2000, Dynegy Acquisition Corporation, a subsidiary of Dynegy, acquired and merged with Extant.
After the merger, Dynegy Global Connect, L.P. was formed as a Delaware limited partnership. The
general partner was Dynegy Connect GP, Inc. Dynegy Global Communications, Inc. (“DGC”),
Telstra Wholesale, Inc., and Mantiss Information Corp. were the limited parmers. DGC employed
the Extant employees who stayed on after the merger, including Diggs. DGC was a subsidiary of
Dynegy and provided high-speed communications services to wholesale customers in the United
States and abroad. DGC was a Delaware corporation with its principal places of operation in Aurora
and Englewood, Colorado.

Diggs held the position of regional director of sales for DGC. As regional director, he was
responsible for selling broadband services to customers throughout the United States. He worked out
of an office located in Oakbrook, Illinois. Diggs was employed by DGC until February 4, 2002,
when he was laid off as part of a reduction in force. On May 14, 2003, DGC was bought by
360networks Acquisition.

Diggs filed a charge of discrimination under the ADA and ADEA with the Equal
Employment Opportunity Commission. Those charges were dismissed on February 14, 2003. Diggs
then filed this suit against Dynegy on May 14, 2003. Diggs, who was fifty-one years old when he
was laid off, alleges that he was terminated on the basis of his age in violation of the ADEA. He also
alleges he was terminated on the basis of his disability, severe sleep apnea, in violation of the ADA.'
Moreover, in his Complaint, Diggs also contends he was denied the necessary leave to seck
treatment for his disability, in violation of the FLMA. Finally, Diggs alleges that at the time of his

termination, he was owed sales commissions from various contracts on which he worked while

' Diggs also contends he requested reasonable accommodations for his sleep apnea and that
tequest was denied. He claims he was subjected to constant harassment regarding his sleep apnea.

4


In sum, Diggs has failed to point to evidence that any of the three circumstances outlined by
the Seventh Circuit justifying the imposition of affiliate liability on Dynegy applies in this case.
Because Diggs has pointed to no evidence that would create a genuine issue of material fact as to
Dynegy’s status as Diggs’ employer, and because Diggs’ federal claims depend on Dynegy being
Diggs’ employer, Dynegy is entitled to summary judgment on each of Diggs’ federal claims.®

Conclusion

For the foregoing reasons, Dynegy’s motion for s judgment is granted. It is so

PN

MARVIN E. ASPEN
United States District Judge

ordered,

faite?

Oct. 17, 2000) (refusing to impose liability on parent company where parent and subsidiary had
overlapping officers and a letter was written on parent company’s stationery).

§ We also dismiss Diggs’ remaining state law claim for lack of subject matter jurisdiction.

In his complaint, Diggs includes a count for the payment of unpaid commissions. He asserts no
jurisdictional basis for this count nor does he allege under what statute he brings this claim. In its
motion for summary judgment, defendant presumes Diggs is claiming violations of the Illinois Wage
Payment and Collections Act and that Diggs is asking the court to exercise supplemental jurisdiction
under 28 U.S.C. § 1367. (Def. Mem. at 1 n.1, 8.) In his response memorandum, Diggs seems to
acknowledge as much by arguing that Dynegy meets the criteria for “employer” under his federal
claims “and the Illinois Wage Payment and Collection Act [820 II]. Comp. Stat. Ann. 115/1-15 (West
1999)}.” (Pl. Mem. at 3.) Diggs then proceeds to analyze his apparent state law claim under the
Papa test. Because all the federal claims have been dismissed, however, we should refrain from
resolving this apparent state law claim on the merits. See 28 U.S.C. § 1367(c)(3) (“[T]he district
courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if . . . the
district court has dismissed all claims over which it has original jurisdiction”); see also Wright v.
Associated Ins. Cos., Inc., 29 F.3d 1244, 1251 (7th Cir. 1994) (“[T]he general rule is that, when all
federal claims are dismissed before trial, the district court should relinquish jurisdiction over pendant
state-law claims rather than resolving them on the merits.”).

