Court Opinion

ID: 2653751
Source: CourtListenerOpinion
Date Created: 2014-02-19 17:58:20.482862+00
Date Added: 2024-06-11T12:56:55.616570
License: Public Domain

NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                                _____________

                                      No. 13-1583
                                     _____________

                       ELLSWORTH D. PATTERSON, JR.;
                    KAREN PATTERSON, individually and as h/w,
                                                  Appellants

                                            v.

         GLORY FOODS, INC.; MCCALL FARMS, INC.; JOHN DOES 1-10
                             ______________

                    On Appeal from the United States District Court
                             for the District of New Jersey
                               (D.C. No. 3-10-cv-06831)
                     District Judge: Honorable Freda L. Wolfson
                                    ______________

                      Submitted Under Third Circuit LAR 34.1(a)
                                 February 11, 2014
                                  ______________

         Before: CHAGARES, SHWARTZ, and ALDISERT, Circuit Judges.

                               (Filed: February 19, 2014)
                                    ______________

                                       OPINION
                                    ______________

SHWARTZ, Circuit Judge.

      Plaintiff Ellsworth D. Patterson, Jr. appeals the District Court’s orders granting

summary judgment to Defendants Glory Foods, Inc. and McCall Farms, Inc. on his claim
under the New Jersey Conscientious Employee Protection Act (“CEPA”) and denying his

motion for reconsideration. We will affirm.

                                              I.

       As we write principally for the benefit of the parties, we recite only the essential

facts1 and procedural history. Glory Foods, a company that sells southern-style vegetable

products to wholesalers and supermarkets, hired Patterson as an Area Sales Manager in

October 2008. Patterson began work for Glory Foods in 2008 and reported to Lisa Cliff,

who in turn reported to the President of Glory Foods, Jacqueline Neal.

       Before Patterson joined Glory Foods, Wakefern, a supermarket company that

purchased products from Glory Foods, incurred a debt to Glory Foods of approximately

$200,000.2 When the debt was discovered, Glory Foods agreed to an accrual program

with Wakefern, whereby Wakefern would advertise Glory Foods products and attempt to

increase its sales of Glory Foods products in lieu of paying the money it owed. The

agreement was never memorialized in writing. The accrual program ended in 2008, and

Patterson had no role in it. Patterson first learned about Wakefern’s failure to pay and the

accrual program in mid-2009 during a conversation with his predecessor, although

Patterson then understood the debt to be only $100,000. In January 2010, Patterson

attended a meeting with Dan Charna, an owner of Glory Foods, and executives from

       1
          In accordance with our standard of review, see infra Section II, we set forth the
facts in the light most favorable to Patterson. Skerski v. Time Warner Cable Co., 257
F.3d 273, 278 (3d Cir. 2001).
        2
          The parties dispute the amount of the debt. According to Patterson’s supervisor,
the debt was approximately $86,000. The issue is not material to the disposition of this
case.
                                              2
McCall Farms, which was then merging with Glory Foods. During the meeting, Charna

said that Wakefern “stole” $200,000 when it failed to pay the correct price for the

products. JA 62. Patterson later asked Cliff about the accrual program, and she told him

the program had ended before his employment began. Patterson later determined that

sales to Wakefern had declined significantly after the accrual program ended, so he

attempted to re-start the program.

       On February 24, 2010, Neal emailed the sales team, including Patterson, asking

that each person review his or her clients and let her know of “comments, questions or

insight” for an upcoming sales meeting. JA 32. Patterson sent a lengthy response that

noted, among other things, the decline in sales to Wakefern that he attributed to the end

of the accrual program. Cliff, who was copied on the email, responded to Patterson,

instructing him not to email Neal directly.3 For her part, Neal responded directly to

Patterson and asked for more information. In response, Patterson wrote in an email on

March 1, 2010, that “[t]here was an accrual program in place at Wakefern prior to my

arrival to the company. This program was set up to recoup the $100-200,000 over

payment[4] to Wakefern.” JA 26. Patterson did not indicate in the email that he suspected

that the accrual program was unethical or illegal.

       3
          The record includes an email that Cliff sent to Patterson in 2009, instructing him
not to send emails directly to Neal without speaking to Cliff first.
        4
          Cliff testified at her deposition that Wakefern incurred the debt by taking
unauthorized deductions on some of its purchases, resulting in an underpayment, and that
Patterson’s description of the discrepancy as an “overpayment” was incorrect. At his
deposition, Patterson also testified that the debt arose because Wakefern took
unauthorized discounts on its purchases, but he, nonetheless, described this problem as an
“overpayment” by Glory Foods to Wakefern.
                                             3
          Eleven days later, Neal and Cliff terminated Patterson’s employment. Neal and

Cliff told him that their decision was based on the merger between Glory Foods and

McCall Farms, which occurred in January 2010, and conflicts between Patterson and

Cliff.5

          Patterson and his wife filed this lawsuit on December 30, 2010, alleging: (1)

wrongful termination; (2) violation of CEPA; and (3) loss of consortium. With the

parties’ consent, the District Court dismissed Counts 1 and 3. Discovery followed on

Patterson’s CEPA claim. The District Court granted summary judgment in favor of the

Defendants on that claim, and denied Patterson’s motion for reconsideration pursuant to

Fed. R. Civ. P. 59. Patterson now appeals.

