Court Opinion

ID: 2981951
Source: CourtListenerOpinion
Date Created: 2015-09-22 19:57:25.739916+00
Date Added: 2024-06-11T15:02:15.278514
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                          Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                 File Name: 13a0221p.06

              UNITED STATES COURT OF APPEALS
                              FOR THE SIXTH CIRCUIT
                                _________________

                                                X
                                                 -
 SERGE ADAMOV,
                                                 -
                             Plaintiff-Appellant,
                                                 -
                                                 -
                                                     No. 12-6114
           v.
                                                 ,
                                                  >
                                                 -
                          Defendant-Appellee. -
 U.S. BANK NATIONAL ASSOCIATION,
                                                N
                    Appeal from the United States District Court
                for the Western District of Kentucky at Louisville.
              No. 3:09-cv-00868—Charles R. Simpson, District Judge.
                                Argued: June 18, 2013
                        Decided and Filed: August 13, 2013
              Before: KEITH, MOORE, and ROGERS, Circuit Judges.

                                 _________________

                                      COUNSEL
ARGUED: Ben Basil, PRIDDY, CUTLER, MILLER & MEADE PLLC, Louisville,
Kentucky, for Appellant. Doreen Canton, TAFT, STETTINIUS & HOLLISTER LLP,
Cincinnati, Ohio, for Appellee. ON BRIEF: Ben Basil, Don Meade, PRIDDY,
CUTLER, MILLER & MEADE PLLC, Louisville, Kentucky, for Appellant. Doreen
Canton, Ryan M. Martin, TAFT, STETTINIUS & HOLLISTER LLP, Cincinnati, Ohio,
for Appellee.
                                 _________________

                                      OPINION
                                 _________________

       ROGERS, Circuit Judge. Serge Adamov brought suit against his employer, U.S.
Bank, and two of his superiors claiming unlawful discharge due to his Azerbaijani
national origin and in retaliation for his complaints of discrimination. U.S. Bank claims
that Adamov was discharged because he made a personal loan to a bank customer
contrary to bank policy. The district court dismissed Adamov’s retaliation claim sua

                                           1
No. 12-6114        Adamov v. U.S. Bank Nat’l Assoc.                               Page 2

sponte on jurisdictional grounds, based on the court’s belief that the claim had not been
exhausted. The court later determined on summary judgment that Adamov’s national-
origin-discrimination claim failed. Although the district court properly granted summary
judgment on the discrimination claim, the retaliation claim should not have been
dismissed sua sponte because the administrative-exhaustion requirement is not
jurisdictional.

        Adamov immigrated to the United States from Azerbaijan, a former Soviet
republic, in 1992. He began working at the predecessor of U.S. Bank in 1998, was
promoted over the course of his employment, and at the time of his termination was a
district manager in Louisville, Kentucky. Adamov maintained an excellent employment
record during his time at U.S. Bank. He was a “high-performing district manager”—for
example, receiving “Top Producer” honors in Louisville for twenty quarters—and
received positive performance reviews.

        In 2005, U.S. Bank hired Rick Hartnack as Vice-Chairman, which was a position
three levels up the corporate hierarchy from Adamov. Adamov reported to Regional
Manager Arlene Mockapetris, who reported to Executive Vice President Steven
SaLoutos, who reported to Hartnack. On the handful of occasions on which Hartnack
and Adamov interacted, Hartnack made statements that Adamov found offensive. When
the two first met, in or around 2005, Adamov told Hartnack he was from Louisville, to
which Hartnack responded “Oh, your accent gives you up.” On another occasion,
Hartnack approached Adamov to congratulate him for a sales award he won, but stated
during their conversation “Immigrants don’t usually climb the corporate ladder.”
Finally, while Hartnack was giving a speech at a conference of district managers in
2008, he made the comment “I was talking to my managers and they looked at me like
I was speaking Russian.” Adamov, who had believed himself to be next in line for a
promotion, took the statement as “a public slap in the face.” At that time, Adamov
began to make up his mind that the reason he had not yet been promoted was that
Hartnack harbored animus based on Adamov’s national origin.
No. 12-6114        Adamov v. U.S. Bank Nat’l Assoc.                                Page 3

       Adamov brought these concerns to Mockapetris, his direct supervisor, some time
in 2009. Mockapetris spoke with Hartnack and then assured Adamov that Hartnack was
not prejudiced against him. Shortly thereafter, U.S. Bank opened an investigation into
Adamov’s banking activities.

