Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-02112/USCOURTS-casd-3_11-cv-02112-0/pdf.json

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

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ORLANDO JOHNSON,

Plaintiff,

CASE NO. 11 CV 2112 LAB (WVG)

ORDER DISMISSING CASE FOR

LACK OF SUBJECT MATTER

JURISDICTION

vs.

SUN COMMUNITY FEDERAL CREDIT

UNION,

Defendant.

This is a wrongful termination case. Orlando Johnson alleges that he was mistreated

and fired as Vice President of Lending for Sun Community Federal Credit Union because

he is black and more capable than his superior. Now before the Court is Sun’s motion to

dismiss three of Johnson’s seven claims. They are: (1) racial discrimination in violation of

Title VII of the Civil Rights Act of 1964 and California’s Fair Employment and Housing Act;

(2) negligent supervision; and (3) intentional infliction of emotional distress.

Johnson’s Title VII claim is his only federal claim and the basis for the Court’s

jurisdiction. (SAC ¶¶ 5–6.) If it fails, only state claims will remain, and the Court will decline

to exercise jurisdiction over them. See United Mine Workers of Am. v. Gibbs, 383 U.S. 715,

726 (1966); Noyes v. Kelly Svcs., 488 F.3d 1163, 1173 (9th Cir. 2007); Acri v. Varian, 114

F.3d 999, 1000 (9th Cir. 1997); 28 U.S.C. § 1367(c).

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I. Background

Johnson’s basic story is that the white Chief Financial Officer of Sun, Dale Johnson,

with the support of the white Chief Executive Officer, Harold Walk, sought to terminate

Johnson because he is black and has superior education and experience. (SAC ¶ 22.) This

is almost entirely an inference that Johnson draws from various instances of alleged

mistreatment once Dale Johnson was hired. He alleges very few direct facts to suggest that

his treatment by Dale Johnson and ultimate termination were race-based. 

What are those alleged instances of mistreatment? The Court will list them, in no

particular order:

• Dale Johnson persuaded Walk to send harassing emails to Johnson,

criticizing his performance. (SAC ¶¶ 20(c), 37.)

• Dale Johnson stripped Johnson of a planning role in the construction

of a new Sun branch in Brawley, California, even though he had years

of relevant experience. (SAC ¶¶ 20(d), 38.)

• Dale Johnson prohibited Johnson, despite his experience, from

providing input into Sun’s commercial lending practices. (SAC ¶ 20(e).)

• Walk ignored Johnson’s multiple requests to take paid leave he had

earned. (SAC ¶ 32(a).)

• Decisions that Walk and Dale Johnson made jointly were never

communicated to Johnson. (SAC ¶ 20(b).)

• Johnson was excluded from an audit of Sun by the National Credit

Union Administration, even though he had participated in the audit

process when previously employed by Sun as Internal Audit Manager. 

(SAC ¶ 20(f).)

• Walk and Dale Johnson inflated Johnson’s loan goals as Vice President

of Lending to make it appear to Sun’s Board of Directors that he was

underperforming. (SAC ¶¶ 24–25, 43.)

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• Walk didn’t allow Johnson to work with local realtors in performing his

job duties. (SAC ¶ 32(b).)

• Johnson was denied access to upper management at Sun. Rather

than report to Walk and the Board of Directors, Dale Johnson required

that Johnson report directly to him. (SAC ¶¶ 20(h)-(i), 39.) 

• Walk and Dale Johnson obstructed Johnson’s marketing efforts by

refusing to show up for meetings he scheduled with vendors. (SAC ¶

32(c).)

Several of Johnson’s allegations imply, indirectly, that Dale Johnson is racially biased, and

that his biases were a motivating factor in his treatment of Johnson. Again, in no particular

order: 

• After Dale Johnson was hired, he immediately cancelled regular senior

management meetings that included Johnson and a Hispanic woman,

and met instead with Walk and Sun’s white lawyer. (SAC ¶ 20(a).)

• Dale Johnson stripped Johnson of his responsibilities for facilities

administration and hired a white person as Facilities Manager. (SAC

¶¶ 20(g), 38.)

• Dale Johnson insisted that only he attend the funeral service for Walk’s

mother, which guaranteed that no minorities from Sun would be there. 

(SAC ¶ 20(j).)

• When Johnson complained to the Acting Human Resources Manager

about racial discrimination, Dale Johnson appointed himself Acting

Human Resources Manager and ignored Johnson’s complaint. (SAC

¶ 20(k).)

• Dale Johnson spoke down to Johnson and referenced his ancestry in

an insulting manner. (SAC ¶ 23.)

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• Dale Johnson diminished the responsibilities of Michelle Sampson, a

black woman who had been Assistant Vice President of Card Services

and Facilities. (SAC ¶¶ 26, 42.) 

