Lowery v. Fed Express Corp ( 2005 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 05a0419p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Plaintiff-Appellant, -
MYRON LOWERY,
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No. 04-5958
v.
,
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FEDERAL EXPRESS CORPORATION; and FEDEX -
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EXPRESS, INC., a wholly owned subsidiary of
Defendants-Appellees. -
Federal Express Corporation,
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Appeal from the United States District Court
for the Western District of Tennessee at Memphis.
No. 02-02056—Bernice B. Donald, District Judge.
Argued: September 14, 2005
Decided and Filed: October 20, 2005
Before: GUY, BATCHELDER, and GILMAN, Circuit Judges.
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COUNSEL
ARGUED: Donald A. Donati, DONATI LAW FIRM, Memphis, Tennessee, for Appellant.
Frederick L. Douglas, FEDERAL EXPRESS CORPORATION, Memphis, Tennessee, for Appellees.
ON BRIEF: Donald A. Donati, William B. Ryan, DONATI LAW FIRM, Memphis, Tennessee,
for Appellant. Frederick L. Douglas, FEDERAL EXPRESS CORPORATION, Memphis,
Tennessee, for Appellees.
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OPINION
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RALPH B. GUY, JR., Circuit Judge. Plaintiff Myron Lowery appeals from the entry of
partial summary judgment in favor of defendants Federal Express Corporation and FedEx Express,
Inc., on his claims of race discrimination and retaliation in violation of Title VII. The district court
also denied summary judgment to defendants on plaintiff’s cause of action for breach of contract,
and granted the plaintiff’s request for entry of final judgment on the Title VII claims pursuant to
Fed. R. Civ. P. 54(b). For the reasons discussed below, we find the Rule 54(b) certification was not
proper in this case and dismiss the appeal for lack of jurisdiction.
1
No. 04-5958 Lowery v. Fed. Express Corp., et al. Page 2
I.
Plaintiff was hired by Federal Express Corporation in 1990 and was promoted to the position
of Manager of Corporate Relations in 1994. In 1998, plaintiff applied but was not selected for the
position of Manager of Media Relations. Plaintiff filed an internal grievance and during the process
complained that the decision was racially discriminatory. The dispute was settled with plaintiff
releasing all claims relating to the promotion, including those arising under Title VII, in exchange
for a pay raise and a promise that he would not be retaliated against for filing the grievance. It is
the promise not to retaliate that forms the basis of plaintiff’s cause of action for breach of contract.
A corporate-wide reorganization was implemented in 2000, which affected all the
departments under the direction of Vice-President of Corporate Communications William
Margaritis. Margaritis, who indirectly supervised plaintiff and had reviewed plaintiff’s earlier
grievance, led the reorganization process for the corporate communications managers. Plaintiff was
the only African-American communications manager and the only manager whose work group was
abolished. Although plaintiff expressed interest in three different positions, plaintiff was assigned
to be manager of communications for the Air Operations Division/Central Support Services
Division. As a result of his reassignment, plaintiff claimed he was denied a pay increase that other
managers received, was later given a smaller pay increase, and lost opportunities for future
advancement.
Plaintiff filed a charge of discrimination with the EEOC in December 2000, and commenced
this action in January 2002. Plaintiff alleged federal causes of action for race discrimination and
retaliation under Title VII and later amended his complaint to add a state law cause of action for
breach of contract. Defendants moved for summary judgment on all counts, which the district court
granted in part and denied in part. The district court found that plaintiff could not establish the
adverse employment action that is required to prove both race discrimination and retaliation under
Title VII. Then, electing to exercise discretion over the state law cause of action, the district court
concluded (1) that the contractual right not to be retaliated against did not require proof of an
adverse employment action; and (2) that there were genuine issues of fact with regard to whether
plaintiff was retaliated against in breach of the settlement agreement. Plaintiff filed a motion for
reconsideration in reliance on White v. Burlington Northern and Santa Fe Railway, 364 F.3d 789(6th Cir. 2004) (en banc), petition for cert. filed, (Aug. 24, 2005) (No. 05-259), which was denied.
At plaintiff’s request, the district court determined that there was no just reason for delay and
directed entry of final judgment on plaintiff’s Title VII claims under Rule 54(b). This appeal
followed.
II.
Although defendants have not challenged the Rule 54(b) certification, this court is without
appellate jurisdiction if the certification was improper. Corrosioneering, Inc. v. Thyssen Envtl. Sys.,
Inc., 807 F.2d 1279, 1282 (6th Cir. 1986). For this reason, we are compelled to consider whether
the entry of final judgment was appropriate in this case. Daleure v. Commonwealth of Kentucky,
269 F.3d 540, 543 (6th Cir. 2001); Justice v. Pendleton Place Apartments, 40 F.3d 139, 141 (6th Cir.
1994). “Although Rule 54(b) relaxes the traditional finality requirement for appellate review, it does
not tolerate immediate appeal of every action taken by a district court.” Gen. Acquisition, Inc. v.