                                               II.

          The District Court had jurisdiction in this case pursuant to 28 U.S.C. § 1332(a).

We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. We exercise plenary

review on an appeal from summary judgment, applying the same standard as the District

Court. Tri-M Grp., LLC v. Sharp, 638 F.3d 406, 415 (3d Cir. 2011). When considering a

motion for summary judgment, we “must draw all reasonable inferences from the

underlying facts in the light most favorable to the non-moving party.” Skerski, 257 F.3d

at 278 (citation omitted). We will affirm an order for summary judgment only if “there is

no genuine issue as to any material fact and [] the moving party is entitled to judgment as

          5
        Before Patterson sent his March 1, 2010 email responding to Neal, Cliff emailed
him and another sales employee concerning a task that needed to be completed within
two hours of the email, which Patterson did not complete. Patterson later alleged that he
was set up to fail at this task to justify his termination.
                                                4
a matter of law.” Ruehl v. Viacom, Inc., 500 F.3d 375, 380 n.6 (3d Cir. 2007) (internal

quotation marks and citation omitted). A disputed issue is “genuine” only if there is a

sufficient evidentiary basis on which a reasonable jury could find for the non-moving

party. Kaucher v. Cnty. of Bucks, 455 F.3d 418, 423 (3d Cir. 2006) (citing Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

                                              III.

       CEPA was enacted “to protect and encourage employees to report illegal or

unethical workplace activities and to discourage public and private sector employers from

engaging in such [activities].” Abbamont v. Piscataway Twp. Bd. of Educ., 650 A.2d
958, 971 (N.J. 1994). It provides, in relevant part:

       [a]n employer shall not take any retaliatory action against an employee
       because the employee does any of the following:

                a. Discloses, or threatens to disclose to a supervisor or to a
                public body an activity, policy or practice of the employer . . .
                that the employee reasonably believes: (1) is in violation of a
                law, or a rule or regulation promulgated pursuant to law . . . ;
                or (2) is fraudulent or criminal . . . .

N.J. Stat. Ann. § 34:19–3.6 To succeed on a CEPA claim, a plaintiff must show (1) he or

she reasonably believed that his or her employer’s conduct was violating a law, rule, or

       6
           The statute also protects an employee who:

       [o]bjects to, or refuses to participate in any activity, policy or practice
       which the employee reasonably believes: (1) is in violation of a law, or a
       rule or regulation promulgated pursuant to law . . . ; (2) is fraudulent or
       criminal . . . ; or (3) is incompatible with a clear mandate of public policy
       concerning the public health, safety or welfare or protection of the
       environment.

                                               5
regulation promulgated pursuant to law, or a clear mandate of public policy; (2) he or she

performed a whistleblowing activity described in CEPA; (3) an adverse employment

action was taken against him or her; and (4) a causal connection exists between the

whistleblowing activity and the adverse employment action. Caver v. City of Trenton,

420 F.3d 243, 254 (3d Cir. 2005).7

                                             A.

       Patterson contends that the fact that he was not informed of the accrual program

with Wakefern and that the entire debt may not have been recouped are evidence of either

a kickback scheme, or that the shareholders were not fully informed of the failure to

collect this debt. Patterson’s mere assertions that he believed that wrongdoing occurred,

however, cannot defeat summary judgment, without some evidence to support them. See,

e.g., Quiroga v. Hasbro, Inc., 934 F.2d 497, 500 (3d Cir. 1991) (holding that the party

opposing summary judgment “must set forth specific facts showing a genuine issue for

trial and may not rest upon mere allegations, general denials, or . . . vague statements”).

N.J. Stat. Ann. § 34:19–3(c). Patterson asserts a claim under this section of the statute as
well, but he fails to identify any ongoing activity to which he objected or in which he
refused to participate.
        7
          If a plaintiff demonstrates a prima facie case, we apply the burden-shifting
analysis from federal discrimination cases, which requires that the employer articulate a
legitimate, non-discriminatory reason for its actions, after which the burden shifts back to
the plaintiff to show that the legitimate reason is pretextual. Blackburn v. United Parcel
Serv., Inc., 179 F.3d 81, 92 (3d Cir. 1999). In this case, the District Court also held that
even if Patterson had presented a prima facie case, he had failed to show that Defendants’
legitimate, non-retaliatory reasons for firing him—including his missed deadlines, his
failure to respect the chain of command, and the merger—were pretextual. JA 185 n.12.
Because we agree with the District Court that Patterson has failed to set forth a prima
facie case, we need not engage in this analysis.
                                              6
       First, while Patterson argues that a fraud or kickback scheme occurred, he cites no

evidence to support that theory. At his deposition, he admitted that he had no “specific[]”

evidence of a kickback scheme, and based his conclusion on the fact that there was no

indication any Glory Foods employee attempted to recover the money Wakefern owed.

