Opinion
05 Civ. 9479 (NRB).
August 7, 2006
MEMORANDUM AND ORDER
Plaintiff Suzanne Fahmy ("plaintiff" or "Fahmy") brings this action against Duane Reade, Inc. ("Duane Reade"), Duane Reade International, Inc. ("Duane Reade Int'l"), Anthony Cuti ("Cuti"), and James Rizzo ("Rizzo") (collectively, "defendants"). See Complaint ("Compl.") ¶ 1. Plaintiff alleges that defendants: (1) terminated her employment and discriminated against her because of her national origin; (2) unlawfully retaliated against her for her husband filing an EEOC claim; (3) violated her First Amendment rights; and (4) caused her to suffer "severe emotional distress." Id. at ¶¶ 25-32. All defendants now move, pursuant to Fed.R.Civ.P. 12(b)(6), to dismiss plaintiff's First Amendment claim and defendant Cuti moves to dismiss the intentional infliction of emotional distress ("IIED") claim.See Defendants' Memorandum of Law dated January 24, 2006 ("Defs. Mem.") at 1. Defendants also request leave to file a motion for sanctions against plaintiff's counsel pursuant to Fed.R.Civ.P. 11 ("Rule 11"). See id. For the reasons set forth below, defendants' motion to dismiss is granted and their request for leave to file a motion for Rule 11 sanctions is denied.
BACKGROUND
The following facts are drawn from the complaint and are considered true for the purposes of this motion. See Burnette v. Carothers, 192 F.3d 52, 56 (2d Cir. 1999).
In October 1998, Suzanne Fahmy and her husband, Emad Fahmy, began working at Duane Reade, a publicly traded company that owns and operates 240 retail drug and consumer convenience stores in the New York metropolitan area. See Compl. ¶ 5; Defs. Mem. at 1. Plaintiff alleges that she was harassed by reason of her national origin (Hispanic) beginning in approximately September 2001. See Compl. ¶ 8. In July 2003, plaintiff's husband filed a complaint with the EEOC against Duane Reade for discrimination, retaliation, and equal pay. See id. at ¶ 11. Plaintiff alleges that Rizzo, the Vice-President of Human Resources, responded to her husband's complaint by becoming angry at plaintiff and transferring her from the Benefits Manager position to the Office Manager position. See id. Fahmy further alleges that Rizzo removed her from her office, stationed her in a corner cubicle, and placed her under constant surveillance. See id. Despite Fahmy's numerous complaints, Rizzo refused to give her an office and forced her to conduct client meetings at her cubical, a practice that Fahmy characterizes as "very unprofessional and highly embarrassing."Id. at ¶ 13.
The events underlying Fahmy's intentional infliction of emotional distress claim against Cuti occurred in October 2004.See id. at ¶ 22. Fahmy alleges that during a staff meeting, Cuti, then the Chief Executive Officer of Duane Reade and Duane Reade Int'l, loudly asked Rizzo, "What the hell was she . . . doing at the meeting after her husband had filed a case against the company." Id. Fahmy claims that Cuti's question was loud enough for most other employees to hear and that "the situation was embarrassing and humiliating in the extreme." Id.
The events forming the basis of Fahmy's First Amendment claim occurred in January and February 2005. See id. at ¶¶ 19-20. Fahmy alleges that her husband telephoned her at work and told her that he had created a website in connection with his lawsuit against Duane Reade. See id. at ¶ 19. A few weeks later, Rizzo learned about the website and scolded plaintiff for not telling him about it herself. See id. at ¶ 20. Fahmy alleges that she told Rizzo that her husband, not she, had created the website. See id. Nevertheless, Rizzo responded to Fahmy by terminating her employment with Duane Reade. See id.
Subsequently, Fahmy attended a hearing, at which the Administrative Law Judge determined that Duane Reade had violated Fahmy's rights by wrongfully terminating her. See id. at ¶ 24. Duane Reade appealed this decision to the Unemployment Board of Appeals, which subsequently affirmed the Administrative Law Judge's findings. See id.
Plaintiff filed the complaint on November 9, 2005 asserting four counts against Duane Reade, Duane Reade Int'l, Rizzo, and Cuti. Count One alleges that defendants violated Title VII by terminating plaintiff and discriminating against her because of her national origin. See id. at ¶¶ 25-26. Count Two asserts that defendants unlawfully retaliated against her due to her husband's lawsuit and website. See id. at ¶¶ 27-28. Count Three alleges that defendants violated plaintiff's First Amendment rights because "she was terminated for her husband expressing his free opinion on the Internet." Id. at ¶ 30. Count Four asserts that plaintiff suffered "severe emotional distress by reason of the extreme and outrageous actions and conduct of the defendants." Id. at ¶ 32.
