Justin Richardson v. Axion Logistics, L.L.C. , 780 F.3d 304 ( 2015 )

Case: 14-30306 Document: 00512955147 Page: 1 Date Filed: 03/03/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 14-30306 United States Court of Appeals
Fifth Circuit
FILED
JUSTIN SHANE RICHARDSON, March 3, 2015
Lyle W. Cayce
Plaintiff – Appellant, Clerk
v.
AXION LOGISTICS, L.L.C.,
Defendant – Appellee.
Appeal from the United States District Court
for the Middle District of Louisiana
Before REAVLEY, JONES, and ELROD, Circuit Judges.
JENNIFER WALKER ELROD, Circuit Judge:
Justin Shane Richardson appeals the district court’s dismissal of his first
amended complaint, which alleged that Axion Logistics, L.L.C. terminated his
employment in violation of Louisiana’s whistleblower statute, Louisiana
Revised Statutes § 23:967. Because the complaint stated a plausible claim for
relief, we reverse.
I.
For the purposes of this appeal, we do not express any view on the
ultimate merits of Richardson’s case; rather, “we accept all well-pleaded facts
as true and view those facts in the light most favorable to the plaintiff.”
Montoya v. FedEx Ground Package Sys., Inc., 614 F.3d 145, 146 (5th Cir. 2010)
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(internal quotation and alteration marks omitted). The first amended
complaint alleges the following facts. Richardson was briefly employed by
Axion from February 7, 2012, to May 21, 2012. On March 26, 2012, Axion
promoted him to general manager of the company’s Louisiana operations.
While serving as general manager, Richardson became aware that two Axion
employees, Jimmy Hall and Don Ward, were fraudulently billing Dow
Chemical, and Axion client, for mileage reimbursement. Richardson first
learned of the fraudulent billing when Andy Wheat, whom Hall had told about
these billing practices, showed Richardson the discrepant time sheets.
Richardson reported the timesheet manipulations up the chain of
command. Along with Wheat, he called Axion’s former president, Steve
Seymour, to report the over-billing. Seymour responded that “it is not like you
are telling me something I don’t already know.” Seymour had previously tried
to fire Hall, in part for his fraudulent billing, but Gary Grant, Axion’s CEO,
would not allow it. Instead, Hall had been designated as special projects
manager for the Dow job. Richardson also spoke to Elaine Young, Axion’s vice
president of administration. Young discussed the issue with Seymour, who
instructed her to bill Dow for the extra time and pay Ward for the extra hours.
Next, Richardson reported the timesheet manipulations via telephone to
Grant, who instructed Richardson “that he should not tell anyone about it”
until Richardson and Grant could discuss the matter in person. Richardson
then met with Axion’s CFO, Jim Konvelman, and informed him of the fraud.
During the meeting, Richardson expressed that if Axion was unwilling to notify
Dow of the over-billing, he would notify Dow himself. Konvelman told
Richardson to keep quiet until Konvelman had spoken to Grant. The next day,
Konvelman suggested that Richardson and Wheat gather evidence to support
the allegations.
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On May 2, 2012, Richardson and Wheat met with Grant. Grant
instructed them to submit a written report of the information that they had on
each employee who was working on the Dow account, which they did via e-mail
later that same day. The following week, Richardson attended a dinner with
Axion management, who spent much of the evening criticizing Richardson’s job
performance and qualifications. About a week later, Seymour informed
Richardson that he had not made a good impression with Grant and the rest
of Axion’s management. During this conversation, Richardson inquired about
the over-billing issue; “Seymour told him there was nothing to discuss, and to
be quiet about it.”
Seymour terminated Richardson’s employment on May 21, 2012, on the
stated ground that he “was not a good fit” for the company. Richardson then
brought this diversity suit in federal court under the Louisiana whistleblower
statute. Richardson alleged that Axion terminated his employment because
he reported fraudulent billing practices to Axion’s executives and threatened
to disclose the fraud to Axion’s client. Axion moved to dismiss under Rule
12(b)(6) of the Federal Rules of Civil Procedure, and Richardson amended his
complaint. Axion again moved to dismiss, and the district court granted the
motion, entering a dismissal with prejudice. Richardson then initiated this
appeal.
II.
We review a Rule 12(b)(6) dismissal de novo and apply the same standard
that the district court did. Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir.
2007). “To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to “state a claim to relief that is plausible on
its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). A complaint is facially plausible “when
the plaintiff pleads factual content that allows the court to draw the reasonable
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inference that the defendant is liable for the misconduct alleged.” Iqbal, 556
U.S. at 678. We must “accept[] all well-pleaded facts as true and view[] those
facts in the light most favorable to the plaintiff.” Bustos v. Martini Club, Inc.,
599 F.3d 458, 461 (5th Cir. 2010) (internal quotation marks omitted).
However, while the complaint need not articulate “detailed factual
allegations,” it must provide “more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Twombly,
550 U.S. at 555.
To state a claim under Louisiana Revised Statutes § 23:967, Richardson
must plead facts sufficient to show that “(1) [Axion] violated the law through a
prohibited workplace act or practice; (2) [Richardson] advised [Axion] of the
violation; (3) [Richardson] then refused to participate in the prohibited practice
or threatened to disclose the practice; and (4) [Richardson] was fired as a result
of [his] refusal to participate in the unlawful practice or threat to disclose the
practice.” Hale v. Touro Infirmary, 2004-0003 (La. App. 4 Cir. 11/3/04, 10); 886
So. 2d 1210, 1216 (La. Ct. App.2004), writ denied, 2005-0103 (La. 3/24/05); 896
So. 2d 1036.
