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U.S. Equal Employment Opportunity Commission v. Akebono Brake Corp.

United States District Court, D. South Carolina, Columbia Division

March 29, 2018

U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,
v.
AKEBONO BRAKE CORPORATION, Defendant.
v.
CAROLINA PERSONNEL SERVICES, INC. and CAROLINA INDUSTRIAL STAFFING, INC., Successor in Interest for Carolina Personnel Services, Inc., Third-Party Defendants.

          OPINION AND ORDER GRANTING MOTIONS FOR JUDGMENT ON THE PLEADINGS

          CAMERON MCGOWAN CURRIE, SENIOR UNITED STATES DISTRICT JUDGE.

         Through this action, the U.S. Equal Employment Opportunity Commission (“EEOC”) seeks relief from Akebono Brake Corporation (“Akebono”) for alleged unlawful employment practices on the basis of religion. ECF No. 19 (Amended Complaint). The EEOC alleges Akebono, acting through its temporary labor services provider (“TLSP”), discriminated against Clintoria Burnett (“Burnett”) by refusing to hire her and by failing to reasonably accommodate Burnett's sincerely held religious belief that she is required to wear skirts or dresses rather than pants. ECF No. 19 at 1 (“Nature of Action”).[1] Akebono denies it engaged in any unlawful employment practice. ECF Nos. 21, 72 (Answer and Amended Answer).

         In addition to answering, Akebono filed a Third-Party Complaint against its TLSP, Carolina Personnel Services, Inc. (“CPS”), and against CPS's alleged successor in interest, Carolina Industrial Staffing, Inc. (“CIS”). ECF No. 14. Akebono alleges these entities are entirely (or at least primarily) responsible for any unlawful actions that may have occurred. Id. Akebono seeks indemnification or contribution for any judgment that may be awarded against it as well as for its costs and fees in defense of this action and, arguably, other damages for CPS's alleged breach of the Staffing Agreement through which it provided TLSP services to Akebono.

         CPS and CIS moved for judgment on the pleadings. ECF Nos. 45, 47. The matter is before the court for review of a Report and Recommendation (“Report”) that recommends these motions be granted. For reasons set forth below, the court adopts the Report and grants the motions for judgment on the pleadings.

         BACKGROUND

         In accordance with 28 U.S.C. § 636(b) and Local Civil Rule 73.02 (B)(2), D.S.C., this matter was referred to United States Magistrate Judge Shiva V. Hodges for pre-trial proceedings. On February 8, 2018, the Magistrate Judge issued a Report recommending the motions for judgment on the pleadings be granted. ECF No. 69. This recommendation relies on the doctrine of “obstacle preemption.” Id. at 5-7. As the Report explains, obstacle preemption precludes a defendant from pursuing third-party claims for contribution or indemnification for damages that may be awarded under certain statutes including Title VII of the Civil Rights Act of 1964. Id. The Report assumes without deciding that Akebono might have some independent claim for relief against CPS or CIS (e.g., a claim for breach of contract), but concludes such a claim cannot proceed in this action because there is no proper third-party claim under Rule 14 of the Federal Rules of Civil Procedure to which it might be joined. Id. at 7, 8.

         The Magistrate Judge advised the parties of the procedures and requirements for filing objections to the Report and the serious consequences if they failed to do so. Akebono filed objections on February 22, 2018. ECF No. 74. CPS filed a reply in opposition to Akebono's objections on March 8, 2018, which CIS later joined. ECF Nos. 78, 81.[2] The matter is now ripe for resolution.

         STANDARD

         The Magistrate Judge makes only a recommendation to this court. The recommendation has no presumptive weight, and the responsibility for making a final determination remains with the court. Mathews v. Weber, 423 U.S. 261 (1976). The court is charged with making a de novo determination of any portion of the Report to which a specific objection is made. The court may accept, reject, or modify, in whole or in part, the recommendation of the Magistrate Judge, or recommit the matter to the Magistrate Judge with instructions. 28 U.S.C. § 636(b)(1). In the absence of a specific objection, the court reviews only for clear error. See Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (“in the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'”) (quoting Fed.R.Civ.P. 72 advisory committee's note)).

         DISCUSSION

         Obstacle Preemption vs. Factual Defense.

         In its first objection, Akebono argues the Report errs in finding its claims barred by obstacle preemption because it is not attempting to shift its entire liability to CPS. ECF No. 74 at 7 (explaining it “is not attempting to escape responsibility for its own actions; but [is] only pursuing a defense to the extent it is liable to Plaintiff because of acts and/or omissions of CPS”); see also Id. at 9 (“Akebono is seeking a defense and to the extent it may be found liable for Title VII violations committed by CPS employees [an] indemnification for that liability.”). This argument misconstrues the recommendation and ignores the EEOC's concession that it is not seeking and cannot obtain recovery from Akebono for actions of CPS. See ECF No. 57.

         As explained in the Report, obstacle preemption precludes claims for indemnification or contribution. ECF No. 69 at 5-7. Thus, it is irrelevant whether Akebono is trying to shift all or part of any liability that may be assessed against it for Title VII violations.

         More critically, as the EEOC has conceded and the Report recognizes, Akebono may be held liable only if and to the extent it participated in discriminatory conduct. Thus, there is no risk Akebono will be held liable for wrongful acts in which it did not participate.[3] To the extent the EEOC fails to establish Akebono is, itself, responsible for unlawful discrimination, it cannot obtain judgment against Akebono. ...


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