GenCorp, Inc., 23 F.3d 1022, 1026 (6th Cir. 1994). Rather, the rule “attempts to strike a balance
between the undesirability of piecemeal appeals and the need for making review available at a time
that best serves the needs of the parties.” Solomon v. Aetna Life Ins. Co., 782 F.2d 58, 60 (6th Cir.
1986). “Not all final judgments on individual claims should be immediately appealable, even if they
are in some sense separable from the remaining unresolved claims.” Curtiss-Wright Corp. v. Gen.
Elec. Co., 446 U.S. 1, 8 (1980).
No. 04-5958 Lowery v. Fed. Express Corp., et al. Page 3
A. Multiple Claims
The first requirement under Rule 54(b) — that the district court expressly “direct the entry
of a final judgment as to one or more but fewer than all of the claims or parties” — is reviewed de
novo. Gen. Acquisition, 23 F.3d at 1027; see also GenCorp., Inc. v. Olin Corp., 390 F.3d 433, 442
(6th Cir. 2004), petition for cert. filed, 74 U.S.L.W. 3026 (U.S. June 27, 2005) (No. 05-11). The
judgment must represent “‘an ultimate disposition of an individual claim entered in the course of
a multiple claims action.’” Curtiss-Wright, 446 U.S. at 7 (citation omitted). Although the decision
granting partial summary judgment finally resolved plaintiff’s Title VII claims, it is less than clear
that the decision entirely resolved an individual claim in a multiple claims action.
This court has held that “[e]ven though different theories of liability may have been asserted,
the concept of a ‘claim’ under Rule 54(b) denotes ‘the aggregate of operative facts which give rise
to a right enforceable in the courts.’” McIntyre v. First Nat’l Bank of Cincinnati, 585 F.2d 190, 192
(6th Cir. 1978) (citations omitted). In McIntyre, the plaintiff alleged federal and state causes of
action arising out of the same events. The federal claims were tried first, judgment was entered, and
the order was certified for immediate appeal under Rule 54(b). This court dismissed the appeal,
concluding that the state and federal causes of action should be considered a single claim for
purposes of Rule 54(b) because they arose out of the same aggregate of operative facts. Id. at 191-
92.
Conceptually, it is not difficult to imagine that a cause of action for breach of contract could
involve a distinct legal right from statutory claims under Title VII; but, here, the contractual promise
was that plaintiff would not be retaliated against for filing the grievance. That is, the alleged breach
was the retaliation. Even assuming, as the district court concluded, that the breach of contract claim
did not require proof of an adverse employment action (a question not before us), both causes of
action arose out of the same aggregate of operative facts and seek to recover for the same underlying
injury. Compare GenCorp, 390 F.3d at 442 (claims did not share single aggregate of operative
facts), with Daleure, 269 F.3d at 543 (different theories of damages for same underlying injury),
and Gen. Acquisition, 23 F.3d at 1029 (three different theories of liability were single claim). Nor
is it clear whether plaintiff could recover economic damages for both breach of contract and
retaliation under Title VII. Gen. Acquisition, 23 F.3d at 1028-29 (multiple recoveries test). Even
if we were to conclude that the claims were sufficiently separate to be considered multiple claims,
it was an abuse of discretion to find there was no just reason for delay.
B. Reason for Delay
The second requirement of Rule 54(b) — that the district court determine that there is no just
reason for delay — requires consideration of “judicial administrative interests as well as the equities
involved.” Curtiss-Wright, 446 U.S. at 8. The reviewing court may not “reweigh the equities or
reassess the facts,” but must “make sure that the conclusions derived from those weighings and
assessments are juridically sound and supported by the record.” Id. at 10; see also Gen. Acquisition,
23 F.3d at 1030. This court has identified the following nonexhaustive list of factors to be
considered:
(1) the relationship between the adjudicated and unadjudicated claims; (2) the
possibility that the need for review might or might not be mooted by future
developments in the district court; (3) the possibility that the reviewing court might
be obliged to consider the same issue a second time; (4) the presence or absence of
a claim or counterclaim which could result in set-off against the judgment sought to
be made final; (5) miscellaneous factors such as delay, economic and solvency
considerations, shortening the time of trial, frivolity of competing claims, expense
and the like.
No. 04-5958 Lowery v. Fed. Express Corp., et al. Page 4
Gen. Acquisition, 23 F.3d at 1030 (citations omitted). The district court must “determine whether
‘the needs of the parties’ outweigh the efficiency of having one appeal at the conclusion of the case
in its entirety, and it must spell out its reasons for concluding that prompt review is preferable.”
GenCorp, 390 F.3d at 442 (citation omitted). This determination is reviewed for abuse of discretion.
