Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_18-cv-06271/USCOURTS-cand-4_18-cv-06271-1/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1441 Petition for Removal - Employment Discrimination

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

RYAN HYAMS,

Plaintiff,

v.

CVS HEALTH CORPORATION, et al.,

Defendants.

Case No. 18-cv-06271-PJH 

ORDER

Re: Dkt. Nos. 27, 32

Defendants CVS Health Corporation, CVS Pharmacy, Inc., Garfield Beach CVS, 

LLC, and CVS RX Services, Inc.’s (together, “CVS”) motion to dismiss came on for 

hearing before this court on September 4, 2019. Plaintiff Ryan Hyams appeared through 

his counsel, Cathy Coble. Defendants appeared through their counsel, Daniel Fears. 

Having read the papers filed by the parties and carefully considered their arguments and 

the relevant legal authority, and good cause appearing, the court hereby rules as follows.

BACKGROUND

This action stems from Hyams’ former employment as a pharmacist for CVS. First 

Amended Compl. (“FAC”), Dkt. 22 ¶¶ 5, 13–16. The operative complaint alleges eight 

causes of action, each against all defendants: (1) Disparate Treatment Discrimination on 

the Basis of Race and/or Color in Violation of the California Fair Employment and 

Housing Act (“FEHA”); (2) Disparate Impact Discrimination on the Basis of Race and/or 

Color in Violation of FEHA; (3) Harassment on the Basis of Race and/or Color in Violation 

of FEHA; (4) Retaliation for Complaining of Discrimination and/or Harassment on the 

Basis of Race and/or Color in Violation of FEHA; (5) Failure to Prevent, Investigate, and 

Case 4:18-cv-06271-PJH Document 71 Filed 09/13/19 Page 1 of 11
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Remedy Discrimination, Harassment, or Retaliation in Violation of FEHA; (6) Intentional 

Infliction of Emotional Distress; (7) Negligent Infliction of Emotional Distress; and 

(8) Wrongful Termination in Violation of Public Policy.

Plaintiff was hired by CVS on December 15, 2015, after CVS acquired a pharmacy 

located in a San Francisco Target store where plaintiff had worked since June 2011.1 Id.

¶ 18. Plaintiff “was the only Black full-time pharmacist out of 64 pharmacists in his 

District and over 200 pharmacists in his Region.” Id. ¶ 25. On or about May 19, 2017, 

plaintiff was selected by CVS for an audit of a Drug Utilization Review (“DUR”) system, 

although by the nature of the audit plaintiff was not informed that it was occurring. Id.

¶ 26. The audit essentially consisted of CVS creating a digital record of a fictitious 

patient with various ailments and drug prescriptions, designed to test pharmacists’ 

detection of possible drug interactions. Id. ¶¶ 27–29. When undergoing the audit, 

plaintiff bypassed a warning screen (which he was not trained on), made notations in the 

patient file, and then approved the prescription. Id. ¶ 29. Plaintiff marked the physical 

bag containing the prescription for an in-person oral consultation regarding drug 

interactions. Id. ¶ 31.

On or about July 18, 2017, CVS contacted plaintiff regarding the DUR audit. Id.

¶ 37. Interactions between plaintiff and CVS’s human resources department ensued. Id.

¶¶ 37–45. On or about August 25, 2017, plaintiff was terminated in an in-person meeting, 

was told that he was the only Black pharmacist employed by CVS in his Region, and was 

told that he was the only individual selected for the DUR audit. Id. ¶ 45.

On July 3, 2018, plaintiff filed an administrative complaint with the Department of 

Fair Employment and Housing (“DFEH”), and he received a DFEH right-to-sue letter on 

the same day. Id. ¶ 60; see Defendants’ RJN, Dkt. 28, Ex. A at ECF pp. 5–7 (the “DFEH 

Charge”).

On August 21, 2018, plaintiff filed a civil complaint against CVS in the Superior 

 

1 For purposes of this motion, the facts are recounted as alleged in the operative 

complaint and are assumed to be true.

Case 4:18-cv-06271-PJH Document 71 Filed 09/13/19 Page 2 of 11
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Court of the State of California, County of San Francisco. Dkt. 3, Ex. A. The action was 

removed to this court on October 12, 2018. Dkt. 1. The original complaint stated seven 

of the same causes of action as the FAC, but it did not state the FAC’s second cause of 

action for disparate impact discrimination. On June 26, 2019, the parties submitted a 

joint stipulation to permit plaintiff to file a FAC. On June 27, 2019, the court entered the 

stipulated order, and plaintiff filed the FAC. Dkts. 21–22. On July 11, 2019, CVS filed an 

answer to the FAC. Dkt. 23. On July 30, 2019, defendants filed the present motion to 

dismiss the FAC’s second claim for disparate impact discrimination. Dkt. 27.

