United States District Court, Northern District of New York
November 19, 1999
SUZANNE B. REIL, PLAINTIFF,
CLINTON COUNTY, NEW YORK; CLINTON COUNTY AREA DEVELOPMENT CORP.; CLINTON COUNTY INDUSTRIAL DEVELOPMENT AGENCY; CLINTON COUNTY AREA DEVELOPMENT CORP. DEFINED BENEFIT PLAN; GERARD E. KELLY; GLEN ASHLEY, DEFENDANTS. CLINTON COUNTY, NEW YORK, CROSS-CLAIMANT, CLINTON COUNTY AREA DEVELOPMENT CORP.; CLINTON COUNTY INDUSTRIAL DEVELOPMENT AGENCY; CLINTON COUNTY AREA DEVELOPMENT CORP. DEFINED BENEFIT PLAN; GERARD E. KELLY; GLEN ASHLEY, CROSS-DEFENDANT.
The opinion of the court was delivered by: Kahn, District Judge.
MEMORANDUM — DECISION AND ORDER
Presently before the Court are (i) defendants Ashley, Clinton
County Area Development Corp., Clinton County Industrial
Development Agency, and Clinton County Area Development Corp.
Defined Benefit Plan's motion for summary judgment and award of
attorneys' fees, (ii) defendant Clinton County's motion for
summary judgment and award of attorneys' fees, and (iii)
defendant Kelly's motion for summary judgment and award of
attorneys' fees. For the reasons set forth below, the motions for
summary judgment are granted, the case dismissed, and the motions
for award of attorneys' fees denied.
Defendant Clinton County Area Development Corp. ("ADC"), a
non-profit corporation, employed Plaintiff from May 1973 through
June 14, 1994, first as an administrative aide and later as an
assistant to the president. Pursuant to an employment contract
between defendant ADC and defendant Clinton County Industrial
Development Agency ("IDA"), ADC employees perform IDA functions
because of an overlap in those organizations' goals.
Plaintiff maintains that from 1990 until the termination of her
employment, she was sexually harassed by defendant Kelly and that
his conduct was known to the ADC chairman, defendant Ashley.
Plaintiff maintains that in October 1994, she complained of the
harassment to the ADC board of directors, who took no action.
Plaintiff submitted her resignation on June 14, 1995, then
commenced the present action. In addition to claims related to
her sexual harassment claims, Plaintiff alleges that Defendants
improperly administered and supervised the ADC Defined Benefit
Plan ("Benefit Plan"), resulting in the underfunding and
diminishment of her investments.
Plaintiff has subsequently withdrawn the Title VII claim
against defendants Ashley and Kelly, and the intentional
infliction of emotional distress and ERISA claims against all
All defendants now seek summary judgment and an award of
attorneys' fees. The standard for summary judgment is
well-established. Summary judgment is appropriate if "the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law."
Fed.R.Civ.P. 56(c). A material fact is genuinely disputed only
if, based on that fact, a reasonable jury could find in favor of
the non-moving party. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). On a motion for
summary judgment, all evidence must be viewed and all inferences
must be drawn in the light most favorable to the nonmoving party.
City of Yonkers v. Otis Elevator Co., 844 F.2d 42, 45 (2d Cir.
The party seeking summary judgment bears the initial burden of
"informing the district court of the basis for its motion" and
identifying the matter "it believes
demonstrate[s] the absence of a genuine issue of material fact."
Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91
L.Ed.2d 265 (1986). Upon the movant's satisfying that burden, the
onus then shifts to the non-moving party to "set forth specific
facts showing that there is a genuine issue for trial."
Anderson, 477 U.S. at 250, 106 S.Ct. 2505. The non-moving party
"must do more than simply show that there is some metaphysical
doubt as to the material facts," Matsushita Elec. Indus. Co.
Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348,
89 L.Ed.2d 538 (1986), "but must set forth specific facts showing
that there is a genuine issue of fact for trial." First Nat'l
Bank of Az. v. Cities Serv. Co., 391 U.S. 253, 288, 88 S.Ct.
1575, 20 L.Ed.2d 569 (1968). Summary judgment is usually
unwarranted when the defendant's state of mind is at issue.
