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Rotherham v. Diego/Imperial Counties Chapter of the American Red Cross

March 5, 2007


The opinion of the court was delivered by: Hon. Roger T. Benitez United States District Judge



Plaintiff Donita C. Rotherham ("Rotherham" or "Plaintiff") brings this action against Defendants American Red Cross ("Red Cross") and San Diego/Imperial Counties Chapter of the American Red Cross ("San Diego Chapter" or the "Chapter") (collectively "Defendants") alleging breach of employment contract and other related causes of action. Defendants move for summary judgment on the basis that Rotherham was an at-will employee, and regardless, any termination was for good cause. Plaintiff opposes the motion.


Plaintiff was the CEO of the San Diego Chapter of the American Red Cross. She began her employment with the Red Cross in 1971 when she was hired into Nursing and Health Services at the Chapter. (Pl. Facts ¶ 59)*fn1 . In 1972, she was promoted to Director, Nursing and Health Services, and held that position until 1979. (Id. at ¶ 61). Over the course of her employment, Rotherham participated in the "Career Development Program" designed to assist employees further their careers. That program included educational incentives, which Rotherham used beginning in 1974 to obtain her M.S. degree in Community Health from Loma Linda University. (Id. at ¶¶ 62-66). In 1981, Rotherham became Group Manager/Director of Nursing and Health Services. While serving in that position, the Chapter Manager arranged for Rotherham to enroll in the Red Cross's National Career Development Program for management. (Id. at ¶74). Rotherham became the Chapter Manager in 1983, then the Executive Director, a title which later was changed to CEO. (Id. at ¶¶ 77, 81, 83). The Chapter grew substantially under her leadership, and by 2002 had become the third largest chapter in the country. (Id. at ¶ 83). Rotherham was evaluated annually, and until the period at issue in this action, the results were consistently positive.

On January 3, 2001, a fire broke out in the Alpine/Jamul area of San Diego County (the "Alpine Fire"). (Def. Facts at ¶ 10).*fn2 The San Diego Chapter responded with various forms of disaster assistance. The Chapter raised approximately $400,000 in relation to disaster relief for the Alpine Fire. (Def. Facts at ¶ 11). Concerns began to be raised that the money raised from the Alpine Fire was not being spent solely on disaster relief in the Alpine community. On February 2, 2001, County Supervisor Dianne Jacob sent a letter to the Chapter asking that all funds raised during the Alpine Fire be spent in the Alpine community. (Pl. Facts at ¶98). A few weeks after that, John A. Baddour, a victim of the Alpine Fire, sent a letter to the California Attorney General complaining about the Chapter's response to the fire and its solicitation practices. (Def. Facts at ¶ 12). Beginning in March 2001, the local and national media began to scrutinize the Chapter's response to the Alpine Fire, and its handling of funds raised. (Pl. Facts at ¶99; Def. Facts at ¶ 13). Plaintiff met with Supervisor Jacob on May 10, 2001 to discuss what the Red Cross does in times of a disaster, how the Red Cross handles funds, and the overall role of the San Diego Chapter. (Pl. Facts at ¶ 101). In addition, Rotherham raised the issue with Jacob of the difficulty the Chapter was experiencing getting clients to respond to contact from Red Cross caseworkers. As a follow-up to that meeting, on June 25, 2001 Plaintiff and Jacob met with victims of the Alpine fire and their families to discuss the San Diego Red Cross's response to the fire. (Pl. Facts at ¶ 102). The meeting rapidly degenerated into what was characterized by the media as a no-holds-barred gripe session. (Def. Facts at ¶ 14).

Plaintiff's relationship with Supervisor Jacob and the media continued to deteriorate. On August 8, 2001, Jacob sent a letter to the President of the American Red Cross, Dr. Bernadine Healy, complaining about Rotherham and the Chapter's handling of the Alpine Fire. (Id. at ¶ 16). Healy responded by ordering a special review of the Chapter by the Red Cross headquarters. (Id. at ¶ 17). Internal auditors conducted the review in August 2001, and a special report was issued by the American Red Cross on September 12, 2001. (Id. at ¶ 18). On November 1, 2001, without the approval of the American Red Cross, the public relations firm hired by the San Diego Chapter released an "Executive Summary" of the report. (Id. at ¶ 19). Subsequently, the San Diego Union Tribune obtained a copy of the full report, which it found to be substantially different from the summary released by the Chapter. (Id. at ¶ 21). The media firestorm continued, and by December 2001, the San Diego Union Tribune called for Rotherham's resignation on the basis of the Chapter's credibility problem and her inability to resolve it. (Id. at ¶ 13).

Also in December 2001, a Blue Ribbon Committee comprised of local citizens not affiliated with the Chapter was formed to review Chapter operations. (Id. at ¶ 26). The Blue Ribbon Committee recommended that the Chapter's leadership, including Rotherham, be removed. Several leaders of the Chapter resigned in response to the report. (Id. at ¶ 27, 31). In addition, two separate government investigations were launched - one by the California Attorney General into issues related to Plaintiff's compensation, the Chapter's management of funds and American Red Cross's solicitation of funds; and the second a qui tam action by the County Counsel's office relating to alleged fraud in the Chapter's delivery of transportation services to the City and County. (Id. at ¶¶ 28-29). The Blue Ribbon Committee subsequently issued its final report in June 2002, in which it noted the resignations of Chapter leadership other than Rotherham, and recommended that she be removed. (Id. at ¶ 31). Rotherham was fired in June 2002.


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 judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party has the burden of demonstrating the absence of a genuine issue of material fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). If the moving party meets this burden, the opposing party must set forth specific facts showing that a genuine issue remains for trial. Fed. R. Civ. P. 56(e).

"The moving defendants need provide nothing more than a reference to those materials on file in the case which support the movant's belief that there is an absence of any genuine issue of material fact." Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir. 1990). An adverse plaintiff, however, must "offer evidence sufficient to raise a genuine issue of fact on an issue on which plaintiff has the burden of proof." Id. "[S]ummary judgment should be granted where the nonmoving party fails to offer evidence from which a reasonable jury could return a verdict in its favor." Triton Energy Corp. v. Square D Co., 68 F.3d 1216 (9th Cir. 1995) (internal citation omitted).

An issue of fact is only genuine if it can reasonably be resolved in favor of either party. Anderson v. Liberty Lobby, 477 U.S. at 250-51. "A mere scintilla of evidence supporting the nonmoving party's position is insufficient; there must be evidence on which a jury could reasonably find for the nonmoving party." Rivera v. Phillip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir. 2005). "The substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, 477 U.S. at 248.

A. Breach of ...

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