       According to U.S. Bank, it received a request for an investigation from its
corporate Anti-Money-Laundering Department on July 6, 2009. In addition to overseas
wire-transfer activity, the investigation revealed a loan that Adamov had made to a
friend and U.S. Bank customer named Dmitri Shtapov in 2007. Adamov had given
Shtapov a check for $10,000, which Shtapov repaid without interest after approximately
two weeks. Adamov characterizes the loan as a informal transaction with a college
friend whom Adamov brought to the bank as a customer years earlier, when Adamov’s
employment began. Despite this characterization, the U.S. Bank investigation concluded
that employee loans to bank customers violated the bank’s ethics policy, and U.S. Bank
terminated Adamov’s employment on August 31, 2009.

       The bank submitted a September 2008 ethics policy to the district court in
support of its summary-judgment motion, and the court based its analysis in part on that
document. Although the policy went into effect after the date of the loan, no prior policy
was introduced by either Adamov or the bank. The 2008 policy stated, “employees and
their families are prohibited from borrowing money from (or lending money to)
customers (other than financial institutions), suppliers, other employees, or independent
contractors.” There was no testimony that the policy differed prior to the date of that
policy, and witnesses for the bank testified that making a personal loan to a customer is
an ethics violation.

       Adamov claims in his appellate brief that he was surprised that the investigation
led to this result, both because he considered the infraction, if it was one, to be minor,
and because his previous interactions with the Anti-Money-Laundering Department had
led him to believe that his activity was acceptable. However, his testimony indicated
that the Anti-Money-Laundering Department had approved only his wire-transfer
No. 12-6114        Adamov v. U.S. Bank Nat’l Assoc.                                Page 4

activity with overseas family, and that personal loans to bank customers were never at
issue prior to the 2009 investigation.

       Following his termination, Adamov filed state-law discrimination claims in
Kentucky state court against the bank, Hartnack, and SaLoutos. The defendants
removed the suit to federal district court based on diversity jurisdiction. The defendants
filed a motion to dismiss, claiming that Adamov’s state law claims were preempted by
the National Bank Act, 12 U.S.C. § 24. The bank claimed that the Act preempts state
discrimination laws regarding the employment and termination of certain national bank
officers. As part of his response, Adamov averred that he would be amending his
complaint to include non-preempted federal discrimination claims. At the same time,
he submitted a draft EEOC charge, which was unsigned and undated and contained only
a national-origin-discrimination claim. Before the motion was decided, Adamov
actually filed his charge—which pled national origin discrimination and, unlike the draft
charge, retaliation—with the EEOC. When he received a “right to sue” letter from the
EEOC based on his charge, Adamov filed a motion to amend his complaint, which the
court granted while simultaneously dismissing as moot U.S. Bank’s pending motion to
dismiss the original complaint.

       The defendants then filed a motion to dismiss Adamov’s amended complaint,
arguing that he was not permitted to bring his claims against the individual defendants
and that the factual allegations were insufficient as a matter of law, and renewing their
preemption argument. The second motion to dismiss did not allege failure to exhaust
administrative remedies, and Adamov did not include any of his EEOC documents in his
response. Nevertheless, the district court relied on the draft charge attached to
Adamov’s response to the first motion to dismiss and ruled sua sponte on the exhaustion
issue. The court concluded that Adamov had not exhausted his retaliation claim and that
the court therefore lacked subject-matter jurisdiction to hear the claim. The court also
dismissed Adamov’s claims against Hartnack and SaLoutos for failure to state a claim.

       Following discovery, the district court granted the bank’s motion for summary
judgment on the remaining national-origin-discrimination claim. Adamov appealed. He
No. 12-6114            Adamov v. U.S. Bank Nat’l Assoc.                                             Page 5

also filed a motion in the district court to supplement the record, seeking to add the
EEOC charge that he filed as well as his “right to sue” letter from the EEOC. The
district court issued an order stating that it lacked jurisdiction to supplement the record,
due to the pendency of this appeal. The court also noted “that Fed. R. App. P. 10(e) does
not empower a district court to accept materials which alter the record after a notice of
appeal has been filed. The purpose of appellate rule 10(e) is to ‘allow the district court
to correct omissions from or misstatements in the record for appeal, not to introduce new
evidence in the court of appeals.’” Id. (quoting S & E Shipping Corp. v. Chesapeake &
Ohio Ry. Co., 678 F.2d 636, 641 n.10 (6th Cir. 1982) (internal citation omitted)).