Defendants sought leave to file a partial motion to dismiss on December 15, 2005. Specifically, defendants sought to dismiss Fahmy's Title VII claims (Count One) against Rizzo and Cuti, her First Amendment claim (Count Three), and her IIED claim (Count Four) against Cuti. See Defs. Mem. at 2. Following a pre-motion telephone conference, plaintiff's counsel advised this Court that she would withdraw the Title VII claims against Cuti and Rizzo, but that she refused to withdraw the First Amendment claim or the IIED claim against Cuti. See Declaration of Stephen A. Fuchs, submitted with defendants' Memorandum of Law dated February 15, 2006 ("Fuchs Decl."), Ex. B. By letter dated December 22, 2005, defense counsel asked plaintiff's counsel to reconsider this decision, asserting that plaintiff's claims were "not warranted by existing law, or by a nonfrivolous argument for the extension, modification, or reversal of existing law, or the establishment of new law." Fuchs Decl., Ex. C at 1. In the same letter, defense counsel advised plaintiff's counsel that he could be subject to Rule 11 sanctions if he did not withdraw the First Amendment claim and the IIED claim against Cuti. See id. at 1-2. The Court was not copied on this letter.
On January 24, 2006, defendants filed a partial motion to dismiss Fahmy's First Amendment claim and her IIED claim against Cuti. See Defs. Mem. at 1. Defendants also sought leave to file a motion for Rule 11 sanctions against plaintiff's counsel for failing to withdraw these claims. See id.
DISCUSSION
I. Standard of ReviewIn considering a motion to dismiss, the Court must accept as true all material factual allegations in the complaint and draw all inferences in plaintiff's favor. Levy ex rel. Immunogen Inc. v. Southbrook Int'l Invs., Ltd., 263 F.3d 10, 14 (2d Cir. 2001). However, "[c]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Smith v. Local 819 I.B.T. Pension Plan, 291 F.3d 236, 240 (2d Cir. 2002) (quoting Gebhardt v. Allspect, Inc., 96 F. Supp. 2d 331, 333 (S.D.N.Y. 2000). A motion to dismiss may be granted only where "it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Still v. DeBuono, 101 F.3d 888, 891 (2d Cir. 1996) (quoting Allen v. Westpoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir. 1991).
II. Motion to Dismiss
A. First Amendment Claim
Plaintiff claims that defendants violated her First Amendment rights by firing her for her husband's expression of his opinion on his website. Because we find that all defendants are private entities or individuals that do not engage in any joint action with the state, we dismiss plaintiff's First Amendment claim.
"The First Amendment applies only to state actors." Loce v. Time Warner Entertainment Advance/Newhouse P'ship., 191 F.3d 256, 266 (2d Cir. 1999). In order for a plaintiff to establish a First Amendment claim against a private entity, she must demonstrate that "there is a sufficiently close nexus" between the state and the action of the private entity "so that the action of the latter may be fairly treated as that of the [s]tate itself." Tancredi v. Metro. Live Ins. Co., 378 F.3d 220, 229 (2d Cir. 2004) (quoting Jackson v. Metro. Edison Co., 419 U.S. 345, 351 (1974)). "[A]n activity may be attributable to the state: when the state exercises its coercive power or significant encouragement, when a private actor is a willful participant in joint activity with the state, when an entity is controlled by the state or an agency thereof, when an entity has been delegated a public function by the state, when an actor is entwined with governmental policies, or when the government is entwined in the entity's management or control." Gorman-Bakos v. Cornell Coop., 252 F.3d 545, 552 (2d Cir. 2001) (citing Brentwood Acad. v. Tennessee Secondary Sch. Athletic Ass'n, 531 U.S. 288 (2001)).
"In the absence of such a nexus, a finding of state action may not be premised on the private entity's creation, funding, licensing, or regulation by the government." Loce, 191 F.3d at 266. Nor may a court infer state action because a private entity's conduct merely is authorized by state law, see id., or because the entity is performing a function that serves the interests of the public, see Rendell-Baker, 457 U.S. at 842. Thus, a private defendant's mere association with the state, without more, is insufficient to establish state action or to sustain a First Amendment claim. See Leeds v. Meltz, 85 F.3d 51, 54 (2d Cir. 1996). In short, a court must dismiss a First Amendment claim if the complaint fails to present evidence "from which a rational fact-finder could infer joint action," between defendants and the state. Loce, 191 F.3d at 267.
