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Equal Employment Opportunity Commission v. Roark-Whitten Hospitality 2, LP

United States District Court, D. New Mexico

August 20, 2019

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,
v.
ROARK WHITTEN HOSPITALITY 2, LP d/b/a WHITTEN INN, JAI HANUMAN, LLC, d/b/a WHITTEN INN TAOS AND/OR EL CAMINO LODGE, AND SGI, LLC d/b/a EL CAMINO LODGE, Defendants.

          Paul Frye and W. Gregory Kelly, Frye and Kelly, P.C., Albuquerque, New Mexico for Defendant SGI, LLC.

          Jeff A. Lee, Senior Trial Attorney, Equal Employment Opportunity Commission, Albuquerque Area Office, Albuquerque, New Mexico, for Plaintiff EEOC.

          MEMORANDUM OPINION AND ORDER DISMISSING FOURTH AMENDED COMPLAINT

          PAUL KELLY, JR. UNITED STATES CIRCUIT JUDGE.

         THIS MATTER is before the court on Defendant SGI, LLC's Motion to Dismiss for Lack of Subject Matter Jurisdiction and Failure to State a Claim filed September 10, 2018. ECF No. 203. Upon consideration thereof, the motion to dismiss is well taken and should be granted on the basis of a failure to state a claim, not lack of subject matter jurisdiction.[1]

         Background

         The Equal Employment Opportunity Commission (EEOC) filed this public enforcement action on September 30, 2014 seeking relief for eight named parties. Compl. (ECF No. 1). The Complaint alleged that Defendant Roark-Whitten Hospitality 2 (RW2) engaged in unlawful employment practices by creating a hostile work environment, engaging in discriminatory practices, and retaliating against employees at a hotel owned by RW2 in Taos, New Mexico (Taos Hotel). Id. at ¶¶ 77-97. After learning that RW2 sold the Taos Hotel, the EEOC filed an amended complaint on December 22, 2014, adding as a defendant “the unknown owner and/or XYZ Company(s)/Corporations.” Am. Compl. at 2 (ECF No. 4).

         Thereafter, the EEOC moved to substitute Jai Hanuman LLC “for the previously unknown XYZ Company(s)/Corporations.” Pl's Renewed Mot. to Am. Compl. at 1 (ECF No. 52). The court granted the request, and the EEOC filed its Second Amended Complaint. ECF No. 87. On December 16, 2016, after learning that Defendant Jai sold the Taos Hotel to SGI, LLC (SGI), the EEOC filed its second motion to amend the complaint to add SGI as a defendant. ECF No. 86. Jai and RW2 opposed the addition of SGI, ECF No. 94, and Jai moved to dismiss the Second Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(6). ECF No. 96. The court granted the EEOC's second motion to amend and denied Jai's motion to dismiss. ECF No. 178.

         On September 28, 2017, the EEOC filed its Third Amended Complaint adding SGI as a party under a theory of successor liability. ECF No. 179. SGI moved to dismiss the Third Amended Complaint for failure to state a claim. ECF No. 186. SGI argued that the EEOC failed to plead adequately the essential elements necessary to establish successor liability, including that SGI had notice of the lawsuit at the time it purchased the Taos Hotel. Id. The court ruled that although the Third Amended Complaint adequately pled many of the essential elements of successor liability, it failed to adequately plead that SGI had notice of the lawsuit at the time it purchased the Taos Hotel. Mem. Op. and Order at 8-10 (July 30, 2018) (ECF No. 199). While the court granted SGI's motion to dismiss, it also granted leave to the EEOC to amend its complaint to cure the notice issue. Id. at 9-10.

         On August 13, 2018, the EEOC filed its Fourth Amended Complaint. ECF No. 201. On September 10, 2018, SGI moved to dismiss the Fourth Amended Complaint under Rule 12(b)(1) for lack of subject matter jurisdiction and under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. The court now considers this motion. ECF No. 203.

         Discussion

         A. Subject Matter Jurisdiction

         SGI argues that the EEOC failed to adequately allege notice in connection with successor jurisdiction, Def.'s Mot. to Dismiss at 2 (ECF No. 203). SGI argues that before determining successor liability, a court must determine if it maintains jurisdiction over a Title VII claim. Id. The EEOC does not address SGI's jurisdictional argument in its response, but the court concludes that SGI's argument is foreclosed by Supreme Court precedent. See Fort Bend Cty. v. Davis, 139 S.Ct. 1843, 1850-51 (2019).

         SGI argues that Title VII's charge-filing requirement must be satisfied to confer subject-matter jurisdiction. Def.'s Mot. to Dismiss at 2-4. According to SGI, because successor companies are not named in the original EEOC charge, a court lacks subject-matter jurisdiction over successor companies unless the successor had notice of the Title VII charge and an opportunity to voluntarily comply with the law. Id. The Supreme Court recently held that “Title VII's charge-filing requirement is not of jurisdictional cast.” Fort Bend Cty., 139 S.Ct. at 1850-51. The Court explained that “federal courts exercise jurisdiction over Title VII actions pursuant to 28 U.S.C. § 1331's grant of general federal-question jurisdiction, and Title VII's own jurisdictional provision, 42 U.S.C. § 2000e-5(f)(3).” Id. Accordingly, the court rejects SGI's jurisdictional challenge because it is now clear that Title VII jurisdiction does not hinge on notice.

         B. ...


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