         With respect to Adamov’s national-origin-discrimination claim, he failed to
demonstrate that the legitimate, nondiscriminatory reason the bank offered to explain his
termination was in fact pretext for unlawful discrimination.1 See McDonnell Douglas
Corp. v. Green, 411 U.S. 792, 804–05 (1973). Adamov separates his challenge into two
points of error—first, that the court improperly relied upon a later version of the bank’s
ethics policy, and second, that the court erred in its analysis of the circumstantial
evidence—but both claims fail because Adamov simply failed to carry his burden of
proving pretext. Although the court appears to have based its decision on a version of
the written ethics policy that was enacted after the date of Adamov’s loan to Shtapov,
the bank has produced additional evidence that Adamov was fired for making a personal
loan to a bank customer in violation of bank policy. Moreover, Adamov has failed to
introduce evidence of a contrary bank policy or sufficient circumstantial evidence to
convince any rational trier of fact that his termination was secretly a result of national-
origin discrimination.2

         Adamov’s opening brief on appeal alleges that a 2004 policy existed that did not
forbid employee-to-customer loans; however, in response to the bank’s brief, he

         1
          The parties appear to concede, and it is safe to assume for purposes of this case, that Adamov
made out a prima facie case of discrimination, i.e., “(1) that he was a member of a protected class; (2) that
he was discharged; (3) that he was qualified for the position held; and (4) that he was replaced by someone
outside of [his] protected class.” Geiger v. Tower Auto., 579 F.3d 614, 622 (6th Cir. 2009).
         2
          Although the bank must produce accurate documentation on proper request, we do not have an
adequate record on which to rule on that issue.
No. 12-6114        Adamov v. U.S. Bank Nat’l Assoc.                                Page 6

concedes in his reply brief that the sole 2004 document presented to the court does not
constitute an enforceable ethics policy. He maintains, however, that “[t]his does not
negate the fact that the Bank has failed to produce evidence in support of its motion that
it had an ethics policy that expressly prohibited loans to friends as of the date the loan
was made.” This argument mischaracterizes the burden on the bank and improperly
shifts the burden of showing pretext away from Adamov. It was Adamov who needed
to “demonstrate by competent evidence that the presumptively valid reasons for his
rejection were in fact a coverup for a . . . discriminatory decision.” See McDonnell
Douglas, 411 U.S. at 805. The bank satisfied its burden by offering a legitimate
nondiscriminatory reason for Adamov’s discharge. See id. at 802. The bank introduced
affidavits and testimony of bank officials explaining the ethics policies, as well as
evidence that it conducted an independent investigation that revealed activity that its
employees believed violated company policy. The bank’s “burden is one of production,
not persuasion; it can involve no credibility assessment.” See Reeves v. Sanderson
Plumbing Prods., Inc., 530 U.S. 133, 142 (2000) (internal quotation marks omitted).
Even if a written policy did not exist at the time of Adamov’s loan, Adamov’s burden
required him to show a genuine question of material fact that the reasons given by the
bank and its employees were not the true reasons for terminating him. See McDonnell
Douglas, 411 U.S. at 804–05.

       Adamov claims that the remaining evidence demonstrates pretext, but that
evidence is either irrelevant or insufficient. First, he argues that contradictions about
Hartnack’s role in the termination decision suggest that his termination was the result
of national-origin discrimination. However, the testimony is clear that the decision to
terminate Adamov did not begin or end with Hartnack. There is no evidence in the
record that suggests that Hartnack initiated the investigation, nor was there any
testimony tending to support Adamov’s theory that Hartnack’s discriminatory animus
even steered the company toward the decision to terminate Adamov. While Mockapetris
testified that she wasn’t aware of any involvement Hartnack may have had in the
investigation, Adamov suggests that SaLoutos’s testimony casts doubt on Mockapetris’s
version of events. SaLoutos described Hartnack’s involvement by saying that “he was
No. 12-6114          Adamov v. U.S. Bank Nat’l Assoc.                               Page 7

aware [of] what we were going to be doing” and “I would share with him any—any
senior management termination information.” He added that the two men discussed the
matter at least once on the telephone. Adamov also relies on a note that says “Ricks
support” with reference to the termination decision. None of this evidence supports
Adamov’s argument that Hartnack was the “primary figure in the decision making chain
of command” that made the termination decision. The evidence clearly supports the
bank’s showing that the investigation began wholly independently of Hartnack’s
influence and was brought to Hartnack when it had already received the support of the
investigation team in Anti-Money-Laundering Department and Adamov’s direct
supervisor. And although both SaLoutos and Mockapetris claim ultimate responsibility
for the decision to fire Adamov, this does nothing to support the conclusion that it was
in fact Hartnack who led the charge.