Plaintiff has not alleged that defendants are public entities or that there is any meaningful connection between Duane Reade, its employees, and the state. The complaint does not allege that defendants are state actors nor does it provide any basis to conclude that defendants have willfully participated in joint activity with the state, that they are controlled by the state, or that they are entwined with government policies. See Gorman-Bakos, 252 F.3d at 552.
Instead, plaintiff claims that discovery may show that defendants have a "significant connection with the government in selling, distributing, and providing drugs." Pl. Mem. at 13. This argument is unavailing, as there is no inferable nexus between defendants and the state. See Loce, 191 F.3d at 267. Plaintiff's speculation that a "sufficient connection with the government could well emerge" during discovery simply is not sufficient. Pl. Mem. at 13. Even if defendants were associated with the government by virtue of Duane Reade's prescription drug business, this association, presumably based on regulation or subsidization, would not imply state action. See Blum v. Yaretsky, 457 U.S. 991, 1011 (1982) (explaining that a nursing home is not a state actor despite the fact that state-run Medicare and Medicaid programs subsidize approximately 90% of each patient's nursing home charges); Rendell-Baker, 457 U.S. at 840-43 (holding that a private school is not a state actor merely because it is partially funded and regulated by the state); see also Flaff Brothers, Inc. v. Brooks, 436 U.S. 149, 164-65 (1978) (explaining that a private storage company is not a state actor merely because the state authorized its conduct).
Plaintiff further argues that her First Amendment claim falls under the "exceptions to [the] strict rule requiring state action in First Amendment cases." Pl. Mem. at 13. For instance, plaintiff argues that her speech may constitute opposition activity, which is protected under whistleblower laws, New York common law, and the anti-retaliation provisions of Title VII.See id. at 14. However, these provisions on their face are inapplicable to plaintiff's claims because she never alleges that defendants infringed on her speech. Rather, she alleges that "she was terminated for her husband expressing his free opinion on the Internet." Compl. ¶ 30 (emphases added).
B. Intentional Infliction of Emotional Distress Claim Against Mr. Cuti
Plaintiff alleges that Cuti's "extreme and outrageous actions and conduct" caused her to suffer "depression, sleeplessness, and anxiety." Compl. ¶ 32. In order to state a claim for intentional infliction of emotional distress under New York law, a plaintiff must allege four elements: "(1) extreme and outrageous conduct, (2) intent to cause severe emotional distress, (3) a causal connection between the conduct and the injury, and (4) severe emotional distress." Bender v. City of New York, 78 F.3d 787, 790 (2d Cir. 1996) (citing Howell v. New York Post Co., 81 N.Y.2d 115, 121, 596 N.Y.S.2d 350, 353 (N.Y. 1993)). Because plaintiff fails to prove the first element of this claim, namely that Cuti's conduct was extreme and outrageous, we need not consider the remaining elements.
The "extreme and outrageous" element of emotional distress claims has proven to be extremely difficult to satisfy. See, e.g., Howell, 81 N.Y.2d at 122, 596 N.Y.S.2d at 353. "Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community."Fisher v. Maloney, 43 N.Y.2d 553, 557, 402 N.Y.S.2d 991, 993 (N.Y. 1978) (quoting Restatement (Second) of Torts § 43, cmt. d (1965)). Limited by the confines of this strict standard, "New York courts routinely dismiss claims for intentional infliction of emotional distress in the employment context, except where such claims [are] accompanied by allegations of sex discrimination and, more significantly, battery." Ahmed v. Compass Group, 99 Civ. 10032 (JSM), 2000 WL 1072299, at *10 (S.D.N.Y. Aug. 3, 2000). Isolated comments, though perhaps creating a discriminatory or hostile work environment, do not constitute extreme or outrageous conduct. See, e.g., Spence v. Maryland Cas. Co, 995 F.2d 1147, 1158 (2d Cir. 1993) (holding that an employer's criticism of plaintiff's job performance and threats of termination "fall far short" of extreme and outrageous conduct); Higgins v. Metro-North R.R., 318 F.3d 422, 426 (2d Cir. 2003) (holding that several incidents of work-related, obscene yelling between employees did not approach the extreme and outrageous standard); Lydeatte v. Bronx Overall Econ. Dev. Corp., OC Civ. 5433 (GBD), 2001 WL 180055, at *2 (S.D.N.Y. Feb. 2, 2001) (explaining that plaintiff's allegations that she was harassed, retaliated against, denied benefits due to her national origin, and wrongfully terminated may have supported an employment discrimination claim but did not constitute extreme or outrageous conduct).
