Court Opinion

ID: 2664384
Source: CourtListenerOpinion
Date Created: 2014-04-04 03:50:47.061125+00
Date Added: 2024-06-11T09:13:34.647892
License: Public Domain

UNITED STATES DISTRICT COURT
                               FOR THE DISTRICT OF COLUMBIA

   BOBBI JEAN SEARS,

                            Plaintiff,

                          v.
                                                             Civil Action 10-02313 (HHK)
   MAGNOLIA PLUMBING, INC.,

                            and

   JOSEPH J. MAGNOLIA, INC.,

                            Defendants.

                           MEMORANDUM OPINION AND ORDER

          Plaintiff Bobbi Jean Sears brings this action against Magnolia Plumbing, Inc. and Joseph

Magnolia, Inc., asserting claims of sexual discrimination, harassment, and retaliation in violation

of Title VII of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e et seq., and common

law tort causes of action. Before the Court is Joseph J. Magnolia, Inc.’s motion to dismiss

pursuant to Federal Rule of Civil Procedure 12(b)(6) [#7]. Upon consideration of the motion, the

opposition thereto, and the record of the case, the Court concludes that the motion should be

denied.

                                         I. BACKGROUND

          Bobbi Sears was hired as a payroll administrator at Magnolia Plumbing, Inc. in May

2005. She remained in this position until April 2008. Sears alleges that, throughout these three

years, she was subjected to repeated and frequent sexual harassment by a number of Magnolia

Plumbing, Inc.’s male employees. This harassment included inappropriate phone calls at all

hours, comments about her physical appearance, unwanted touching, false sexual rumors, sexual

advances, photographs of genitalia sent to her cellular telephone, an anonymous gift of lingerie,
and an “April Fools” request for her to process a fake work order with sexually explicit content.

According to Sears, despite her numerous oral and written complaints about this conduct,

Magnolia Plumbing, Inc.’s management failed to take any meaningful remedial action. To the

contrary, she avers that various supervisors retaliated against her for making such complaints.

After enduring three years of harassment and management’s refusal to address the behavior,

Sears resigned from her position.

                                         II. ANALYSIS

       Joseph J. Magnolia, Inc. argues that Sears has failed to state a claim against it because she

does not allege that the company employed her or that any of its employees engaged in any of the

harassing or discriminatory conduct at issue.1 Joseph J. Magnolia, Inc. points out that the

allegations in Sears’s complaint relate almost exclusively to Magnolia Plumbing, Inc. and its

employees. Indeed, Sears makes only the following factual allegations involving Joseph J.

Magnolia, Inc.: (1) Joseph J. Magnolia, Inc. and Magnolia Plumbing, Inc. maintain their main

offices at the same location—600 Gallatin Street NE Washington, DC 20017, see Compl. ¶¶

5–6;2 (2) “The website ‘MagnoliaCompanies.com’ refers to both Defendant companies on its

website, and has a single toll free number to reach both companies,” id. ¶ 7; and (3) “Job

applicants for both companies are directed to send resumes to the D.C. Office at Human

       1
                  Under Rule 12(b)(6), a court must dismiss a complaint or any portion thereof that
fails to state a claim upon which relief may be granted. FED . R. CIV . P. 12(b)(6). To survive a
Rule 12(b)(6) motion, a complaint must “state a claim to relief that is plausible on its face.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “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.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2000).
       2
               This location is where Sears worked for the majority of her three years of
employment with Magnolia Plumbing, Inc., and where many of the alleged harassing and
discriminatory acts took place. See Compl. ¶ 9.

                                                 2
Resources Department, 600 Gallatin Street, NE Washington, DC 20017.” Id.3 Joseph J.

Magnolia, Inc. argues that these allegations are insufficient to state a claim against it.

       Sears responds that Joseph J. Magnolia, Inc. and Magnolia Plumbing, Inc. are jointly

liable for the actions of each others’ employees because they should be treated as a “single

employer.” See, e.g., EEOC v. St. Francis Xavier Parochial Sch., 928 F. Supp. 29, 33 (D.D.C.

1996) (“[S]uperficially distinct entities that represent a single, integrated enterprise may be

exposed to liability as a single employer.”), rev’d on other grounds, 177 F.3d 621 (D.C. Cir.

1997). Sears’s argument has merit.

