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WESTPHAL v. CATCH BALL PRODS. CORP.

February 18, 1997

KEIKO WESTPHAL, Plaintiff, against CATCH BALL PRODUCTS CORP., et ano., Defendants.


The opinion of the court was delivered by: KAPLAN

 LEWIS A. KAPLAN, District Judge.

 The jury in this case found that defendant Catch Ball Products Corporation ("Catch Ball") discriminated against plaintiff Keiko Westphal on the basis of age and retaliated against her for filing a complaint with the Equal Employment Opportunity Commission. It awarded $ 45,000 in back pay, $ 5,000 in compensatory damages, and $ 25,000 in punitive damages. The Court thereafter awarded front pay in the amount of $ 92,859. *fn1" (Findings of Fact and Conclusions of Law, Dec. 6, 1996) Defendant now moves for judgment as a matter of law on the ground that the Court lacks subject matter jurisdiction and that there was insufficient evidence to permit the jury to find either age discrimination or retaliation.

 I

 The first of defendant's jurisdictional challenges is the contention that there was no federal jurisdiction and that the exercise of supplemental jurisdiction therefore was inappropriate.

 The complaint alleged age and gender discrimination claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act ("ADEA"), and 42 U.S.C. § 1981 as well as pendent state law claims. No motion to dismiss the complaint was made. The scheduling order, dated January 31, 1996, required that any motions for summary judgment be filed on or before May 30, 1996. No such motion was filed, however, until immediately before the commencement of the trial on October 27, 1996. Defendant then contended, among other things, that its employees were insufficiently numerous to bring it within the coverage of Title VII or ADEA, that the Section 1981 claim was insufficient, and that the Court therefore lacked subject matter jurisdiction. Inasmuch as Rule 56(c) requires that motions for summary judgment be served at least ten days before the hearing, it was obvious that the trial would be concluded before the motion was ripe for decision. *fn2" The Court therefore indicated that the jurisdictional point, which in any case involved factual issues as to the number of defendant's employees and whether defendant and related entities should be considered to be a single employer, might be raised by motion during the trial. (Tr. 2-5)

 Title VII and ADEA define "employer" to mean entities with 15 and 20 or more employees, respectively. 42 U.S.C. § 2000e; 29 U.S.C. § 630(b). The evidence at trial, viewed in the light most favorable to the plaintiff, showed that defendant Catch Ball did not have more than six employees at any relevant time. The defendant, however, conceded that Catch Ball and two other related companies, Orange Point and Gallup, together employed at least 15 people. (Tr. 187) Assuming that Orange Point, Gallup and Catch Ball properly were considered a single employer, the three companies together had 20 employees in 1996 at the time plaintiff was terminated. *fn3"

 Defendants moved for a directed verdict at the end of the plaintiff's case on the grounds, among others, that (1) the Section 1981 claim failed to state a cause of action, (2) there was insufficient evidence to permit the conclusion that the defendant employed the requisite number of persons to come under ADEA or Title VII, and (3) there was no evidence of gender discrimination. (Tr. 181-204) The Court granted the motion as to the Section 1981 and Title VII claims, the latter on the ground that there was no evidence of gender discrimination (id. 195). Although it expressed reservations as to whether the evidence was sufficient to permit amalgamation of Orange Point and Gallup with Catch Ball, it denied that motion without prejudice to renewal. Catch Ball properly preserved the point by Rule 50 motions at the close of the defendant's case and of all the evidence. The jury returned a special verdict finding that Catch Ball should be considered a single employer with both Orange Point and Gallup.

 Defendant now urges the Court to hold that it lacked any basis of federal subject matter jurisdiction. Its first theory is based upon the argument that the affidavits submitted in support of its motion for summary judgment demonstrated that Catch Ball and Orange Point were in no way integrated and that those affidavits were unrebutted. (Def. Mem. 8) The argument, however, overlooks a basic fact: the summary judgment motion never was litigated and in fact was mooted by the trial.

 Defendants' summary judgment motion was filed nearly five months after the deadline fixed by the scheduling order and only at the start of the trial. It was never answered because the scheduling order and Rule 56(c) were not complied with, and the Court made it plain that the point would be taken up during the trial. The evidence upon which Catch Ball now relies never was offered at trial and therefore never was properly before the Court. The jurisdictional issue therefore turns on the trial record.

 Defendant's next argument is that the record was devoid of admissible evidence sufficient to justify a finding that Catch Ball and Orange Point were a single employer. *fn4" While there are some differences in approach to the single employer issue, the test in this circuit is "whether 'all the circumstances of the case' tend to show the absence of an arm's length relationship between two entities." Rivera v. Puerto Rican Home Attendants Services, Inc., 922 F. Supp. 943, 949 (S.D.N.Y. 1996) (quoting Lihli Fashions Corp. v. NLRB, 80 F.3d 743, 747 (2d Cir. 1996)). Pertinent factors are evidence of "(1) interrelated operations, (2) common management, (3) centralized control of labor relations, and (4) common ownership." Id. (citing Brower-Coad v. Fundamental Brokers, Inc., 856 F. Supp. 147, 150 (S.D.N.Y. 1993)); accord, Cook v. Arrowsmith Shelburne, Inc., 69 F.3d 1235, 1240 (2d Cir. 1995).

 Defendant argues strenuously that the most important factor in the single employer determination is centralized control of labor relations and that there was no such evidence here. While this, to be sure, is defendant's strongest point, it does not carry the day. These three companies all were small entities. The evidence permitted the jury to find that all were run from Japan by Mr. Naraoka and that Mr. Naraoka dictated the manner in which plaintiff was treated throughout her employment by Catch Ball. This in turn permitted the inference that Mr. Naraoka controlled the labor and employment policies of all three companies and, in consequence, that the factor relied upon by the defendant was satisfied. Even if it was not, the other evidence of common ownership and control and of interrelationship of operations was sufficient to permit the ultimate conclusion that the entities were a single employer. Accordingly, this Court quite plainly had jurisdiction over the Title VII claim until it was dismissed at the end of the plaintiff's case. It retained jurisdiction over the ADEA claim throughout, as the single employer issue ultimately was determined by the jury and the number of employees was not determinable until the close of the evidence. The portion of the judgment pertaining to 1996 events therefore rests both on the ADEA and the state law claims. The balance rests on the state claims.

 This Court's exercise of jurisdiction to decide the state claims clearly was proper. Section 1367(a) of the Judicial Code, as amended, 28 U.S.C. § 1367(a), provides, with exceptions not here relevant, that "the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution." Plaintiff's state law and federal claims of employment discrimination involved exactly the same alleged ...


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