Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-1_04-cv-01093/USCOURTS-arwd-1_04-cv-01093-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:2000 Job Discrimination (Race)

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The Court can resolve both motions in a single Memorandum Opinion and Order.

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IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF ARKANSAS

EL DORADO DIVISION

PATRICIA GATSON PLAINTIFF 

 

VS. Case No. 04-CV-1093

JIM PRIDE and H & R BLOCK, Inc. DEFENDANTS

MEMORANDUM OPINION

This lawsuit involves Patricia Gatson’s allegations of racial discrimination in violation of

Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e, et seq.) by Defendants Jim Pride

and H & R Block, Inc. Two motions are before the Court : Separate Defendant Jim Pride’s 1

(“Pride”) Motion to Dismiss. (Doc. 8) and H & R Block, Inc.’s (“H & R Block”) Motion to

Dismiss (Doc. 27). Gatson has responded to Pride’s Motion (Doc. 12) and to H & R Block’s

Motion (Doc. 30). The Court finds these motions ripe for consideration. 

I. Procedural Background

Initially, there was some confusion about the entity or entities Gatson intended to sue. In

Gatson’s pro se complaint, she listed the parties as “Pride H & R Block.” Magistrate Judge

Bobby Shepherd directed service on both Jim Pride and H & R Block, Inc., at Pride’s business

address in Pine Bluff, Arkansas. Pride then filed an answer to Gatson’s complaint, but H & R

Block, Inc., did not, so the Clerk of the Court entered a default against H & R Block, Inc., for

failing to answer or otherwise respond to the complaint. H & R Block moved to set aside this

default, and this Court granted the motion, set aside the default, and referred the matter to Judge

Shepherd to properly effect service on H & R Block, Inc. Judge Shepherd submitted an

addendum and questionnaire to Gatson so the Court could determine which entity or entities

Gatson intended to sue. Gatson returned the addendum and, based on her responses, the

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(Doc. 31). 2

(Doc. 33). 3

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Magistrate Judge directed service on H & R Block, Inc., this time through its agent for service of

process in Kansas City, Missouri.

Instead of filing an answer, H & R Block has moved for dismissal of Gatson’s complaint

for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) and

alternatively for failure to state a claim pursuant to Rule 12(b)(6). Pride has moved for the

dismissal of Gatson’s complaint for failure to state a claim, pursuant to Rule 12(b)(6).

Because Pride supported its motion with affidavits that are helpful to the resolution of its

motion, this Court exercised its discretion to construe Pride’s motion to dismiss as one for

summary judgment. On August 1, 2005, this Court issued an order advising the parties that the

motion to dismiss would be considered as a motion for summary judgment and directing the

parties to submit any additional materials to be considered on the motion by August 22, 2005.2

On August 15, 2005, Gatson submitted additional materials in support of her motion, including a

check stub and W-2 Wage and Tax Statement for 2004, a letter from Hope V. Bean addressed to

a Mrs. Alvern Kinley, and a letter informing the recipient of the date and time for an update

class.3

II. Standards of Review

In ruling upon a Rule 12(b)(6) to dismiss, the Court is required to accept the factual

allegations of Gatson’s Complaint as true. Grissom v. Waterloo Industries, Inc., 902 F.Supp.

867, 868 (E.D.Ark. 1995)(citations omitted). The Court may grant the motion only if, after so

viewing the pleadings, it is patently clear that there is no set of facts that Gatson could prove

thereunder which would entitle her to the relief sought in the Complaint. Frey v. City of

Herculaneum, 44 F.3d 667, 671 (8th Cir.1995). Rule 12(b) also provides that when a party

submits additional matters in support of or in opposition to a motion to dismiss for failure to state

a claim, the court may (if the additional matters are not excluded by the court) treat the motion as

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one for summary judgment pursuant to Rule 56.

The standard of review for summary judgment is familiar and well established. The

Federal Rules of Civil Procedure provide that when a party moves for summary judgment:

The judgment sought shall be rendered forthwith if the pleadings,

depositions, answers to interrogatories, and admissions on file show that

there is no genuine issue as to material fact and that the moving party is

entitled to judgment as a matter of law.

Fed. R. Civ. P. 56(c); Krenik v. County of Le Sueur, 47 F.3d 953 (8th Cir. 1995). The Supreme

Court has issued the following guidelines to help determine whether this standard has been

satisfied:

The inquiry performed is the threshold inquiry of determining whether there

is a need for trial . . . whether, in other words, there are genuine factual issues

that properly can be resolved only by a finder of fact because they may

reasonably be resolved in favor of either party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). See also Agristor Leasing v.

Farrow, 826 F.2d 372 (8th Cir. 1987); Niagra of Wisconsin Paper Corp. v. Paper Indus. UnionManagement Pension Fund, 800 F.2d 742, 746 (8th Cir. 1986). 

The burden of proof is on the moving party to set forth the basis of its motion. Donovan

v. Harrah’s Maryland Heights Corp., 289 F.3d 527, 529 (8 Cir. 2002), citing Celotex Corp v. th

Catrett, 477 U.S. 317, 323 (1986). The Court must view all facts and inferences in the light

most favorable to the nonmoving party. Id., citing Matsushia Elec. Indus. Co. v. Zenith Radio,

475 U.S. 574, 587 (1986). The Eight Circuit Court of Appeals, in Scheer Const. Co. v. Greater

Huron Development Corp., 700 F.2d 463, 465 (8th Cir. 1983), quoting Burst v. Adolph Coors

Co., 650 F.2d 930, 932 (8th Cir. 1981), in a case involving the entry of summary judgment,

stated:

[w]hen a motion for summary judgment is made and supported by affidavits,

the party opposing the motion may not rest on the allegations in his pleadings

but must resist the motion by setting forth specific facts that raise a genuine

issue of fact for trial. 