Clements v. Nassau County, 835 F.2d 1000, 1005 (2d Cir. 1987).
In order to raise a fact issue regarding state of mind, however,
there must be solid circumstantial evidence to prove plaintiff's
case. Id. "Mere conclusory allegations, speculation or
conjecture will not avail a party resisting summary judgment."
Cifarelli v. Village of Babylon, 93 F.3d 47, 51 (2d Cir. 1996).
A. Motion by Defendants Ashley, ADC, IDA, Benefit Plan, and
Plaintiff commenced this action under Title VII of the 1964
Civil Rights Act, 42 U.S.C. § 2000e, et seq. Title VII
prohibits employers from engaging in discriminatory employment
practices, but narrows the scope of its mandate by defining the
term "employer" as "a person engaged in an industry affecting
commerce who has fifteen or more employees for each working day
in each of twenty or more calendar weeks in the current or
preceding calendar year, and any agent of such a person."
42 U.S.C. § 2000e(b). While conceding that neither ADC nor IDA ever
employed more than fifteen individuals, Plaintiff contends that
the boards of directors of both entities should be considered
employees, thereby satisfying the statutory requirement, and that
both entities were effectively arms of Clinton County and the
rationale underlying the statute does not apply to them.
Courts have traditionally regarded board members and officers
as employers, and treated them as employees only in very narrow
circumstances where they have assumed duties associated with
employees. See, e.g., EEOC v. Johnson & Higgins, Inc.,
91 F.3d 1529, 1539-40 (2d Cir. 1996) (holding that directors of an
insurance brokerage firm were employees for purposes of the ADEA
because each performed traditional employee duties, worked
full-time for the firm, and reported to senior members of the
firm). The Seventh Circuit has noted that, "[a]lthough a director
may accept duties that make him also an employee, a director is
not an employee because he draws a salary. Rather, the primary
consideration is whether an employer-employee relationship
exists." Chavero v. Local 241, 787 F.2d 1154, 1157 (7th Cir.
1986) (citations omitted). In EEOC v. First Catholic Slovak
Ladies Ass'n, 694 F.2d 1068 (6th Cir. 1982), cert. denied,
464 U.S. 819, 104 S.Ct. 80, 78 L.Ed.2d 90 (1983), which Plaintiff
relies upon, the Sixth Circuit held that persons who were
directors and officers could be considered employees under the
ADEA because the individuals "performed traditional employee
duties" such as "maintaining records, preparing financial
statements, [and] managing the office." Id. at 1070.
Here, there is no evidence that ADC board members ever engaged
in activity approaching ordinary employee functions. Board
members confined their role to attendance at board meetings and
general policy setting, and never ventured further afield into
managing the office, maintaining records, or preparing financial
statements. Plaintiff also speculates that ADC's by-laws invest
board members with responsibility for daily administration. That
is incorrect: ADC's by-laws vest that
responsibility in the president, who also makes all
personnel-related decisions. In short, the facts in this case
implicate none of the factors that confer employee status on
Plaintiff's argument with respect to defendants IDA and Clinton
County similarly founder. In Walters v. Metropolitan Educ.
Enters., Inc., 519 U.S. 202, 117 S.Ct. 660, 136 L.Ed.2d 644
(1997), the Supreme Court adopted the "payroll method" of
determining Title VII's statutory prerequisite that the employer
have fifteen or more employees on a given work day. In other
contexts, the Supreme Court has concluded that where Congress
used the terms employer and employee, it "`intended to describe
the conventional master-servant relationship as understood by
common-law agency doctrine.'" Nationwide Mut. Ins. Co. v.
Darden, 503 U.S. 318, 322-23, 112 S.Ct. 1344, 117 L.Ed.2d 581
(1992) (ERISA). As a matter of law, based upon traditional indicia
of employment, neither IDA nor Clinton County employed Plaintiff.