JA 55-56. He stated that “[f]rom [his] experience as a sales professional any time

someone don’t try to recover money there’s a possibility there is a kickback or some deal

going on . . . .” JA 110. In other words, from Patterson’s perspective, illegal activity is

likely afoot any time a debt is forgiven. Forgiveness of a debt violates no law or public

policy. See Young v. Schering Corp., 645 A.2d 1238, 1246 (N.J. Super. Ct. App. Div.

1994) (affirming dismissal of a complaint where the challenged conduct “was not

unlawful or wrongful in any way,” and “did not contravene any clear mandate of public

policy”). Moreover, Patterson does not explain the logic by which he inferred that such a

basic business activity—Wakefern incurring and repaying a debt, and Glory Foods

forgiving some of that debt—was part of some illegal scheme. Patterson’s assertions of

wrongdoing, unsupported by any evidence, are far too speculative to defeat summary

judgment.

       Second, Patterson argues that the District Court overlooked facts that

demonstrated that he had a reasonable basis to believe that, by forgiving some amount of

the Wakefern debt, “fraud had been committed on the shareholders of Glory Foods” and

its owners because they may not have been aware of the debt forgiveness. Appellant Br.

13-14. That argument fails for two reasons. First, he provides no evidence that the

shareholders were misled or not informed about the Wakefern debt. Second, Patterson’s

                                              7
assertion that the ownership of Glory Foods was misled is contradicted by his own

deposition testimony. Patterson stated during his deposition that he learned of the

Wakefern debt in part when he attended a meeting at which one of the owners of Glory

Foods discussed the issue. In other words, Patterson has stated that he heard details about

the issue from the very people from whom he contends it was kept, thus undermining his

claim of concealment.

       Because Patterson has not set forth any evidence from which a reasonable person

could conclude that Glory Foods employees engaged in wrongdoing, and hence cannot

show “a substantial nexus between the complained-of conduct and a law or public policy

identified by the court or the plaintiff,” Dzwonar v. McDevitt, 828 A.2d 893, 901 (N.J.

2003), the District Court correctly concluded that he cannot meet the first element of a

CEPA claim.

                                             B.

       The District Court granted summary judgment for the additional reason that

Patterson did not engage in protected whistleblowing activity. He contends that his

March 1, 2010 email to Neal is protected activity. He is incorrect. His email, which he

sent to Neal in response to her inquiry concerning a decline in sales, merely stated his

rather banal observation that an accrual program involving free advertising had been in

place, that the program had ended, and that sales had dropped as a result. Patterson’s

email to Neal did not mention any concern that a kickback scheme was in place, or that

the underpayment had not been disclosed to shareholders. Indeed, Patterson did not even

indicate to Neal his purported concern that Wakefern still owed Glory Foods money

                                             8
because the accrual program had not recouped the entire debt. Nothing in the email

suggested that a debt was still due, that wrongdoing had occurred, or that he even

believed wrongdoing had occurred. Cf. Carlino v. Gloucester City High Sch., 57 F.

Supp. 2d 1, 35-36 (D.N.J. 1999) (granting summary judgment based in part on the fact

that the alleged whistleblowing message “in no way suggest[ed] any illegal conduct”);

Young, 645 A.2d at 1248 (affirming dismissal of a complaint where the employee

complained about a decision that “was not unlawful or wrongful in any way,” because

CEPA “was not intended to provide a remedy for wrongful discharge for employees who

simply disagree with an employer’s decision, where that decision is entirely lawful”).

      Accordingly, Patterson has not shown that he engaged in protected activity, and

for this additional reason, the District Court properly granted summary judgment.8

                                           IV.

      For the foregoing reasons, we will affirm the District Court’s orders.9

      8
         The causation element of a CEPA claim requires a plaintiff to show that “a
causal connection exists between the whistle-blowing activity and the adverse
employment action.” Dzwonar, 828 A.2d at 900. Because Patterson cannot identify any
whistleblowing activity, we need not address this element.
       9
         Patterson also appeals the District Court’s order denying his motion for
reconsideration. See Notice of Appeal, Feb. 28, 2013, ECF No. 58. We will affirm the
District Court’s order denying Patterson’s motion for reconsideration because, as the
District Court concluded, his reconsideration motion merely “rehash[ed] his rejected
argument” from his brief in opposition to summary judgment, Letter Order 2, Feb. 1,
2013, ECF No. 57, and we have concluded that the District Court properly granted
summary judgment.
                                            9