Under Rule 12(b)(2), when personal jurisdiction is challenged, the plaintiff has 

the burden to show that jurisdiction exists. Rebsamen Ins., Inc. v. Mutual Holdings (Bermuda)

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See Aff. of Bret G. Wilson ¶ 4. 4

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Ltd., 228 F.R.D. 637, 640 (E.D.Ark. 2005)(citations omitted). To defeat a motion to dismiss for

lack of personal jurisdiction, the nonmoving party need only make a prima facie showing of

jurisdiction. Id. The party seeking to establish the court's in personam jurisdiction carries the

burden of proof and the burden does not shift to the party challenging jurisdiction. Id. When

considering whether personal jurisdiction exists under a state’s long-arm statute, it is

permissible to consider matters outside the pleadings. Stevens v. Redwing, 146 F.3d 538, 543

(8th Cir. 1998).

III. Discussion

A. The evidence before the Court shows that H & R Block, Inc., has

insufficient contacts with the State of Arkansas for this Court to exercise personal

jurisdiction over it.

Sufficient contacts exist for personal jurisdiction purposes when the defendant's conduct

and connection with the forum state are such that he should reasonably anticipate being haled

into court there, and when maintenance of the suit does not offend traditional notions of fair

play and substantial justice. Rebsamen Ins., Inc. , 228 F.R.D. at 640. In assessing the

defendant's "reasonable anticipation," there must be some act by which the defendant

purposefully avails itself of the privilege of conducting activities within the forum State, thus

invoking the benefits and protections of its laws. Id. The Eighth Circuit uses a five factor test

to determine the sufficiency of the defendant's contacts: (1) the nature and quality of contacts

with the forum state; (2) the quantity of such contacts; (3) the relation of the cause of action to

the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5)

convenience of the parties, the first three factors being the most important. Id.

The non-controverted evidence shows that H & R Block has insufficient contacts with

the State of Arkansas and this Court is without personal jurisdiction over it. H & R Block, Inc.,

is a holding company, conducts no business directly, and is not a franchisor of Pride or other tax

offices. H & R Block does not provide goods or services to consumers in the State of 4

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Id. ¶¶ 5-6. 5

Id. ¶ 6. 6

Id. ¶ 7. 7

Id. ¶ 9. 8

See H & R Block, Inc.’s Mot. to Dismiss, Ex. B. 9

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Arkansas, and it is not authorized nor does it conduct business in the State of Arkansas. H & R 5

Block is not engaged in sales activities and does not advertise in Arkansas. H & R Block does

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not own any real property or other property in the State of Arkansas and does not have

telephone listings or bank accounts in the State of Arkansas. H & R Block has not entered into 7

any agreement with Pride, does not have any policy or procedure guidelines under which Pride

could operate, and has not entered into any agreement with Gatson and did not hire her to

prepare any tax returns. The franchise agreement that Pride operated under was entered into 8

between H & R Block Eastern and Pride, Inc. Plaintiff has offered no proof that H & R Block 9

Eastern is merely H & R Block’s alter ego. Plaintiff’s proof is insufficient to show the nature,

quantity or quality of H & R Block’s contacts with the State of Arkansas. Pursuant to Rule

12(b)(2) the Court finds H & R Block’s Motion to Dismiss for Lack of Personal Jurisdiction

should be and hereby is granted.

B. Pride does not meet the Title VII definition of “employer.”

The dismissal of H & R Block leaves Pride as the only defendant in this lawsuit. Pride

argues that it cannot meet Title VII’s definition of an employer, so Gatson cannot prove any set

of facts entitling her to relief against it. The Court agrees. Pride has attached two affidavits to

its motion to dismiss, listing its quarterly employee reports for the years 2003 and 2004. Pride

also argues that he is sued in his individual capacity, and persons cannot be individually liable

under Title VII. Pride contends that Pride Incorporated, is the only entity which had any

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The Court will assume for purposes of this Order that Separate Defendant Pride is 10

correctly named in Gatson’s Complaint.

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employment relationship with Gatson.10

Gatson responds, arguing that when she was hired she responded to a newspaper

advertisement stating that tax preparers were needed for H & R Block, she was sent to school

for H & R Block, and she was never told that she was working for Pride, Inc. (Instead of H & R

Block). Title VII makes it unlawful for an employer to discriminate against an employee

because of that employee’s race. 42 U.S.C. § 2000e. An employee is defined as an individual

employed by an employer. 42 U.S.C. 2000e(f). Title VII defines an employer as:

a person engaged in an industry affecting commerce who has fifteen or more

employees for each working day in each of twenty or more calendar weeks

in the current or preceding calendar year, and any agent of such a person. 

42 U.S.C. § 2000e(b).

To be liable under Title VII, Pride must be considered Gatson’s employer, within this

statutory definition. Pride’s affidavits listing its quarterly employee reports show that it did not

employ fifteen or more employees for each working day for twenty or more calendar weeks for

the years 2003 and 2004. Gatson has not presented any evidence to the contrary or identified

specific facts that raise a genuine issue of fact for trial. 

IV. Conclusion

For the reasons discussed herein the Court finds the Motions to Dismiss should be and

hereby are granted. This lawsuit is hereby dismissed with prejudice as to Jim Pride and

without prejudice as to H & R Block, Inc. A judgment of even date consistent with this

Opinion will issue.

IT IS SO ORDERED this 24th day of August, 2005.

 /s/ Harry F. Barnes 

Hon. Harry F. Barnes

U.S. District Judge

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