It has long been established that a "Title VII plaintiff is only
an `employee' if the defendant both pays him and controls his
work." See, e.g., Tadros v. Coleman, 717 F. Supp. 996, 1004
(S.D.N.Y. 1989), aff'd, 898 F.2d 10 (2d Cir. 1990), cert.
denied, 498 U.S. 869, 111 S.Ct. 186, 112 L.Ed.2d 149 (1990). It
is undisputed that ADC paid her salary, provided her with
employment benefits, trained her, evaluated her work, and
provided the work space she occupied. At no time was she
accountable to Clinton County employees or IDA members. While
ADC's board included some county officials, those officials did
not dominate ADC or exercise control; indeed, their power was
diluted by the virtue of being members of the board.
Finally, the Court declines Plaintiff's invitation to evade the
statutory requirement of 42 U.S.C. § 2000e(b) on equitable
grounds. Congress enacted § 2000e(b), and Congress can revise it.
If this Court did waive the statutory requirement, it would
render virtually meaningless every jurisdictional parameter
imposed upon federal courts. The statute is constitutional; the
interpretation has been set forth above; the Court's role with
respect to the statute is complete.
B. Section 1983
To state a claim under 42 U.S.C. § 1983, the behavior
complained of must be considered an action of the government and
not a private actor. As explained above, neither IDA nor Clinton
County were Plaintiff's employers and therefore cannot be liable
for the § 1983 claim. To establish that ADC is a state actor,
Plaintiff must demonstrate a significant nexus between the state
and ADC such that their interests and actions were merged: "a
private individual may be considered a state actor for purposes
of a constitutional challenge if his/her conduct is `fairly
attributable to the state.'" Lugar v. Edmondson Oil Co.,
457 U.S. 922, 937, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982). The Supreme
Court has developed four principles to analyze claims of state
action. Specifically, the principles are (1) whether there exists
a "symbiotic relationship" between the entity and the state; (2)
whether there is "extensive regulation" of the entity by the
state; (3) whether the entity "depended on the State for funds";
and (4) whether the entity "performs a public function."
Rendell-Baker v. Kohn, 457 U.S. 830, 840-42, 102 S.Ct. 2764, 73
L.Ed.2d 418 (1982) The record is barren of any such proof.
ADC is an independent, not-for-profit corporation governed by a
volunteer board of directors comprised of private individuals.
ADC's board exercises independent judgment in allocating
organization resources, further negating a finding that ADC is a
state actor. Although ADC receives county funds, so do a plethora
of volunteer organizations. Mere receipt of government funds does
not transform a private actor into a state actor. Plaintiff
herself belies that contention with her own statement that "the
largest portion of ADC income came from rental monies from
tenants occupying nine industrial buildings
owned by IDA on lands deeded to IDA by the County of Clinton."
See Affidavit of Suzanne B. Reil filed March 4, 1998, ¶ 11.
There is no evidence that ADC is subject to unusually close
government regulation or supervision. ADC operates industrial
parks in which it rents space to private corporations; ADC is
essentially a rental agent. Contrary to Plaintiff's assertions,
ADC performs no government functions and is not a state actor.
C. Supplemental Jurisdiction
No federal claims survive in this action. The Title VII and §
1983 claims against Defendants fail for the reasons set forth
above, and Plaintiff has entirely withdrawn the ERISA claim.
Under 28 U.S.C. § 1367(c)(3), this Court may decline to exercise
jurisdiction over pendent state claims where it has dismissed all
claims over which it has original jurisdiction.
D. Attorneys' Fees
Defendants' requests for attorneys' fees are unfounded. There
is no reason to believe that Plaintiff brought these claims in
Accordingly, it is hereby
ORDERED that defendants Ashley, Clinton County Area Development
Corp., Clinton County Industrial Development Agency, and Clinton
County Area Development Corp. Defined Benefit Plan's motion for
summary judgment is GRANTED;
ORDERED that defendant Clinton County's motion for summary
judgment is GRANTED;
ORDERED that defendant Kelly's motion for summary judgment is
ORDERED that Defendants' requests for attorneys' fees are
ORDERED that the case is DISMISSED in its entirety for lack of
subject matter jurisdiction; and it is
FURTHER ORDERED that the Clerk of the Court serve a copy of
this order on all parties by Regular mail.
IT IS SO ORDERED.
© 1992-2003 VersusLaw Inc.