Friday, March 4, 2011

Staub v. Proctor Hospital

With Justice Scalia writing for a six justice majority, the Supreme Court on Tuesday, March 1, 2011, issued its much-heralded “cat’s paw” decision. The opinion has been summarized on many other sites – see, for example, the article on Philip Miles’ Lawffice Space (here), Jon Secrest’s post on Roetzel & Andress’ Labor & Employment Blog (here), Ed Hopson’s Posting on the Wyatt Employment Law Report (here), and Richard Renner’s post on the Whistleblowers Protection Blog (here) – just to name a few. Thus, my purpose is not to summarize the holding, but rather to share some initial observations about the opinion.

1.    Despite the fact that many plaintiff employment lawyers are ballyhooing this decision as a huge victory for plaintiffs in employment discrimination cases, I have a very contrarian view. This opinion is not the cat’s meow; it is not, by any means, a blowout for plaintiffs. Indeed, years from now, the defense bar may look back at this opinion and give it a tip of the hat. Why do I make such an extraordinary statement?

2.    Justice Scalia’s opinion is predicated on a determination that these claims sound in tort, and that accordingly traditional tort law principles of causation apply. Indeed, littered within the opinion are citations to some of the Court’s most recent jurisprudence on causation, drawn particularly from RICO and False Claims Act cases. A close review of that jurisprudence indicates that there are significant differences among the justices on proximate cause issues, which will undoubtedly be fodder for future disputes in employment discrimination cases.

3.    An apt example is the division articulated by Justice Kennedy in Anza v. Ideal Steel Supply Corp., 547 U.S. 451 (2006) (RICO), wherein the majority discusses the requirement of a “direct causal connection” between the alleged violation and the plaintiff’s injuries. In Anza, the majority (Justices Kennedy, Stevens, Scalia, Souter, Ginsburg, Alito, and Chief Justice Roberts) found the plaintiff had failed to establish a “direct causal connection”; whereas Justice Thomas in a scholarly concurrence and dissent sharply criticizes the majority for imposing a “stringent proximate-causation requirement,” contending that the Court, in essence, had misapplied its holding in Holmes v. Securities Investor Protection Corp., 503 U.S. 258 (1992) (RICO). Justice Thomas argued that Holmes “simply held that one reason that indirect injuries should not be compensable is that such injuries are difficult to ascertain . . . We did not adopt the converse proposition that any injuries that are difficult to ascertain must be classified as indirect for purposes of determining proximate causation.” Suffice it to say that the Staub Court’s reference to Anza at page nine of its slip opinion may signal that such disputes about proximate-causation will continue in future cases.

4.    I note also Justice Scalia’s concurrence in Anza in light of the decision in Thompson v. North American Stainless, 2011 U.S. LEXIS 913 (2011), in which Justice Scalia, writing for the Court, articulates a “zone of interest” test for standing in Title VII cases. In his Anza concurrence, he joins the Court’s opinion and notes that, for him, it is “inconceivable” that the injury alleged in that case is within the “zone of interests” protected by the RICO statute, referring back to his concurrence in Holmes at 503 U.S. at 286-90. This reference should merely remind all of us that the supposed victory for plaintiffs in North American Stainless may be largely a Pyrrhic victory given the Court’s adoption of a “zone of interest” test drawn from the jurisprudence of the Administrative Procedure Act.

5.    Also of note in Staub is Justice Scalia’s reference to the supposed split among the circuits on the question whether scienter can be established by aggregation of the states of mind of multiple individuals within the corporation. While the Court does not pass on the question, it is noteworthy that Justice Scalia gratuitously references the supposed split, citing two decisions from the D.C. Circuit, as well as a Fifth Circuit opinion, expressing “a good deal of skepticism about corporate intent theories that rely on aggregating the states of mind of multiple individuals.” United States v. Science Applications Int’l Corp., 626 F.3d 1257, 1274 (D.C. Cir. 2010) (Tatel, J.). Justice Scalia follows those cites with citations to a First Circuit and Fourth Circuit decisions supposedly embracing the “collective intent” theory. A close reading of Judge Tatel’s opinion in U.S. v. SAIC, suggests that it would be a misreading of both of these opinions, United States ex rel. Harrison v. Westinghouse Savannah River Co., 352 F.3d 980 (4th Cir. 2003) (False Claims Act) and United States v. Bank of New England, 821 F.2d 844 (1st Cir. 1987) (Currency Transaction Reporting Act).

6.    Justice Scalia’s citation to Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) (Federal Tort Claims Act) in Staub is also of interest, as Justice Souter in Sosa discusses the fact that proximate cause is “causation substantial enough and close enough to the harm to be recognized by law, but a given proximate cause need not be, and frequently is not, the exclusive proximate cause of harm.” I note that Justice Scalia’s citation to Sosa is really an indirect citation to his opinion discussing the fact that “in the ordinary case there may be several points along the chain of causality.” See Beattie v. United States, 244 U.S. App. D.C. 70, 756 F.2d 91, 121 (D.C. Cir. 1984) (Scalia, J., dissenting), cited with approval by Justice Souter in Sosa.

7.    Also, Staub, in all likelihood, is not the last word from the Court this term on proximate cause. The Court still has for decision a Federal Employee Liability Act (FELA) cases, CSX v. McBride, 598 F.3d 388 (7th Cir. 2010), cert. granted, 2010 U.S. LEXIS 9272 (Nov. 19, 2010), in which the Court is presented with the question of whether FELA requires proof than an employer’s negligence was the proximate cause of an employee’s injury or whether a showing that the negligence played some part in causing the injury is sufficient for liability.

8.    Numerous questions abound as a result of the Staub opinion, including the following:

a.     If there is an internal grievance / complaint procedure, and it is not mere “window dressing,” and it is not used by the plaintiff, is that an affirmative defense? In footnote 4, Justice Scalia notes that as a potential issue for another day.

b.    Of probably greatest significance is Justice Scalia’s repeated use of italics to highlight the fact that the discriminator must intend to cause the adverse employment action that is visited upon the plaintiff. So, it is presumably plaintiff’s burden to not only establish that someone other than the ultimate decisionmaker had a discriminatory intent, and that individual’s input was relied upon by the ultimate decisionmaker, plaintiff also must establish that the discriminating actor “designed and intended” to produce the adverse action, in Staub, termination. In Staub, the evidence was that the discriminating supervisor was “out to get” Staub.

c.     The Court also leaves for another day whether the employer would be liable if the discrimination emanated from a co-worker rather than a supervisor. See fn.4.

9.      Presumably, Hill v. Lockheed Martin Logistics Mgmt., 354 F.3d 277 (4th Cir. 2005), Furline v. Howard Univ., 953 A.2d 344 (D.C. 2008), and Ginger v. District of Columbia, 527 F.3d 1340 (D.C. Cir. 2008), are all no longer good law.

10.     Finally, the opinion has a rather slapdash quality to it, as though it were hastily written. One reference in the opinion that hopefully was not intended as an insult, but rather is merely a hallmark of some sloppy writing, is Justice Scalia’s footnote one where he refers to Judge Richard Posner of the Seventh Circuit merely as “Posner.”

 These are just some preliminary thoughts based on my initial reading of the opinion. I am still mining some of the cases cited by Justice Scalia, as well as the briefs and oral argument, to see what other signals might be discerned.

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