9



that context. See Worth v. Tyer, 276 F.3d 249, 260 (7th Cir. 2001). The Seventh Circuit noted that
“the principles governing affiliate liability should apply ‘across the full range of American law’
unless a particular statute provide[s] an alternative test.” Jd. (quoting Papa, 166 F.3d at 941).

Diggs has not established that any of the theories of liability under Papa apply to Dynegy in
this case. Diggs acknowledges that the traditional conditions necessary for piercing the corporate
veil are not present in this case. (Pl. Mem. at 4).? Diggs also concedes that the second situation set
forth in Papa is not present in this case because the parent corporation, Dynegy, did not form the
subsidiary to avoid liability under discrimination laws. (P1. Mem. at 4).‘

In his memorandum in opposition to summary judgment, Diggs argues only the third
situation applies to this case. (Pl. Mem. at 4.) He contends the relevant inquiry is whether the
defendant “might have directed” Diggs’ termination and that he raises a genuine issue of material
fact as to that issue. In support of its motion for summary judgment, Dynegy counters that the
decision to lay off Diggs was made by the DGC President of Sales and two DGC Vice Presidents of
Sales. Dynegy was not involved in the decision to lay off Diggs and offered no input as to whether

to lay him off. These facts remain undisputed. As discussed above, having failed to submit his

? The parties agree that the inquiry used in Papa should apply to each of Diggs’ claims. (PI.
Mem. at 3; Def. Mem. at 7-8).

3 The undisputed evidence demonstrates that from October 2000 (when Extant was acquired
and merged with Dynegy Acquisition Corporation) until May 14, 2003 (when DGC was purchased
by 360networks Acquisition), Dynegy and DGC had separate articles of incorporation and did not
have the same directors or officers. They did have some officers that overlapped. Dynegy and DGC
held separate officers’ meetings and Board of Directors’ meetings. Dynegy and DGC filed separate
state tax retums and maintained independent accounting records. Dynegy did not represent to
creditors that it was responsible for the obligations of DGC and they maintained separate bank
accounts and lines of credit. They had separate headquarters and each had its own human resources
department.

* In 2002, DGC had approximately 200 employees, more than the minimum number of
employees required to be independently liable under any of the statutes at issue in this case.

6



employed by DGC. Dynegy moved for summary judgment contending there is no genuine issue of
material fact as to Dynegy’s status as an “employer” of Diggs.

Discussion

Dynegy contends it cannot be held liable for DGC’s alleged improper acts because it never
employed Diggs and all of Diggs’ claims depend on his allegation of Dynegy being his employer.
Diggs admits he was employed by DGC, a subsidiary of Dynegy. (Compl. 77). In Papa v. Katy
Industries, Inc., tae Seventh Circuit acknowledged the general principle that an affiliate corporation.
forfeits its limited liability only if it acts to forfeit it; for instance, by “failing to comply with
statutory conditions of corporate status, or misleading creditors of its affiliate, or configuring the
corporate group to defeat statutory jurisdiction, or commanding the affiliate to violate the right of
one of the affiliate’s employees.” 166 F.3d 937, 941 (7th Cir. 1999). The parties agree that Papa
applies to this case, in that it governs the inquiry as to whether affiliated companies should be
considered a single employer. /d. at 940-41.

In Papa, the Seventh Circuit set forth a test to determine whether an employer with too few
employees to be covered by the ADA, Title VI, and ADEA should nonetheless be covered because
it is part of an affiliated group of corporations who in the aggregate have the requisite number of
employees. Id. at 938. The court identified three situations in which corporate entities that are
affiliated should be considered a single employer: 1) where the conditions for piercing the corporate
veil are present; 2) where an enterprise splits itself into a number of corporations, each with fewer
than the statutory minimum number of employees in order to avoid liability under the discrimination
laws; or 3) where the parent corporation took the specific action of which the employee of its
subsidiary is complaining. Jd. at 940-41. Though this test was formulated to apply in the small

employer context, the Seventh Circuit has explained that “nothing in Papa limits its application” to


corporation directed the layoff of plaintiff. Id. Such is the case here. Moreover, Diggs has offered
no evidence whatsoever that Dynegy or DGC selected him to be one of the employees laid off based
on an impermissible ground.

