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Diane Ballard v. Hsbc Bank Usa

October 26, 2011


The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court



Plaintiff Diane Ballard brings this action pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., as amended by the Civil Rights Act of 1991 ("Title VII"), for a declaration that she is a prevailing party and to recover attorney's fees. Presently before this Court is Defendant HSBC Bank USA's ("HSBC") Motion to Dismiss. (Docket No. 20.) For the following reasons, that motion is denied.


A. Facts

On April 25, 1989 and December 14, 1990, Diane Ballard, a former HSBC employee who is black, filed charges against her former employer alleging racial discrimination. (State Division of Human Rights Decision, p. 1; Docket No. 19-2, Exhibit 2.) Under the statutory scheme of Title VII and pursuant to 42 U.S.C. § 2000e-5(c), Ballard was required to file these charges with the New York State Division of Human Rights ("Division") before she could bring a complaint in federal court.*fn1 Pursuant to the same statute, Ballard's claims were also cross-filed with the Equal Employment Opportunity Commission ("EEOC").*fn2 The two Division charges were substantially similar, with the first alleging discrimination based on race and the second alleging continued discrimination and retaliation due to her initial complaint. (Id.) On May 25, 2004, the Acting Commissioner of the Division, Edward Friedland, issued a Decision and Opinion finding that Defendant HSBC engaged in unlawful discriminatory employment practices against Ballard. (Id.)*fn3 Acting Commissioner Friedland found that HSBC subjected Ballard to a hostile work environment and "that [HSBC] . . . discriminate[d] against [Ballard] by failing to promote her because of her race and in retaliation for her original Division complaint." (Id., p. 12.) As a result, Division ordered HSBC to pay Ballard $35,000 in compensatory damages and $1,630.69 in back pay. (Id., p. 23.) This order was upheld by the New York State Supreme Court, Appellate Division, Fourth Department. See Matter of Ballard v. HSBC Bank USA, 42 A.D.3d. 938, 839 N.Y.S. 2d 874 (4th Dep't 2007.)

On November 20, 2007, having taken no action itself and having received a request from Ballard, the EEOC issued her a right-to-sue letter.*fn4 (Docket No. 19-2, Exhibit 3.) Upon receipt of this letter, under § 706(f)(1), Ballard then had 90 days to file a Title VII action in federal district court.

B. Procedural History

Ballard, within the ninety-day period, filed a complaint in this Court on February 19, 2008 (Docket No. 1) seeking a declaratory judgment that HSBC violated her rights under Title VII and attorney's fees as a "prevailing party" under the same statute. HSBC moved to dismiss the complaint (Docket No. 2); Ballard opposed the motion and sought leave to amend its complaint. (Docket No. 8.) In an Order dated September 30, 2009, this Court found that Ballard could amend her complaint as a matter of course under Fed. R. Civ. P 15 and consequently denied HSBC's motion to dismiss without prejudice. (Docket No. 18.) Thereafter, Ballard amended her complaint (Docket No. 19) and HSBC renewed its motion to dismiss. (Docket No. 20.)


A. Legal Standard

Rule 12 (b)(6) allows dismissal of a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12 (b)(6). Federal pleading standards are generally not stringent: Rule 8 requires only a short and plain statement of a claim. Fed. R. Civ. P. 8 (a)(2). But the plain statement must "possess enough heft to show that the pleader is entitled to relief." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1966, 167 L.Ed.2d 929 (2007).

When determining whether a complaint states a claim, the court must construe it

liberally, accept all factual allegations as true, and draw all reasonable inferences in the plaintiff's favor. ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007). Legal conclusions, however, are not afforded the same presumption of truthfulness. See Ashcroft v. Iqbal, 556 U.S. __, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) ("The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.").

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S.Ct. at 1945 (quoting Twombly, 550 U.S. at 570). Labels, conclusions, or a "formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. Facial plausibility exists when the facts alleged allow for a reasonable inference that the defendant is liable for the misconduct charged. Iqbal, 129 S.Ct. at 1949. The plausibility standard is not, however, a probability requirement: the pleading must show, not merely allege, that the pleader is entitled to relief. Id. at 1950; Fed. R. Civ. P. 8 (a)(2). Well-pleaded allegations must nudge the claim "across the line from conceivable to plausible." Twombly, 550 U.S. at 570.

Courts therefore use a two-pronged approach to examine the sufficiency of a complaint, which includes "any documents that are either incorporated into the complaint by reference or attached to the complaint as exhibits." Blue Tree Hotels Inv. (Can.), Ltd. v. Starwood Hotels & Resorts Worldwide, Inc., 369 F.3d 212, 217 (2d Cir. 2004). This examination is context specific and requires that the court draw on its judicial experience and common sense. Iqbal, 129 S.Ct. at 1950. First, statements that are not entitled to the presumption of truth - such as conclusory allegations, labels, and legal conclusions - are identified and stripped away. See Iqbal, 129 S.Ct. at 1950. Second, well-pleaded, nonconclusory factual allegations are presumed true and examined to determine whether they "plausibly give rise to an entitlement to relief." Id.

B. HSBC's Motion to Dismiss

Although Ballard has not framed her complaint as such, it is essentially a claim solely for attorney's fees. Her Title VII rights have already been vindicated by Division under the scheme set up by that statute. Ballard asserts two different claims here: one for attorney's fees and the other for punitive damages. But the Civil Rights Act of 1991, which permits punitive damages in this context, is not retroactive. Landgraf v. USI Film Prods., 511 U.S. 244, 247, 114 S. Ct. 1483, 128 L. Ed. 2d 229 (1994). Accordingly, because punitive damages were not available under Title VII at the time she filed her complaints with Division in 1989 and 1990, such damages remain unavailable to her now. See id. All that remains then is her claim for attorney's fees, which has always been permitted under Title VII, but which is not allowed at the Division level.

HSBC moves to dismiss this claim on three grounds: (1) it is barred by res judicata; (2) this Court lacks subject matter jurisdiction; and (3) Ballard is not a prevailing party under ...

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