DISCUSSION

A. Legal Standard

“After the pleadings are closed—but early enough not to delay trial—a party may 

move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). “Judgment on the pleadings 

is properly granted when, accepting all factual allegations in the complaint as true, there 

is no issue of material fact in dispute, and the moving party is entitled to judgment as a 

matter of law. Analysis under Rule 12(c) is substantially identical to analysis under 

Rule 12(b)(6) because, under both rules, a court must determine whether the facts 

alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy.” Chavez v. 

United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (internal quotation marks and 

citations omitted); accord Dworkin v. Hustler Magazine Inc., 867 F.2d 1188, 1192 (9th 

Cir. 1989) (“The principal difference between motions filed pursuant to Rule 12(b) and 

Rule 12(c) is the time of filing.”).

B. Analysis

Defendants move to dismiss under two alternate grounds. First, they move under 

Rule 12(b). A motion to dismiss pursuant to Rule 12(b) “must be made before pleading if 

a responsive pleading is allowed.” Fed. R. Civ. P. 12(b). Because defendants filed an 

answer before asserting their Rule 12(b) defense, the Rule 12(b) motion is untimely and 

is therefore DENIED. See Dkt. 23 (answer).

In the alternative, defendants move to dismiss under Rule 12(c). The parties 

Case 4:18-cv-06271-PJH Document 71 Filed 09/13/19 Page 3 of 11
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

agree that Rule 12(c) is an appropriate vehicle for defendants’ motion, and the court 

presently considers defendants’ Rule 12(c) motion.

Before suing for a FEHA violation, an employee must exhaust his administrative 

remedies by filing a timely and sufficient complaint (called a “charge”) with the DFEH and 

receiving a right-to-sue notice. Cal. Gov't Code §§ 12960, 12965(b); Rodriguez v. 

Airborne Express, 265 F.3d 890, 896–97 (9th Cir. 2001). “The scope of the written 

administrative charge defines the permissible scope of the subsequent civil action. 

Allegations in the civil complaint that fall outside of the scope of the administrative charge 

are barred for failure to exhaust.” Id. at 897 (citation omitted).

“Disparate treatment is the most easily understood type of discrimination. The 

employer simply treats some people less favorably than others because of their race, 

color, religion, sex, or other protected characteristic. Liability in a disparate-treatment 

case depends on whether the protected trait actually motivated the employer's decision. 

By contrast, disparate-impact claims involve employment practices that are facially 

neutral in their treatment of different groups but that in fact fall more harshly on one group 

than another and cannot be justified by business necessity. Under a disparate-impact 

theory of discrimination, a facially neutral employment practice may be deemed illegally 

discriminatory without evidence of the employer's subjective intent to discriminate that is 

required in a disparate-treatment case.” Raytheon Co. v. Hernandez, 540 U.S. 44, 52–53 

(2003) (internal quotation marks, citations, and alterations omitted). “Because these 

claims arise from different theories, a party cannot rely on allegations supporting one to 

administratively exhaust the other.” Lindsey v. United Airlines, Inc., Case No. 17-cv00753-WHA, 2017 WL 2404911, at *2–3 (N.D. Cal. June 2, 2017) (citing Brown v. Puget 

Sound Elec. Apprenticeship & Training Trust, 732 F.2d 726, 729–30 (9th Cir. 1984)); 

accord De Los Santos v. Panda Exp., Inc., Case No. 10-cv-01370-SBA, 2010 WL 

4971761, at *4 (N.D. Cal. Dec. 3, 2010) (collecting cases).

The parties do not dispute that plaintiff has exhausted his disparate treatment 

claim. The parties also do not dispute that plaintiff must separately exhaust his 

Case 4:18-cv-06271-PJH Document 71 Filed 09/13/19 Page 4 of 11
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

administrative remedies with respect to his disparate impact claim in order to pursue that 

theory of discrimination in this civil action. Plaintiff argues that he has exhausted his 

administrate remedies with respect to this disparate impact theory for two reasons. First, 

plaintiff argues that his DFEH Charge actually asserted a discrimination claim based on 

disparate impact. Second, plaintiff argues that even if his DFEH Charge did not assert a 

disparate impact claim, a disparate impact claim is “like or reasonably related to” the 

assertions in his DFEH Charge. 