In opposing Dynegy’s motion for summary judgment, Diggs also points to his own affidavit
in which he states that he worked for Dynegy, he was located in Dynegy corporate office space in
Oakbrook, Illinois, was paid by Dynegy from Dynegy accounts with checks using the Dynegy logo,
and was offered severance from the Dynegy, Inc. Severance Pay Plan after being terminated by
Dynegy. (Pl. Aff. {J 1-4.) Diggs’ conclusory statements that Dynegy employed and terminated him,
unsupported by specific facts, are not sufficient to raise a genuine issue of material fact. See, e.g.,
Hall v. Bodine Elec. Co., 276 F.3d 345, 354 (7th Cir. 2002) (noting that “[i]t is well-settled that
conclusory allegations and self-serving affidavits, without support in the record, do not create a
triable issue of fact”); see also LINC Fin. Corp. v. Onwuteaka, 129 F.3d 917, 920 (7th Cir. 1997)
(“[T]he object of Rule 56(e) is not to replace conclusory allegations of the complaint or answer with
conclusory allegations of an affidavit). Similarly, it is unclear how Diggs could know that he was
paid from Dynegy accounts. See Fed.R.Civ.P. 56(e) (“opposing affidavits shall be made on personal
knowledge”); see also Malec v. Sanford, 191 F.R.D. 581, 584-85 (N.D.II1. 2000) ([T]he portions of

[plaintiff]’s affidavit in which he attests to facts he could not possibly know is improper.”).>

5 The remaining exhibits Diggs submitted (including: the DGC checks bearing the Dynegy
logo; a severance plan entitled, “Dynegy, Inc. Severance Pay Plan, Agreement, and Release”; and a
DGC pay stub that has the Dynegy headquarters address) are not sufficient to permit a reasonable
inference that Dynegy directed the allegedly discriminatory termination or that Dynegy meets any of
the other Papa situations. At most, it demonstrates that Dynegy and DGC had some integrated
operations, which under Papa, is not enough to hold Dynegy liable for DGC’s allegedly improper
actions. See Papa, 166 F.3d at 939, 942-43 (refusing to impose affiliate liability on parent company
where parent company administered subsidiary’s pension plan, fixed the salaries of subsidiary’s
employees, funded the subsidiary, had authority to order the layoff, and where computer operations
were integrated); see also Mohr v. WCKG, Inc., No. 00-C1146, 2000 WL 1535991, at * 3 (N.D.III.

8


Minute Order Form (06/97)

TS. ( United States District Court, Northern District of Illinois

OOFRCP4(m) OLocal Rule 41.1 OOFRCP41(a\(1) CM FRCP41(a)(2).

al) {For further detail see order attached to the original minute order.]

sor Magistrate Dude Marvin Aspen “Than Assigned Judge
CASE NUMBER 03 C 3223 DATE 11/21/2003
CASE Diggs vs. Dynegy, Inc.
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.]
DOCKET ENTRY:
qd) Oo Filed motion of [ use listing in “Motion” box above.]
(2) o Brief in support of motion due
(3) o Answer brief to motion due____. Reply to answer briefdue____.
(4) a Ruling/Hearingon__ssetfor__—_at
(5) Oo Status hearing{held/continued to] (set for/re-set for]on__——ssetfor__———_at
(6) a Pretrial conference[held/continued to] [set for/re-setfor]on__—setfor ss at_—
(7) a Trial[set for/re-set for]on___—__at
(8) a [Bench/Jury trial] [Hearing] held/continuedto__—_at
(9) im This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

(10) | {Other docket entry] Enter Memorandum Opinion and Order: Diggs has failed to point to evidence that
any of the three circumstances outlined by the Seventh Circuit justifying the imposition of affiliate liability on
Dynegy applies in this case. Because Diggs has pointed to no evidence that would create a genuine issue of
material fact as to Dynegy’s status as Diggs’ employer, and because Diggs’ federal claims depend on Dynegy
being Diggs’ employer, Dynegy is entitled to summary judgment on each of Diggs’ federal claims. Dnyegy’s
motion for summary judgment (7-1) is granted. The status hearing set for 11/25/03 is stricken.

