Court Opinion

ID: 2644129
Source: CourtListenerOpinion
Date Created: 2013-11-26 18:28:48.378575+00
Date Added: 2024-06-11T09:01:54.417874
License: Public Domain

FILED
                                                 United States Court of Appeals
                    UNITED STATES COURT OF APPEALS       Tenth Circuit

                           FOR THE TENTH CIRCUIT                      November 26, 2013

                                                                     Elisabeth A. Shumaker
                                                                         Clerk of Court
LAFAYE ADAMS,

             Plaintiff - Appellant,

v.                                                        No. 13-1162
                                              (D.C. No. 1:11-CV-02333-LTB-CBS)
FEDEX GROUND PACKAGE                                       (D. Colo.)
SYSTEM, INC.; MARK HARRIS, in his
individual capacity and official capacity
as Senior Manager; MARK POOLE, in
his individual capacity and official
capacity as P&D Manager,

             Defendants - Appellees.

                            ORDER AND JUDGMENT*

Before KELLY, TYMKOVICH, and PHILLIPS, Circuit Judges.

      LaFaye Adams appeals pro se from a district court order that dismissed her

employment-discrimination suit against FedEx Ground Package System, Inc., and

*
      After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
two of the company’s managers, Mark Harris and Mark Poole. We have jurisdiction

under 28 U.S.C. § 1291 and affirm.

                                     BACKGROUND

       Adams “is an African-American, senior citizen.” R. at 416. In April 2009, she

and FedEx entered into a “Pick-up and Delivery Contractor Operating Agreement,”

id. at 228, designating Adams as an independent contractor assigned “to provide

daily pick-up and delivery service on behalf of FedEx,” id. at 232.

       Adams bought a route and attempted to hire qualified drivers, but Harris and

Poole allegedly “called and harassed and threatened [her] on whom [sic] and how

[she] was going to service [her] route on a daily basis.” Id. at 421. Four months

after executing the operating agreement, FedEx terminated her services, citing a lack

of integrity.

       Pursuant to a binding-arbitration clause in the operating agreement, Adams

demanded arbitration, claiming “[w]rongful termination and unclean hands” and

“[r]etaliation and [d]iscrimination based on sex, race and age.” Id. at 262. She

sought $85,000 in “monetary compensation for the lost [sic] of [her] contract or

reinstatement of contract and replacement of truck.” Id.

       After a two-day arbitration hearing, the arbitrator “denie[d] the claims asserted

by [Adams],” id. at 265, and ruled in favor of FedEx:

       the problems experienced by [FedEx] with [Adams] were overwhelming
       and unprecedented. The problems included extreme levels of pick-up
       and delivery failures (e.g. the unchallenged testimony of Mark Harris
       was that the level of such situations from Mrs. Adams in four months

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       exceeded those experienced by all 24 other contractors in the entire year
       of 2010), cooperation issues[,] . . . failure of service issues[,] . . . serious
       integrity problems engaged in by employees of Mrs. Adams[,] . . . and
       noncompliance with federal regulatory standards . . . . These problems
       also . . . justified [FedEx’s] termination of the contract here.

Id. at 264.

       Seven months later, Adams filed suit pro se. In her second amended

complaint, she did not attempt to vacate the arbitration award; rather, she alleged that

FedEx, Harris, and Poole violated her rights under 42 U.S.C. § 1981; Title VII,

42 U.S.C. §§ 2000e to 2000e-17; the Age Discrimination in Employment Act

(ADEA), 29 U.S.C. § 621-634; the Colorado Consumer Protection Act (CCPA),

Colo. Rev. Stat. §§ 6-1-101 to -115; and common law theories of fraud, defamation,

“economic duress,” R. at 454, and “declaratory judgment,” id. at 457.1 The

defendants moved to dismiss the complaint under Fed. R. Civ. P. 12(b)(6).

       A magistrate judge recommended granting the motion because, under the

doctrine of issue preclusion, the issues raised by Adams’s claims under § 1981, Title

VII, the ADEA, and the common-law theories of fraud, economic duress, defamation,

and declaratory judgment were decided in the prior arbitration proceeding. The

magistrate judge further concluded that Adams’s CCPA claim failed to state a claim

for relief and that her claim for declaratory judgment failed on that ground as well as

1
       Adams also asserted violations of 42 U.S.C. § 1983 and Britain’s Equality Act
of 2010. On appeal, however, she has abandoned those claims. See Opening Aplt.
Br. at 15.

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the issue-preclusion ground. The district court agreed and dismissed Adams’s

complaint, prompting this appeal.

                                      DISCUSSION

                                I. Standards of Review

       We review a district court’s dismissal under Fed. R. Civ. P. 12(b)(6) de novo,

“accept[ing] as true all well-pleaded factual allegations in the complaint and

view[ing] them in the light most favorable to the plaintiff.” Burnett v. Mortg. Elec.

Registration Sys., Inc., 706 F.3d 1231, 1235 (10th Cir. 2013). “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)). We

liberally construe a pro se litigant’s pleadings, holding them “to a less stringent

standard than formal pleadings drafted by lawyers.” Hall v. Bellmon, 935 F.2d 1106,

1110 (10th Cir. 1991).

                                  II. Issue Preclusion

       Adams argues that issue preclusion is inapplicable because “an arbitration

proceeding cannot provide an adequate substitute for a judicial trial of important

federal issues.” Aplt. Opening Br. at 9. We disagree.

