirements of Section 2000e-5(f)(1) are non-jurisdictional”); EEOC v. Evans Fruit Co., 872 F.Supp.2d 1107, 1115 (E.D. Wash. 2012) (Suko, J.) (“Title VII's conciliation requirement, while a precondition to suit, is not jurisdictional and . . . to the extent EEOC v. Pierce Packing Co. holds otherwise, it is inconsistent with current Supreme Court jurisprudence.” (citation omitted)); EEOC v. Alia Corp., 842 F.Supp.2d 1243, 1254 (E.D. Cal. 2012) (O'Neill, J.) (“Pierce Packing . . . has been fatally undermined and can no longer be reconciled with current Supreme Court jurisprudence.”).

         Satisfied that it has jurisdiction, the court now addresses whether a stay is appropriate in this case.


         A. Standard Governing Defendants' Stay Request.

         “The proponent of a stay bears the burden of establishing its need.” Clinton v. Jones, 520 U.S. 681, 708 (1997) (citing Landis v. N. Am. Co., 299 U.S. 248, 255 (1936)). In Mach Mining, the Supreme Court discussed how a court should assess a factual dispute concerning conciliation:

If . . . the employer provides credible evidence of its own . . . indicating that the EEOC did not provide the requisite information about the charge or attempt to engage in a discussion about conciliating the claim, a court must conduct the factfinding necessary to decide that limited dispute. Should the court find in favor of the employer, the appropriate remedy is to order the EEOC to undertake the mandated efforts to obtain voluntary compliance. See § 2000e-5(f)(1) (authorizing a stay of a Title VII action for that purpose).

135 S.Ct. at 1656. If, on the other hand, the employer provides no credible evidence indicating that the EEOC failed to conciliate, the court should decline to issue a ...

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