No notices required, advised in open court.

‘No notices required. number of notices

Document
Number

vo | Notices mailed by judge’s staff.

Notified counsel by telephone. NOV 24 2003

Docketing to mail notices. ~
| Mail AO 450 form. ; sigs vio

Copy to judge/magistrate judge. wnninon

- ay
courtroom 1 ya obese date mailed notice
GL deputy’s Ly ‘ ; ou
initials _ said
NI Dasettinie repeived in

central Ys Office railing deputy initials



Local Rule 56.1 response or additional statement of material facts, Diggs cannot point to additional
facts he supplies in the analysis section of his memorandum or the exhibits he attached thereto to
oppose defendant’s motion for summary judgment. Midwest Imports, Ltd. v. Coval, 71 F.3d 1311,
1317 (7th Cir. 1995); see also Malec v. Sanford, 191 F.R.D. 581, 583 (N.D.IIL. 2000) (“[S]upporting
documents submitted with a motion that are not referred to in the statement of facts will be
ignored”). As such, Diggs has not raised a genuine issue of material fact as to whether Dynegy
might have directed Diggs’ termination.

Assuming the facts provided in the analysis section of Diggs’ memorandum and attached
exhibits were properly before the court, they still do not raise a genuine issue of material fact as to
whether Dynegy directed Diggs’ termination. For instance, Diggs contends the evidence shows that
it was Dynegy that decided to leave the telecommunications business and it alone made the decision
to lay off employees. The only evidence he offers to support this contention is a letter from DGC’s
President and Director of Human Resources dated March 5, 2003, one month after Diggs was laid
off. It states that Dynegy is “making strides toward exiting the telecommunications industry in the
near future.” (Pl. Exh. D.) The letter is a reminder of Diggs’ responsibility to keep trade secrets
confidential and contains no information about the February layoff, the decision-making process for
layoffs, or Dynegy’s role in directing layoffs. Even if Dynegy did direct the lay off, Diggs has not
even suggested that Dynegy had any input into whether Diggs would be one of the employees
selected for the layoff. In Papa, the Seventh Circuit explained that a plaintiff must establish that the
parent company selected him for the layoff on some forbidden ground. Papa, 166 F.3d at 942. The
parent company in Papa did order the subsidiary to curtail operations, which in tum led to layoffs,
but the plaintiff had submitted no evidence that the parent company was responsible for him being

selected for a layoff. id. Asa result, the court held that the plaintiff could not show that the parent



statement required of the moving party will be deemed to be admitted. . .” L.R. 56.1(b)(3)(B); see
also Malec v. Sanford, 191 F.R.D. 581, 584 (N.D.III. 2000) (“Essentially, the penalty for failing to
properly respond to a movant’s 56.1(a) statement is usually summary judgment for the movant (at
least if the movant has done his or her job correctly) because the movant’s factual allegations are
deemed admitted.”). Accordingly, we “depart from our usual posture of construing all facts in favor
of the non-moving party.” Midwest Imports, Ltd. v. Coval, 71 F.3d 1311, 1313 (7th Cir. 1995).
Instead, we accept as true all material facts properly set forth in Dynegy’s 56.1 statement of material
facts. See id.