II. Legal Standard

The premise of Johnson’s opposition to Sun’s motion to dismiss is that the applicable

pleading standard comes from Conley v. Gibson, 355 U.S. 41 (1957). In Conley, the

Supreme Court held that “a complaint should not be dismissed for failure to state a claim

unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his

claim which would entitle him to relief.” Id. at 45–46. Johnson couldn’t be more wrong. The

Supreme Court retired the “no set of facts” standard, and effectively abrogated Conley, in

Bell Atlantic Corp. V. Twombly, 550 U.S. 544, 563 (2007). Twombly raised the bar, requiring

that a complaint’s factual allegations “must be enough to raise a right to relief above the

speculative level.” Id. at 555. The Supreme Court followed up on Twombly in Ashcroft v.

Iqbal, 556 U.S. 662 (2009). Recognizing its holding in Twombly that a complaint must

contain sufficient factual matter to make it facially plausible, the Supreme Court held that a

claim “has facial plausibility when the plaintiff pleads factual content that allows the court to

draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

at 678. This plausibility standard doesn’t amount to a probability requirement, “but it asks

for more than a sheer possibility that a defendant has acted unlawfully.” Id.

Johnson argues that Iqbal doesn’t apply to motions to dismiss brought under Rule

12(b)(6). That’s also wrong. See Maya v. Centex Corp., 658 F.3d 1060, 1067–68 (9th Cir.

2011); Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 n.4 (9th

Cir. 2011). Not only does Iqbal apply, but virtually every district court decision that considers

a motion to dismiss under Rule 12(b)(6) either leads with or relies on it. See, e.g., In re Sony

Grand Wega KDF-E A10/A20 Series Rear Projection HDTV Television Litig., 758 F.Supp.2d

1077, 1086 (S.D. Cal. 2010). Iqbal is an absolutely seminal case in the area of federal civil

procedure. See generally Arthur R. Miller, From Conley to Twombly to Iqbal: A Double Play

on the Federal Rules of Civil Procedure, 60 Duke L.J. 1 (2010). 

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Johnson also argues that “the Federal Rules do not draw distinctions between

pleading facts, ultimate facts, or conclusions of law.” (Opp’n Br. at 8.) Completely false. 

The Supreme Court held in Iqbal that “the tenet that a court must accept as true all of the

allegations contained in a complaint is inapplicable to legal conclusions.” 556 U.S. at 678. 

Indeed, a complaint that simply offers labels and conclusions, or a formulaic recitation of the

elements of a cause of action, is inadequate. Id. “Nor does a complaint suffice,” the

Supreme Court held, “if it tenders naked assertions devoid of further factual enhancement.” 

Id. (internal quotations omitted). See also Warren v. Fox Family Worldwide, Inc., 328 F.3d

1136, 1139 (9th Cir. 2003) (holding that a court needn’t “necessarily assume the truth of

legal conclusions merely because they are cast in the form of factual allegations”).1

III. Discussion

In light of the above pleading standards from Twombly and Iqbal, has Johnson

sufficiently alleged that his treatment and termination by Sun was race-based? His

arguments that he has aren’t helpful; they all start with the premise that Conley applies and

Twombly and Iqbal are irrelevant.

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

“because of such individual’s race . . . .” 42 U.S.C. § 2000e-2(a). In order to establish a Title

VII violation, Johnson must first establish a prima facie case of discrimination by showing

that: “(1) he is a member of a protected class; (2) he was qualified for his position; (3) he

experienced an adverse employment action; and (4) similarly situated individuals outside his

protected class were treated more favorably, or other circumstances surrounding the

adverse action give rise to an inference of discrimination.” Fonseca v. Sysco Food Servs.

of Arizona, Inc., 374 F.3d 840, 847 (9th Cir. 2004) (quoting Peterson v. Hewlett-Packard Co.,

This isn’t terribly relevant to the matter at hand, but the Court should point out a

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discrepancy in Johnson’s pleadings that is equally as careless as his arguments regarding

the appropriate pleading standard. In his complaint, he says he “was laid off by the Central

Union High School District due to state-wide budget constraints” before being approached

by Walk to return to Sun. (SAC ¶¶ 12–13.) In his opposition brief, however, he says that

“when the economy tailspinned, Plaintiff voluntarily left his position with the school district,

whereupon he was immediately solicited for reemployment with Defendant by Harold

Walk . . . .” (Opp’n Br. at 5.) 

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358 F.3d 599, 604 (9th Cir. 2004)). This, of course, is the beginning of the burden-shifting

framework for discrimination claims first set forth in McDonnell Douglas Corp. v. Green, 411

U.S. 792, 802 (1973).

There’s no doubt that Johnson properly alleges elements (1) through (3). The

question is whether he alleges adequate facts to give rise to an inference of discrimination

on the part of Dale Johnson. It’s not nearly enough, under Twombly and Iqbal, that Dale

Johnson happens to be white and that Johnson believes he was substantially mistreated by

him. Were the rule otherwise, there would be no way for an employer to terminate a minority

employee without inviting a Title VII lawsuit. Employers are allowed to treat

employees—including minority employees—unreasonably or unfairly; they just can’t do so

on the basis of the employees’ race (or some other protected characteristic). Or, to put it

another way, Title VII does not forbid Dale Johnson from being power-hungry or authoritarian

as the Chief Financial Officer of Sun. It does not forbid him from having an inchoate grudge

against Johnson that led him to undermine Johnson’s role at Sun. What, then, is Johnson’s

evidence that his treatment at the hands of Dale Johnson and his ultimate termination were

race-based?