          Second, Adamov argues that the temporal proximity of the investigation to his
complaints of discrimination indicates pretext. Adamov does not make an argument that
the temporal proximity of Hartnack’s comments—which were spaced out over time
between 2005 and 2008—to his termination is significant. Rather, he argues that his
complaint of discrimination, which did not occur until 2009, occurred suspiciously close
in time to the bank’s investigation and to his subsequent termination. While this
argument is relevant to a claim that he was fired in retaliation for his complaint—a claim
that was dismissed by the district court—it is less probative with respect to the idea that
the decision to terminate Adamov’s employment was made on the basis of his national
origin.

          For these reasons, the district court was correct in granting summary judgment
to the bank on the national-origin-discrimination claim.

          The district court did err, however, in applying a jurisdictional analysis to the
question of exhaustion of Adamov’s retaliation claim. Because Congress has not
explicitly restricted the court’s jurisdiction in cases where a plaintiff has not exhausted
administrative remedies, a district court may not dismiss the claim on jurisdictional
grounds. This conclusion is supported by the Supreme Court’s determination in
No. 12-6114        Adamov v. U.S. Bank Nat’l Assoc.                                  Page 8

Arbaugh v. Y & H Corp., 546 U.S. 500 (2006), that Title VII’s employee-numerosity
requirement is not jurisdictional. Id. at 504. In Hill v. Nicholson, 383 F. App’x 503 (6th
Cir. 2010), we held in an unpublished opinion that, in light of the Supreme Court’s
decision in Arbaugh, administrative exhaustion is not a jurisdictional requirement under
Title VII. Id. at 508. This conclusion has also been reached by other circuits. See, e.g.,
Vera v. McHugh, 622 F.3d 17, 29–30 (1st Cir. 2010); Douglas v. Donovan, 559 F.3d
549, 556 n.4 (D.C. Cir. 2009).

       The Supreme Court held in Arbaugh that “when Congress does not rank a
statutory limitation on coverage as jurisdictional, courts should treat the restriction as
nonjurisdictional in character.” 546 U.S. at 516. No such jurisdictional limitation exists
with respect to Title VII’s administrative-exhaustion requirements. Title VII discusses
the EEOC process generally in 42 U.S.C. § 2000e-5. The statute describes the statute
of limitations for filing a charge with the EEOC and the EEOC’s duties to investigate
and respond to the employee. 42 U.S.C. § 2000e-5(b), (e)(1); Id § 2000e-5(b). It also
states that, if the EEOC dismisses a charge, or if the EEOC or the Attorney General has
not filed suit or entered into a conciliation agreement with the employer after 180 days,
the EEOC or the Attorney General must notify the employee, who may then file a
lawsuit himself. Id. § 2000e-5(f)(1). The statute says no more about the exhaustion
requirement or any connection between the EEOC process and a limit on courts’
jurisdiction to hear Title VII cases.

       The Arbaugh decision emphasized the deliberately broad grant of access to
federal courts in 42 U.S.C. § 2000e-5(f)(3), which was enacted to avoid even the
amount-in-controversy limitations otherwise in effect at the time of Title VII’s passage
and now “serve[s] simply to underscore Congress’ intention to provide a federal forum
for the adjudication of Title VII claims.” Arbaugh, 546 U.S. at 505–06. The Court’s
reasoning in Arbaugh counseled against erecting bars to Title VII claims where Congress
does not clearly seek to limit jurisdiction with a restriction. 546 U.S. at 515–16.

       [W]e think it the sounder course to refrain from constricting [28 U.S.C.]
       § 1331 or Title VII’s jurisdictional provision, 42 U.S.C. § 2000e-5(f)(3),
       and to leave the ball in Congress’ court. If the Legislature clearly states
No. 12-6114          Adamov v. U.S. Bank Nat’l Assoc.                               Page 9

       that a threshold limitation on a statute’s scope shall count as
       jurisdictional, then courts and litigants will be duly instructed and will
       not be left to wrestle with the issue.

Id. (footnote omitted). Where, as here, the restriction is not expressed in jurisdictional
terms in the statute, see 42 U.S.C. § 2000e-5(f)(1), the presence of congressional intent
to restrict § 1331 and Title VII’s jurisdiction-granting provision is as clearly lacking as
it was in Arbaugh.

       The district court properly granted summary judgment on Adamov’s
discrimination claim, and we affirm that decision. However, given that the question of
administrative exhaustion is nonjurisdictional, U.S. Bank forfeited the argument that
Adamov did not exhaust his retaliation claim by failing to raise it to the district court.
Accordingly, we reverse the dismissal of the retaliation claim and remand to the district
court for further proceedings consistent with this opinion.