       To determine whether two separate corporate entities can be considered a “single

employer” for liability purposes,4 courts examine four factors: (1) interrelation of operations; (2)

common management; (3) centralized control of labor relations and personnel; and (4) common

ownership or financial control. See Woodland v. Viacom, Inc., 569 F. Supp. 2d 83, 87 (D.D.C.

2008); Tewelde v. Albright, 89 F. Supp. 2d 12, 17 (D.D.C. 2000).5 “Although the absence or

presence of any single factor is not conclusive, the control over the elements of labor relations is

       3
                In Sears’s opposition to Joseph J. Magnolia, Inc.’s motion to dismiss, Sears
introduces for the first time an array of allegations, supported by various exhibits, regarding
Joseph J. Magnolia, Inc. and its relationship to both Magnolia Plumbing, Inc. and the conduct
described in Sears’s complaint. But “[f]actual allegations in memoranda of law may not be
considered when deciding a Rule 12(b)(6) motion.” Sindram v. Merriwether, 506 F. Supp. 2d 7,
10 (D.D.C. 2007); see also Taylor v. FDIC, 132 F.3d 753, 762 (D.C. Cir. 1997) (noting that, in
deciding a Rule 12(b)(6) motion, courts “may not draw upon facts from outside the pleadings”).
Accordingly, the Court will disregard these allegations.
       4
                The “single employer” test is also sometimes referred to as the “integrated
enterprise” test. Tewelde v. Albright, 89 F. Supp. 2d 12, 16 n.5 (D.D.C. 2000).
       5
                These factors were originally promulgated by the National Labor Relations Board
(“NLRB”) for use in NLRB cases to determine whether two entities comprise a single employer
in the context of labor disputes. See Radio & Television Broad. Technicians Local Union 1264
v. Broad. Serv. of Mobile, Inc., 380 U.S. 255, 256 (1965). Thereafter, courts began applying
them in Title VII and related cases. St. Francis Xavier, 928 F. Supp. at 33 (citing cases).

                                                   3
a central concern.” St. Francis Xavier, 928 F. Supp. at 33; cf. RC Aluminum Indus., Inc. v.

NLRB, 326 F.3d 235, 239 (D.C. Cir. 2003) (noting that not all four factors must be satisfied for a

court to find a “single employer” under the test). The Court considers each factor in turn.

               1.        Interrelation of Operations

       In examining whether two corporations have interrelated operations, courts look at

various “indicia of interrelatedness of operations,” including “combined accounting records,

bank accounts, lines of credit, payroll preparation, telephone numbers or offices.” Woodland,

569 F. Supp. 2d at 87. Here, Sears alleges at least two indicators of interrelatedness—she avers

that Magnolia Plumbing, Inc. and Joseph J. Magnolia, Inc. share a telephone number and a

common address. Compl. ¶¶ 5–7. Additionally, she alleges that they market themselves on the

same website. Id. ¶ 7.

               2.        Common Management

       To determine if two corporate entities have common management, “the court focuses on

the existence of common directors and officers who exercise control over the daily operations

and employment practices of the entities.” Hunter v. Ark Rests. Corp., 3 F. Supp. 2d 9, 18

(D.D.C. 1998); see also St. Francis Xavier, 928 F. Supp. at 34. To undertake this inquiry, the

Court first takes judicial notice of certain corporate resolutions filed by the two companies with

the Maryland Department of Assessments and Taxation. See Covad Commc’ns Co. v. Bell Atl.

Corp., 407 F.3d 1220, 1222 (D.C. Cir. 2005) (noting that, when reviewing a motion to dismiss

for failure to state a claim, a court may take judicial notice of facts on the public record).6 The

       6
                 On January 15, 2008, each corporation filed a resolution changing its resident
agent; these resolutions are signed by the corporations’ respective Boards of Directors. These
corporate resolutions are publicly available through the Maryland Department of Assessments
and Taxation’s website and, as verifiable public documents, are subject to judicial notice. See
FED . R. EVID . 201(b) (“A judicially noticed fact must be one not subject to reasonable dispute in

                                                  4
companies’ corporate resolutions indicate that Magnolia Plumbing, Inc. and Joseph J. Magnolia,

Inc. have the same six individuals serving on their respective Boards of Directors—John D.

Magnolia, Joseph M. Magnolia, Sr., Thomas Gambriel, Joseph M. Magnolia, Jr., Christian D.