1. Whether Plaintiff’s DFEH Charge Asserted A Discrimination Claim 

Based On Disparate Impact

First, plaintiff argues that any claim for any type of discrimination “is exhausted 

simply by checking the box marked ‘discrimination’” on a DFEH intake form. Opp., 

Dkt. 42 at 13. Plaintiff’s argument fails. As an initial matter, plaintiff offers no evidence 

that he checked a box on a DFEH submission alleging “discrimination.” Instead, plaintiff 

submits for the court’s consideration an entirely-blank version of the form he claims to 

have submitted. See Dkt. 42-1, Ex. A. Although plaintiff’s counsel argues that the 

submitted form had a box labeled “discrimination” checked, plaintiff’s motion is not 

accompanied by any sworn declaration attesting to the declarant’s personal knowledge of 

the facts he asks the court to consider, or any other type of cognizable evidentiary 

submission.

2

 Moreover, the form plaintiff provides explicitly states that submitting it to the 

DFEH “is not a filed complaint.” Dkt. 42-1, Ex. A at ECF p. 5. 

Even if plaintiff had offered some evidence tending to show that he submitted an 

intake form with a box labeled “discrimination” checked, doing so would not alone have 

stated a disparate impact theory in his DFEH Charge sufficient to administratively 

exhaust it. Such a box could have indicated either disparate treatment or disparate 

impact, which the parties agree must be exhausted separately. Checking the single box 

is not alone sufficient to exhaust both theories. Here, that is particularly the appropriate 

 

2 Plaintiff also cites an Exhibit C to his request for judicial notice, but that filing did not 

contain an Exhibit C. See Opp. at 14–15 n.3; Dkt. 42-1.

Case 4:18-cv-06271-PJH Document 71 Filed 09/13/19 Page 5 of 11
6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

conclusion because the submitted intake form was supplemented by an attorneyprepared DFEH Charge replete with allegations that plaintiff was “treated differently” 

because of his race (DFEH Charge at 2), and a civil complaint filed soon thereafter 

explicitly alleging “disparate treatment” yet making no reference to disparate impact (e.g., 

Complaint, Dkt. 3, Ex. A ¶¶ 69, 83, 96). Plainly, the attorney preparing the charge was 

specifically and solely alleging a disparate treatment theory. For the foregoing reasons, 

the court finds that plaintiff’s DFEH Charge did not actually assert disparate impact 

discrimination.

2. Whether Plaintiff’s Disparate Impact Theory Is Within the Scope of the 

Administrative Investigation Which Can Reasonably Be Expected To 

Grow Out of the DFEH Charge

Second, even though plaintiff’s DFEH Charge did not assert disparate impact 

discrimination, plaintiff could have exhausted that theory if it is “like or reasonably related 

to” the assertions in his DFEH Charge. “An employment discrimination plaintiff must 

exhaust administrative remedies, and this Court only has jurisdiction over conduct 

alleged in the administrative charge and conduct that is ‘like or reasonably related to’ the 

administrative allegations. This standard is met where the allegations in the civil suit are 

within the scope of the administrative investigation which can reasonably be expected to 

grow out of the charge of discrimination. In evaluating whether the standard has been 

satisfied, administrative charges must be liberally construed.” Pacle v. JPMorgan Chase 

Bank, N.A., Case No. 13-cv-3379-TEH, 2013 WL 5289020, at *2 (N.D. Cal. Sept. 19, 

2013) (internal quotation marks and citations omitted) (citing Rodriguez, 265 F.3d at 896–

97 (“These procedural requirements, as with all provisions of FEHA, are to ‘be construed 

liberally for the accomplishment of the purposes of FEHA.’ Cal. Gov't Code § 12993(a). 

. . . This standard is met where the allegations in the civil suit are within the scope of the 

administrative investigation which can reasonably be expected to grow out of the charge 

of discrimination.”) (internal quotation marks omitted)); Sandhu v. Lockheed Missiles & 

Space Co., 26 Cal. App. 4th 846 (1994).

Case 4:18-cv-06271-PJH Document 71 Filed 09/13/19 Page 6 of 11
7

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

The parties dispute whether investigation into plaintiff’s disparate impact claim—

that a neutral policy of administrating audits had a disproportionate impact on African 

American employees—would be “reasonably expected to grow” out of plaintiff’s

administrative complaint. 

The “touchstone” or “characteristic feature of a disparate-impact claim” is “the 

recitation of a facially-neutral employment policy.” Lindsey, 2017 WL 2404911, at *2–3. 

However, a description of a policy that, “in the context presented . . . was intended to 

convey that Defendants were relying on that . . . [policy] as a pretext,” does not exhaust a 

disparate-impact claim. De Los Santos, 2010 WL 4971761, at *5.