Furthermore, Diggs did not submit a statement of additional facts opposing summary
judgment. A statement of additional facts filed pursuant to Local Rule 56.1(b)(3)(B) “provides the
only acceptable means of. . . presenting additional facts to the district court.” Midwest Imports, Ltd.
v. Coval, 71 F.3d 1311, 1317 (7th Cir. 1995) (affirming district court’s finding that additional facts
set forth in the party’s memorandum in opposition to summary judgment were not properly before
the court and should not be considered). Therefore, by failing to file a 56.1 statement of additional
facts, Diggs has lost his ability to bring additional facts before this court. Jd. at 1313, 1316-17. As
such, the following factual background is substantially culled from the defendant’s statement of
undisputed facts, -

Background

Dynegy is an Illinois corporation whose principal place of business is in Houston, Texas.
Dynegy is an energy company with direct and indirect corporate subsidiaries engaged in the sale and
distribution of electricity, natural gas, and liquid gas to wholesale and retail customers. Diggs began
working for Extant, Inc., in 1999. Extant was an e-commerce company providing carrier transport,

operations support systems and solutions to integrated communications providers. On September 29,


answers to interrogatories, and admissions on file, together with the affidavits, if any, which it
believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477
US. 317, 323 (1986) (citations omitted). Once the moving party has met this burden of production,
the nonmoving party “must set forth specific facts showing that there is a genuine issue for trial.”
Fed. R. Civ. P. 56(c). In deciding whether summary judgment is appropriate, we must accept the
nonmoving party's evidence as true, and draw all inferences in that party's favor. See Anderson, 477
US. at 255,

Local Rule 56.1

Local Rule 56.1 sets forth the requirements for supporting and opposing motions for
summary judgment. In addition to its memorandum in support of its motion for summary judgment,
the movant is required to submit a statement of undisputed material facts that it contends entitles it to
judgment as a matter of law. The nonmovant must file a Supporting memorandum of law, opposing
affidavits or other materials referred to in Fed.R.Civ.P. 56(e), and submit a concise response that
must contain, “a response to each numbered paragraph in the moving party’s statement, including, in
the case of any disagreement, specific references to the affidavits, parts of the record, and other
supporting materials replied upon.” L.R. 56.1(b)(3)(A). Moreover, the nonmoving party shall file its
own statement of any additional facts that require the denial of summary judgment. L.R.
56.1(b)(3)(B). The Seventh Circuit has “consistently and repeatedly upheld a district court’s
discretion to require strict compliance with its local rules governing summary judgment.” Bordelon
v. Chicago Sch. Reform Bd. of Trustees, 233 F.3d 524, 527 (7th Cir. 2000) (quoting Markham v.
White, 172 F.3d 486, 490 (7th Cir. 1990)). Diggs has violated Local Rule 56.1 by failing to respond
to Dynegy’s statement of undisputed facts submitted pursuant to Local Rule 56.1. The Rule is clear:

by failing to properly respond to a movant’s 56.1 statement, “all material facts set forth in the


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION DOCKETE>
RAYMOND J. DIGGS, ) NOV 2 4 2093
Plaintiff, }
y. } Case No. 03 C 3223
DYNEGY, INC. }
Defendant. }

MEMORANDUM OPINION AND ORDER

MARVIN E, ASPEN, District Judge:
Plaintiff, Raymond Diggs (“Diggs”) filed a four-count Complaint against Defendant,

Dynegy, Inc, (“Dynegy”), alleging violations of the Age Discrimination in Employment Act, 29
U.S.C. § 621, et seq. (“ADEA”), the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq.
(“ADA”), and the Family and Medical Leave Act, 29 U.S.C. § 2601, et seg. (‘FLMA”). Diggs also
added claims for unpaid commissions. Dynegy moved for summary judgment on the basis that it
was not Diggs’ employer. For the reasons stated below, we grant Dynegy’s motion for summary
judgment.
indard evi

Summary judgment is proper only when “there is no genuine issue as to any material fact and
the moving party is entitled to a judgment as a matter of law.” Fed R. Civ. P. 56(c). A genuine issue
for trial exists when “the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). This standard places

the initial burden on the moving party to identify “those portions of the pleadings, depositions,

\\