III.
To state a claim, Richardson first had to allege that Axion, rather than
simply its employees, violated state law. See Fondren v. Greater New Orleans
Expressway Comm’n, 03-1383 (La. App. 5 Cir. 4/27/04), 871 So. 2d 688, 691 (La.
Ct. App. 2004) (“The Louisiana Whistleblower Statute targets serious employer
conduct that violates the law.”) (emphasis added); cf. also Dillon v. Lakeview
Regional Med. Ctr. Auxiliary, Inc., 2011-1878 (La. App. 1 Cir. 6/13/12), 2012
WL 2154346, at *5 & n.8, writ denied, 2012-1618 (La. 10/26/12), 99 So. 3d 651
(observing that “it could be concluded that the employer must be the actor who
violated the law, in order for there to be a cause of action under” § 23:967, and
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that “there is no indication” that the statute “would encompass unauthorized
acts of . . . employees”).
The district court concluded that Richardson had failed to plead this
element. In particular, the district court concluded that “Richardson merely
alleged that some of his co-workers engaged in unethical billing practices, only
devoting one conclusory paragraph to stating that such illegal activity was
authorized by [Axion].” This was incorrect. While paragraph 5 of the
complaint did include an undetailed allegation that Axion authorized the
fraudulent billing practices, other portions of the complaint provided the facts
necessary to support the allegation. Namely, paragraph 13 alleged that
Axion’s president tried to fire one of the dishonest employees because of his
fraud but the CEO refused to allow it, and paragraph 14 alleges that Axion’s
president expressly admitted knowledge of the fraud. In addition, paragraph
16 alleges that Axion’s president, after the vice president of administration
informed him of fraudulent billing, directed that the client be billed (and the
dishonest employee be paid) for the extra time. Finally, paragraphs 18 and
18a allege that Richardson reported the fraudulent billing to the CEO and
CFO, both of whom instructed him to keep quiet about the matter.
Taken together, these facts make plausible the allegation that Axion
authorized the fraudulent billing practices of which Richardson complained.
Furthermore, Axion’s double-billing constituted a violation of state law. See
La. Rev. Stat. § 14:70 (defining the crime of false accounting as “the intentional
rendering of a financial statement of account which is known by the offender
to be false, by anyone who is obliged to render an accounting by the law
pertaining to civil matters”). Thus, Richardson successfully pleaded that Axion
violated state law through a prohibited workplace act or practice.
As alternative grounds for affirmance, Axion argues that Richardson
failed to plead the three other elements of his claim. Axion’s arguments are
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without merit, and the district court properly rejected them. As the district
court noted, Richardson alleged that he reported the violation to Axion and
threatened to disclose it if Axion did not do so. Specifically, paragraph 18
alleges that Richardson advised Axion’s CEO and CFO of the fraudulent bills,
and paragraph 18a alleges that Richardson informed the CFO that if Axion did
not tell the client about the fraud, he would notify the client himself. Axion
argues that what Richardson reported and threatened to disclose was merely
the unauthorized actions of his co-employees, rather than a violation of law by
Axion. However, as explained above, the complaint plausibly alleged that
Axion authorized the unlawful conduct that Richardson reported and
threatened to disclose. Therefore, these allegations were sufficient to plead
that Richardson advised Axion of—and threatened to disclose—fraudulent
billing practices that it had authorized, rather than simply the indiscretions of
a rogue co-worker.
Finally, Richardson plausibly alleged that his threat to disclose the
fraudulent billing prompted the termination of his employment, painting a
picture of whistleblower retaliation by circumstantial evidence. The complaint
alleges that as Richardson reported the fraudulent billing of his co-employees
up the chain of command, he encountered mounting resistance from Axion
executives. Axion’s president directed that the client be billed for the extra
time, and when Richardson approached the CFO and CEO, both instructed
him to remain quiet about the matter. Richardson alleges that after he
threatened to reveal the fraud to the client and he shared evidence of the fraud
with the CEO, the CEO called him into a dinner meeting with other executives,
during which meeting the executives criticized Richardson’s experience and
qualifications. The complaint also alleges that Axion terminated Richardson’s
employment on May 21, 2012—mere weeks after Richardson’s meetings with
the CFO and CEO. These allegations permit the inference that Richardson’s
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termination came as a result of his whistleblowing, and that the purpose of the
dinner meeting was to construct a pretextual justification for the termination.
Cf. Chivleatto v. Sportsman’s Cove, Inc., 05-136 (La. App. 5 Cir. 6/28/05, 4); 907
So. 2d 815, 819 (La. Ct. App. 2005) (observing that in employment retaliation
suits, most employers refuse to admit a retaliatory motive, and therefore “most
plaintiffs rely on circumstantial evidence to prove” retaliatory discharge).
IV.
Richardson’s first amended complaint stated a plausible claim for relief
under Louisiana Revised Statutes § 23:967. Therefore, we REVERSE the
judgment of the district court and REMAND for further proceedings.
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