The facts alleged in the DFEH Charge unambiguously allege only a theory of 

direct discrimination. For example, the charge states:

• Mr. Hyams, an African-American male, was an exemplary 2-year employee 

of CVS Pharmacy, Inc.

• Mr. Hyams’ performance evaluations reflected that he performed above 

expectations for CVS.

• On or about May 19, 2017, Mr. Hyams, the only African-American 

pharmacist employed by CVS out of 64 pharmacists in his District, was 

unknowingly selected for an audit by CVS.

• Mr. Hyams, who had no idea that he was being audited or that CVS could 

or would create a fake patient profile to entrap an African-American 

employee, checked the prescriptions and recognized the possible 

interaction.

• Mr. Hyams and other pharmacists in the company had processed this same 

combination of prescriptions for many other patients during his employment, 

without issue.

• More than three months later, on or about August 25, 2017, Mr. Hyams was 

wrongfully terminated, purportedly because he filled the prescription that 

was the subject of the May 19, 2017 audit.

• During his termination meeting, Mr. Hyams was notified that he, the only 

African American pharmacist employed by CVS in his District, was the only 

individual selected to be audited in this manner.

Case 4:18-cv-06271-PJH Document 71 Filed 09/13/19 Page 7 of 11
8

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

• This entrapment and eventual termination was the culmination of a pattern 

of practice of discrimination against Mr. Hyams based on his race.

• Throughout his employment, Mr. Hyams was treated differently than other 

non-African-American pharmacists.

• On one such occasion, a former supervisor cautioned Mr. Hyams against 

crossing his arms because, based on his appearance, he looked too 

aggressive.

DFEH Charge at 2–3.

Plaintiff’s charge alleged that he was the only African-American pharmacist 

employed in his district, that the “fake patient profile” of the audit was pretextual and 

functioned to “entrap” him, and that he was “was the only individual selected to be 

audited in this manner.” Id. Furthermore, the “entrapment and eventual termination was 

the culmination of a pattern of practice of discrimination against Mr. Hyams based on his 

race.” Id. Such allegations unambiguously advance a theory that plaintiff was 

intentionally discriminated against and targeted because of his race. 

Although the audit could be considered a company policy, plaintiff alleges that it 

was pretextual and served to entrap him. See id.; see generally Dkt. 3-1 ¶¶ 59 (alleging 

“false (pretextual) grounds for adverse job actions”), 131, 148. Additionally, plaintiff

specifically alleged that no one else was subject to the audit. Even if the policy provided

that only African Americans were subject to audit, that would not be a facially-neutral 

policy with a disparate impact—it would be a directly-discriminatory policy. 

Consequently, it would not be reasonably expected for a disparate-impact investigation 

(with the objective of probing a facially-neutral policy) to grow out of an administrative 

charge alleging only a directly-discriminatory policy. Therefore, the disparate impact 

theory must be dismissed for failure to exhaust administrative remedies.

At the hearing, plaintiff argued for the first time that five pharmacists have been 

terminated nation-wide based on similar audits, and three were African American. 

Plaintiff argued at the hearing—again, for the first time—that this new evidence 

demonstrates that a disproportionate percentage of African Americans were terminated 

Case 4:18-cv-06271-PJH Document 71 Filed 09/13/19 Page 8 of 11
9

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

as a result of an audit policy. Plaintiff argues that because he investigated and was able

to determine this new information,3that suggests that these alleged facts would have 

been revealed by the administrative agency’s investigation into his charge. 

Notwithstanding that plaintiff did not make this argument prior to the hearing or support 

these new allegations with any citations to the DFEH Charge, any complaint in this 

action, or any evidentiary submission, these allegations only further demonstrate that the 

administrative complaint would not be reasonably expected to lead to an investigation of

the audit as a facially-neutral policy. Plaintiff’s new argument appears to be that the audit 

was administered to employees of multiple races, but resulted in the termination of a 

disproportionate number of African Americans. That flatly contracts the allegations in his 

DFEH Charge, which specifically alleges that plaintiff was the only individual subjected to 

the audit, and that he was specifically targeted for (and entrapped by) the audit because 

of his race. Although the new allegations might plausibly support a claim of a faciallyneutral policy, they highlight the actual DFEH Charge’s deficiency in this regard.

Plaintiff’s counsel also conceded at the hearing that plaintiff was unaware of the 

newly-raised facts at the time the DFEH Charge was filed. That is telling. Although 

plaintiff may now be in the position to allege facts that could support allegations of 

disparate impact discrimination (the court does not take a position on that question), he 

plainly was not when he filed his DFEH Charge. The exhaustion inquiry assesses what 

plaintiff alleged in his charge, not what new facts he believes he could allege today. As 

such, the court finds that disparate impact discrimination is not within the scope of the 

administrative investigation which can reasonably be expected to have grown out of 

plaintiff’s DFEH charge.