       In Alexander v. Gardner-Denver Co., 415 U.S. 36, 59-60 (1974), the Supreme

Court held that arbitration decisions arising from collective-bargaining agreements

do not have preclusive effect in later Title VII litigation. But the instant case does

                                           -4-
not involve a collective-bargaining agreement, which is a critical distinction. See

Wright v. Universal Mar. Serv. Corp., 525 U.S. 70, 77 (1998); see, e.g., Gilmer v.

Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991) (holding, in a case not

involving a collective-bargaining agreement, “that statutory claims [such as those

brought under the ADEA] may be the subject of an arbitration agreement”).

         Thus, given that the arbitration agreement in Adams’s case arose from the

private Operating Agreement between Adams and FedEx, rather than from a

collective-bargaining agreement, the results of the arbitration may have preclusive

effect if the elements of issue preclusion are met.

         Issue preclusion generally applies when four elements are satisfied:

         (1) the issue previously decided is identical with the one presented in
         the action in question, (2) the prior action has been finally adjudicated
         on the merits, (3) the party against whom the doctrine is invoked was a
         party, or in privity with a party, to the prior adjudication, and (4) the
         party against whom the doctrine is raised had a full and fair opportunity
         to litigate the issue in the prior action.

Park Lake Res. Ltd. Liab. v. U.S. Dep’t of Agric., 378 F.3d 1132, 1136 (10th Cir.

2004).

         Adams argues that the first requirement of issue preclusion (identical issues) is

absent because the arbitrator had “‘the authority only to conclude whether the

termination . . . was within the terms of th[e] Agreement.’” Aplt. Opening Br. at 10

(quoting R. at 256). But even so, she did not seek to vacate the arbitrator’s award

due to any lack of authority, and she had expressly submitted her sex, race, and age

claims to arbitration. Those claims were clearly decided by the arbitrator, given his

                                            -5-
statements that he was denying Adams’s claims and finding in favor of FedEx

because serious performance issues justified her termination.

       Next, Adams contends that she lacked a full and fair opportunity to litigate her

claims because the Operating Agreement limited discovery in the arbitration

proceedings to damages. Adams demanded arbitration, however, despite that

limitation, and she did not move afterward to vacate the arbitrator’s award.

Additionally, Adams does not suggest how the limitation on discovery affected her

case. And we note that during the two-day arbitration hearing, Adams submitted

evidence and supporting argument. Under these circumstances, Adams cannot assert

that she was denied a full and fair opportunity to litigate her issues at arbitration.

       We conclude that Adams is precluded from re-litigating the issue of whether

FedEx terminated the Operating Agreement for an improper purpose. Moreover,

with that issue conclusively established against Adams, her discrimination claims and

her common-law claims for fraud, economic duress,2 defamation, and declaratory

judgment, necessarily fail because they are all premised on an improper termination.

                  III. Colorado Consumer Protection Act (CCPA)

       Adams alleged that FedEx’s “business scheme” is deceptive in violation of the

CCPA. R. at 450. Specifically, she claimed that “FedEx knew at the time it induced

2
      In addition to being issue precluded, Adams’s claim for economic duress
appears infirm because it is a basis on which to void a contract, see BDG Int’l, Inc. v.
Bowers, 303 P.3d 140, 145 (Colo. App. 2013), and Adams is not seeking to void the
Operating Agreement.

                                           -6-
[her] and over 3,000 . . . consumers into signing the ‘Operation Agreement’

(Employment Contract) that there was little to no likelihood that [she] would ever

receive any benefit from being a ‘business owner.’” Id.

      An actionable CCPA claim requires:

      (1) that the defendant engaged in an unfair or deceptive trade practice;
      (2) that the challenged practice occurred in the course of defendant’s
      business, vocation, or occupation;
      (3) that it significantly impacts the public as actual or potential
      consumers of the defendant’s goods, services, or property;
      (4) that the plaintiff suffered injury in fact to a legally protected interest;
      and
      (5) that the challenged practice caused the plaintiff’s injury.

Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142, 146-47

(Colo. 2003). We conclude that Adams has failed to allege facts that would state a

plausible CCPA claim. We focus on the most glaring infirmity: the public-impact

requirement.

      The CCPA requires “that the defendant’s challenged practice [must]

significantly impact[ ] the public as actual or potential consumers of the defendant’s

goods, services, or property.” Id. at 149. Adams alleges she was a consumer who

“bec[a]me an employee under the ‘Operation Agreement’ (Employment Contract).”

R. at 450 (emphasis added). But the CCPA does not purport to provide a cause of

action for private employment disputes. Indeed, “if a wrong is private in nature, and

does not affect the public, a claim is not actionable under the CCPA.” Rhino Linings,
62 P.3d at 149.

                                           -7-
      “[W]hether a challenged practice significantly impacts the public within the

context of a CCPA claim” depends on: “(1) the number of consumers directly

affected by the challenged practice, (2) the relative sophistication and bargaining

power of the consumers affected by the challenged practice, and (3) evidence that the

challenged practice has previously impacted other consumers or has the significant

potential to do so in the future.” Id. While Adams does allege that she and 3,000

other people signed Operating Agreements with FedEx, she did not indicate what

percentage of those people were harmed. Further, her complaint addressed neither

the relative sophistication and bargaining power of other consumers nor the prior and

potential impacts on other consumers. Consequently, we conclude that Adams’s

CCPA fails for lack of allegations showing a significant public impact.

                             IV. Declaratory Judgment

      In addition to determining above that Adams’s declaratory-judgment claim is

issue precluded, we further determine that this claim fails because there are no rights

left to be declared under her other failed claims.

                                     CONCLUSION

      The judgment of the district court is affirmed.

                                                Entered for the Court

                                                Paul J. Kelly, Jr.
                                                Circuit Judge

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