Magnolia, and Dominic D. Magnolia. In other words, the membership of the Boards of Directors

for the two companies are identical. Further, Sears alleges that at least two, and perhaps three,7

of the common directors are part of the management at Magnolia Plumbing, Inc. See Compl. ¶

88 (noting that she had made formal complaints to “the owner of [Magnolia Plumbing, Inc.], Mr.

Joe Magnolia, Sr.”); id. ¶ 158 (alleging that Dominic Magnolia was a member of “Magnolia’s

management”); see also id. ¶ 138 (referring to Dominic Magnolia as one of her “supervisors”).

Drawing all reasonable inferences in her favor, Sears’s allegations suggest that these common

directors exercise at least some control over the daily operations at Magnolia Plumbing, Inc.

               3.      Centralized Control of Labor Relations and Personnel

        “The centralized control of labor relations factor is the most important one in the [single

employer] test.” Richard v. Bell Atl. Corp., 976 F. Supp. 40, 44 (D.D.C. 1997); see also

Tewelde, 89 F. Supp. 2d at 17–18. This control must be “not merely potential, but ‘actual and

that it is . . . capable of accurate and ready determination by resort to sources whose accuracy
cannot reasonably be questioned.”); see also Kaempe v. Myers, 367 F.3d 958, 965 (D.C. Cir.
2004) (finding documents recorded by the Patent Trademark Office to be “public records subject
to judicial notice on a motion to dismiss”); Ebersohl v. Bechtel Corp., 2010 WL 2164451, at *2
(S.D. Ill. May 31, 2010) (taking judicial notice of corporate records maintained online by the
Illinois Secretary of State); Access 4 All v. Oak Spring, Inc., 2005 WL 1212663, at *2 n.16 (M.D.
Fla. May 20, 2005) (taking judicial notice of the records of the Florida Department of State,
Division of Corporations, which reflected that one plaintiff was an officer and director of the
other). Notably, Sears attached these resolutions to her opposition to the motion to dismiss, and
Joseph J. Magnolia, Inc. did not dispute their authenticity.
       7
             Additionally, many of Sears’s allegations involve the conduct of a supervisor
named “Chris Magnolia.” It is unclear whether “Chris Magnolia” is the same person as Christian
D. Magnolia who sits on both companies’ Boards of Directors.

                                                 5
active control of day-to-day labor practices.’” Woodland, 569 F. Supp. 2d at 88 (quoting St.

Francis Xavier, 928 F. Supp. at 34). Here, Sears alleges that Magnolia Plumbing, Inc. and

Joseph J. Magnolia, Inc. share the same human resources department. See Compl. ¶ 7. A shared

human resources department strongly signifies centralized control over the day-to-day

employment decisions of the two companies. Cf. Scheidecker v. Arvig Enters., 122 F. Supp. 2d

1031, 1039 (D. Minn. 2000) (finding that the plaintiff had demonstrated centralized control of

labor relations where the two corporate entities had a “shared human resources department”).

               4.      Common Ownership or Financial Control

       Sears does not allege that Joseph J. Magnolia, Inc. and Magnolia Plumbing, Inc. are

commonly owned or have any financial ownership interest in each other.

                                      *       *       *

       Sears’s complaint is sufficient to withstand the instant motion to dismiss. While sparse,

the factual allegations of the complaint—and the information judicially noticed regarding the

composition of the corporate defendants’ Boards of Directors—render it “plausible” that Joseph

J. Magnolia, Inc. and Magnolia Plumbing, Inc. may be regarded as a “single employer” for

liability purposes. The test for determining the issue is fact intensive, however, and courts

understandably have been reluctant to dismiss affiliated corporate entities at the Rule 12(b)(6)

stage prior to discovery. See DeLa Cruz v. Piccari Press, 521 F. Supp. 2d 424, 430 (E.D. Pa.

2007) (citing cases). Here, too, the Court will deny Joseph J. Magnolia, Inc.’s motion to dismiss.

Sears’s complaint, taken together with the judicially-noticed corporate resolutions, contains

sufficient factual matter to “allow[] the court to draw the reasonable inference that [Joseph J.

Magnolia, Inc.] is liable for the misconduct alleged.” Iqbal, 129 S.Ct. at 1949.

                                                  6
                                    III. CONCLUSION

     For the foregoing reasons, it is this 21st day of April 2011 hereby

     ORDERED that defendant’s Motion to Dismiss Defendant Joseph J. Magnolia, Inc. [#7]

is DENIED.

                                                   Henry H. Kennedy, Jr.
                                                   United States District Judge

                                               7