Id.Addressing the relationship between the claims, the district court concluded that the Title
VII claims possessed elements of proof separate and distinct from the breach of contract claim.
From this fact, the district court also concluded that the need for review would not likely be mooted
by future developments in the trial court, and that it was not likely that this court would be obligated
to review any issues a second time if an appeal were to be filed after resolution of the breach of
contract claim. By focusing on the adverse action issue, the district court’s analysis overlooks the
inherent inseparability of the adjudicated and unadjudicated claims in this case. Instead, the
interrelationship of the claims themselves weighs heavily against certification under Rule 54(b). See
Gen. Acquisition, 23 F.3d at 1028. A similar result was reached by the Ninth Circuit in dismissing
the appeal in Wood v. GCC Bend, LLC , 442 F.3d 873, 880-82 (9th Cir. 2005).
The plaintiff in Wood sued her employer, alleging statutory claims for age discrimination and
retaliation for opposing age discrimination, as well as a common law claim for constructive
discharge. The district court granted summary judgment to the employer on the constructive
discharge claim and on the discrimination and retaliation claims to the extent that they were based
on a constructive discharge theory. But summary judgment was denied on the age discrimination
and retaliation claims to the extent that they were based on the plaintiff’s reassignment from one
position to another. The Ninth Circuit found that although the constructive discharge claim might
be sufficiently distinct to constitute an individual claim, the “practical effect of certifying the
constructive discharge issues in this case is to deconstruct her age discrimination action so as to
allow piecemeal appeals with respect to the same set of facts.” Id. at 880. Under either theory, the
plaintiff’s “legal right to relief stem[med] largely from the same set of facts and would give rise to
successive appeals that would turn largely on identical, interrelated, facts.” Id. The court found that
this weighed heavily against certification, particularly given that the case was a routine employment
dispute for which trial would be neither lengthy nor complex.
In this case, whether or not the elements are the same, plaintiff’s retaliation and breach of
contract claims both assert a right to be free from retaliation for having complained about the earlier
denial of promotion. That is, the same conduct by defendants is alleged to constitute a breach of the
promise not to retaliate and a violation of Title VII. As such, it is possible that the jury could find
there was no discriminatory motive in Lowery’s transfer and render moot the adverse action inquiry.
Moreover, the greater the overlap in the factual basis between the adjudicated and unadjudicated
claims, the greater the possibility that this court will have to revisit the same facts under a different
theory in a second appeal. This risk is highlighted by the fact that, as is common in appeals like this,
the defendants argue that summary judgment may be affirmed on alternative grounds. Also, while
the district court has ruled that the breach of contract claim does not require proof of an adverse
action, it seems likely that this finding may be challenged if a second appeal were taken after
resolution of the breach of contract claim. The commonality in operative facts underlying both the
plaintiff’s claims and the likely defenses militates against immediate review of the Title VII claims.
As in Wood, this action arises out of a discrete and straightforward employment dispute that should
be reviewed as a single unit.
In considering “pragmatic concerns,” the district court placed great weight on the possibility
that an immediate appeal might result in a voluntary settlement that would obviate the need for any
trial at all. The prospect that appellate resolution could facilitate settlement of the remaining claims
is a relevant consideration that may be weighed against the possibility that the same issues might
be presented in a subsequent appeal. Curtiss-Wright, 446 U.S. at 8 n.2. That does not mean,
No. 04-5958 Lowery v. Fed. Express Corp., et al. Page 5
however, that Rule 54(b) certification may be used as a vehicle to leverage a settlement without
regard to the undesirability of piecemeal appeals. In this case, the district court explained that, “as
a practical matter,” “the availability of punitive and compensatory damages under Plaintiff’s Title
VII claims creates a vast discrepancy between the amount of money damages that the Plaintiff may
potentially recover based on his state law breach of contract claim alone.” As such, the court
concluded that “this discrepancy in available damages greatly hinders the possibility of settlement.”
This was a significant factor in the district court’s weighing, but the reasons articulated suggest less
of an interest in judicial administration and more of an effort to induce settlement.
Finally, the circumstances here are substantially different than those found by the court in
Akers v. Alvey, 338 F.3d 491, 495-96 (6th Cir. 2003). In Akers, the district court failed to apply the
relevant factors, but this court impliedly found that the record supported a Rule 54(b) interlocutory
appeal despite the procedural lapse. For the Akers court to remand the case after briefing and oral
argument was thus determined to be judicially inefficient. In the present case, however, the district
court’s analysis of the factors was incorrect, not simply absent. Judicial economy, therefore, would
not be served by our deciding its merits, because a trial on the breach-of-contract issue might render
this appeal moot.
After review of the district court’s weighings and assessments of the relevant factors, we find
it was an abuse of discretion to grant plaintiff’s motion to certify the Title VII claims for immediate
appeal under Rule 54(b). Accordingly, we express no opinion on the merits and DISMISS this
appeal.