First, Johnson claims that Dale Johnson diminished the responsibilities of Michelle

Sampson, another black employee of Sun. He offers no additional evidence, however, that

Sampson’s treatment was race-based, and even if he could, his claim that his own treatment

was race-based would still be completely speculative. He also offers no evidence that nonblack employees similarly situated to Sampson, or to himself, were treated more favorably

than they were. He simply wants the Court to infer that because Dale Johnson effectively

demoted another black employee of Sun he had it out for black employees generally. That

is not a reasonable inference under Iqbal; it is a completely speculative inference based on

very narrow and selective information.

Second, Johnson claims that Dale Johnson made certain decisions in his capacity as

Chief Financial Officer that had the effect of excluding minorities. He cancelled regular

senior management meetings to meet privately with Walk and Sun’s lawyer, and he insisted

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that only he attend the funeral service for Walk’s mother. Here, again, the inference that

Johnson acted with a racial motive is completely speculative. It’s very likely the case

(Johnson does not suggest otherwise) that non-blacks were also excluded from the senior

management meetings and the funeral service. Moreover, Johnson alleges no facts to

support the inference that Dale Johnson harbored such extreme racial prejudice that he was

willing to marginalize all subordinate employees just to marginalize the black ones. 

Third, Johnson alleges that Dale Johnson spoke down to him and insulted his

ancestry. These allegations, however, are suspiciously vague considering their seriousness. 

If Dale Johnson did in fact vocalize racial prejudice in conversations with Johnson, the Court

has to assume Johnson would remember more than the mere fact that his ancestry was

insulted. He would remember, roughly, when the statements were made, where they were

made, and what they consisted of — and he would incorporate those details into his

complaint. The Court simply cannot reasonably infer that because Dale Johnson referenced

Johnson’s ancestry in an insulting manner his entire relationship with Johnson was motivated

by racial prejudice, and that, as Johnson put it, Dale Johnson “masterminded the elimination

of minorities at SCFCU.” (Opp’n Br. at 5.)

Johnson’s race is only part of his theory of treatment and termination at Sun. His full

theory is that Dale Johnson was determined from the outset to undermine him because he

is black and because he has more education and experience. (SAC ¶¶ 22, 36.) Johnson

has certainly painted a picture of harsh treatment by Dale Johnson, but that’s very different

from painting a picture of racial discrimination. See Odima v. Westin Tucson Hotel Co., 991

F.2d 595, 602 (9th Cir. 1993) (“The district court must not substitute its own judgment about

whether the employment decisions were wise, or even fair, for that of the employer.”). 

Considering all of Johnson’s allegations, and the relevant pleading standards (which he

fundamentally misunderstands), the Court finds that Johnson hasn’t pleaded adequate facts

to establish a prima facie case of racial discrimination under Title VII. Instead, the facts he

does allege still leave the Court guessing as to whether Dale Johnson was truly motivated

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by racial prejudice, and thus give rise only “a sheer possibility that [Sun] has acted

unlawfully.” Iqbal, 556 U.S. at 678. That is inadequate.

Finally, the Court is the one separating Johnson’s evidence of general mistreatment

from his evidence that Dale Johnson was motivated by racial prejudice, this is an attempt to

focus in on what the actual basis of a Title VII claim could be. Johnson himself doesn’t make

that attempt. In his opposition brief, for example, he says that he “bases his claim on the

color of his skin, the arrival of Dale Johnson, and the chaos that followed Johnson’s arrival

— all designed to cause Plaintiff to quit.” (Opp’n Br. at 5.) He says that “any action,

personnel-speaking or otherwise, when designed to prompt a quit, can be taken, and here

was, as actions racially motivated to eliminate Plaintiff, a black, from the workplace.” So,

even though Johnson tries to present independent evidence that Dale Johnson was

motivated by racial prejudice, his Title VII claim, on his own pleading, relies simply on the

fact that Dale Johnson is white, the fact that Johnson is black, and the allegation that Dale

Johnson mistreated him. Again, Twombly and Iqbal don’t open the gate for a claim that’s

argued so speculatively. 

For the above reasons, Johnson’s Title VII claim is DISMISSED WITH PREJUDICE.

III. Conclusion

With Johnson’s Title VII claim out of the picture, his six remaining claims arise under

state law. The Court declines to exercise supplemental jurisdiction over those claims, and

therefore DISMISSES the remainder of this case WITHOUT PREJUDICE.

IT IS SO ORDERED.

DATED: April 18, 2012

HONORABLE LARRY ALAN BURNS

United States District Judge

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