4

 

3 The source of plaintiff’s new allegations is unclear, but at the hearing it was suggested 

that they are based on information learned during mediation.

4 Plaintiff also argues that defendants should be estopped from moving to dismiss 

plaintiff’s disparate impact theory because they did not oppose plaintiff’s request for leave 

to file an amended complaint stating the theory. Plaintiff’s argument is unavailing. 

Defendants’ stipulation does not constitute a clearly-inconsistent position from their 

present motion, nor have they derived an unfair advantage from it. See generally Kobold 

Case 4:18-cv-06271-PJH Document 71 Filed 09/13/19 Page 9 of 11
10

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

3. Whether Leave to Amend Is Appropriate

Plaintiff argues that he should be given leave to amend his complaint in this action 

to allow him to exhaust his disparate impact claim. Plaintiff argues that amendment 

would not be futile because his new administrative charge would not be time-barred 

because it would “relate back” to the original charge. Defendants argue amendment 

would be futile because the amendment would not relate back, so the civil claim would be 

time-barred.

“[T]he relation-back doctrine is available in appropriate circumstances to render 

timely an otherwise untimely amendment to a charge under FEHA.” Rodriguez, 265 F.3d 

at 898. An amendment adding a discrimination theory relates back to a timely-filed 

DFEH charge asserting a different theory of discrimination when “all of the allegations 

were ‘based on the same operative facts.’” Id. (quoting FEHC v. County of Alameda, 

Sheriff's Dep't, FEHC Dec. No. 81–13, 1981 WL 30856, at *8 (Cal. F.E.H.C. July 2, 

1981)). “[T]he factual allegations [of the original DFEH Charge] must be able to bear the 

weight of the new theory added by amendment.” Id. at 899. The court “conduct[s] its 

own de novo analysis of whether the amendment related back,” and is therefore not 

bound by an “agency's acceptance of an amended charge” for purposes of “the 

exhaustion analysis.” Id. at 898–99.

Although, plaintiff has not filed an amended administrative charge, plaintiff’s 

counsel has clearly explained what plaintiff would seek to exhaust with an amended 

charge. Plaintiff argues that he “would not seek to amend his DFEH Charge to add a 

discrimination claim based on a new protected category or even new set of facts; rather, 

his amendment merely would clarify his alternative theory of disparate impact 

discrimination based on the same protected categories as his original charge (race 

and/or color) and the same operative facts (the May 2017 test).” Opp. at 24.

Plaintiff’s attempt to relate his amended charge back to his original charge would 

 

v. Good Samaritan Reg'l Med. Ctr., 832 F.3d 1024, 1044–45 (9th Cir. 2016).

Case 4:18-cv-06271-PJH Document 71 Filed 09/13/19 Page 10 of 11
11

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

be futile. For the same reasons that the DFEH Charge would not reasonably lead to an 

investigation into disparate impact discrimination discussed above, the factual allegations 

in the charge are not “able to bear the weight of the new theory added by amendment.” 

Rodriguez, 265 F.3d at 899. In order to support a disparate impact allegation, plaintiff 

would have to allege additional facts—as plaintiff attempted to do at the September 4, 

2019 hearing. Because any amended charge would have to allege new facts to allege a 

disparate impact theory, it would run afoul of Rodriguez and consequently would not 

relate back to the original charge’s filing date.

As such, plaintiff’s request for leave to amend the civil complaint in this action in 

order to administratively exhaust his disparate impact claim is futile. Therefore, plaintiff’s 

disparate impact theory of discrimination is DISMISSED WITH PREJUDICE.

Because plaintiff’s disparate impact theory is dismissed with prejudice, defendants’ 

administrative motion to extend deadlines to accommodate more discovery based on that 

theory (Dkt. 32) is DENIED AS MOOT.

CONCLUSION

For the foregoing reasons, defendants’ motion to dismiss pursuant to Fed. R. Civ. 

P. 12(b) is DENIED; defendants’ motion to dismiss pursuant to Fed. R. Civ. P. 12(c) is 

GRANTED as explained in this order; plaintiff’s disparate impact theory of discrimination 

is DISMISSED WITH PREJUDICE; and defendants’ administrative motion to modify the 

pretrial order is DENIED AS MOOT.

IT IS SO ORDERED.

Dated: September 13, 2019

PHYLLIS J. HAMILTON

United States District Judge

Case 4:18-cv-06271-PJH Document 71 Filed 09/13/19 Page 11 of 11