Plaintiff claims that Cuti exhibited extreme and outrageous conduct by "embarrassing and humiliating" her at a staff meeting. Compl. ¶ 22. Specifically, Fahmy alleges that Cuti saw her at a staff meeting and, in front of several other employees, asked "What the hell was she . . . doing at the meeting after her husband had filed a case against the company." See id. This lone statement simply does not rise to the level of extreme and outrageous conduct. Far from being "utterly intolerable in a civilized community," Fisher, 43 N.Y.2d at 557, 402 N.Y.S.2d at 993, Cuti's comment was, at worst, thoughtless and inappropriate. Accordingly, we dismiss plaintiff's IIED claim against Cuti.
The insufficiency of plaintiff's claim is only reinforced by plaintiff's citation to caselaw that, if anything, supports defendants' motion to dismiss. See Belanoff v. Grayson, 471 N.Y.2d 91, 94, 98 A.D.2d 353, 357-58 (1st Dep't 1984) (holding that employer's conduct, which included suspending plaintiff and giving plaintiff an unfavorable job performance review, was not extreme or outrageous conduct). Moreover, plaintiff's reference to fact patterns that do state a cause of action for an emotional distress claim expose the glaring differences between a viable emotional distress claim and Fahmy's claim. See O'Reily v. Executone of Arby, 121 A.D.2d 772, 773, 503 N.Y.S.2d 185, 185 (3rd Dep't 1986) (holding that plaintiff stated an IIED claim by alleging that her supervisor ignored her complaints that she was subjected to "sexual jokes, comments and inquiries, sexually oriented physical contact and gestures, sexually oriented practical jokes, [and] the posting and presence of pornographic pictures. . . ."); Sanchez v. Orozco, 578 N.Y.S.2d 145, 147, 178 A.D.2d 391, 394 (1st Dep't 1991) (holding that plaintiff stated an IIED claim by alleging that her psychiatrist persuaded her to have sexual relations with him in order to achieve a therapeutic benefit).
We note that our dismissal of plaintiff's IIED claim against Cuti does not preclude plaintiff from potentially collecting damages for emotional distress pursuant to her Title VII claim.
III. Motion for Leave to Seek Rule 11 sanctions
Defendants did not include a motion for Rule 11 sanctions in their papers, but rather sought leave to file such a motion. We assume that defendants adopted this approach in an effort to comply with this Court's individual practices, which require a pre-motion letter. However, defendants' application runs afoul of the procedural requirements of Rule 11. Rule 11 requires that a separate motion be served which shall not be presented to the Court "unless, within 21 days after service of the motion . . . the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected." Fed.R.Civ.P. 11(c)(1)(A). Obviously after the grant of the motion to dismiss nothing is left to be withdrawn. See In re Pennie Edmonds LLP, 323 F.3d 86, 89 (explaining that Rule 11 motions are "disallowed as untimely when filed after a point in the litigation when the lawyer sought to be sanctioned lack[s] an opportunity to correct or withdraw the challenged submission."). While we recognize that defendants served plaintiff with a letter referencing Rule 11 more than 21 days prior to serving the motion to dismiss, Rule 11 requires a formal motion. This allocation of burdens no doubt reflects the drafters' desire to avoid the casual use of the threat of Rule 11 sanctions.
Nothing in our individual practices would have prevented defendants from seeking leave to file a Rule 11 motion at the time they filed their motion to dismiss.
Despite our determination that the procedural requirements of Rule 11 were not complied with, we should note that the conduct of plaintiff's counsel, Andrew J. Schatkin, may well have been sanctionable under Rule 11. This Court explicitly admonished Mr. Schatkin that his failure to withdraw frivolous claims might lead to Rule 11 sanctions. Despite this warning, Mr. Schatkin persisted, eventually submitting a brief filled with errors and inaccuracies. Apparently, this is not the first instance of such conduct by Mr. Schatkin. See Fahmy v. Duane Reade, 04 Civ. 1798 (DLC), 2006 WL 1582084, at *2 n. 3 (S.D.N.Y June 9, 2006) ("The submissions made by Fahmy's attorney, Andrew J. Schatkin, are rife with such factual omissions and are, at times, so disorganized as to be nearly incomprehensible. Moreover, throughout his brief, Schatkin repeatedly substitutes overheated rhetoric . . . for legal analysis."). We take this opportunity to caution Mr. Schatkin that in the future such conduct may result in more severe consequences.
CONCLUSION
For the reasons set forth above, defendants' motion to dismiss plaintiff's First Amendment claim and her intentional infliction of emotional distress claim against Cuti is granted and defendants' request for leave to file a motion for Rule 11 sanctions is denied.IT IS SO ORDERED.