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Markey v. Kudelski

March 26, 2008


The opinion of the court was delivered by: Hon. Thomas J. Whelan United States District Judge


On July 11, 2006 Plaintiff John Markey ("Plaintiff") commenced this action against Defendants Kudelski S.A., Nagravision S.A., and Nagra USA, Inc. alleging breach of contract, wrongful termination and adverse action, and employment discrimination. (Doc. No. 1.) Pending before the Court is Defendant Nagravision's and Defendant Nagra USA, Inc.'s (collectively, "Defendants") Motion for Attorney's Fees. (Doc. No. 83.) The Court decides the matter on the papers submitted and without oral argument pursuant to S.D. Cal. Civ. R. 7.1(d.1). For the reasons stated below, the Court DENIES Defendants' motion for attorney's fees. (Doc. No. 83.)


On July 11, 2006, Plaintiff filed a complaint against Defendants alleging nine causes of action: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) wrongful termination in violation of public policy; (4) wrongful adverse action in violation of public policy; (5) national origin discrimination under the California Fair Employment and Housing Act; (6) national origin discrimination under Title VII of the Civil Rights Act of 1964; (7) continuing disability discrimination in violation of California Government Code § 12940; (8) age discrimination in violation of California Government Code § 12940; and (9) age discrimination in violation of the Age Discrimination in Employment Act. (Doc. No. 1.) On November 7, 2007, Defendants filed an amended Motion for Summary Judgment, or in the alternative, Partial Summary Judgment. (Doc. No. 64.) On January 3, 2008, the Court granted Defendants' Motion for Summary Judgment in its entirety and dismissed all of Plaintiff's breach of contract and discrimination claims with prejudice. (Order Granting Defs.' Mot. for Summ. J. 22 [hereinafter Order].)

A. Plaintiff's Breach of Contract Claim

In his complaint, Plaintiff alleged that Defendants breached his employment contract because he was terminated without the required notice, without cause, and without being paid his required bonuses. (Compl. ¶¶16--19.) Defendants argued that, under Swiss law, they had valid reasons to accelerate the termination of Plaintiff's contract after initially providing three months notice. (Defs.' Summ. J. Mot. 15.) Specifically, Plaintiff's low productivity and absenteeism gave Defendants valid reasons to immediately terminate Plaintiff, despite giving the three months as required by contract. (Id. 15--16.) Plaintiff did not dispute his low output, but argued that his absenteeism resulted from Defendants' refusal to cover travel costs. (Pl.'s Opp'n 9.) Because the Court determined it was undisputed that valid reasons existed to accelerate the ultimate termination of Plaintiff's contract, there were no genuine issues of material fact concerning Defendants' alleged breach of contract. (Order 11.) The Court dismissed Plaintiff's first cause of action with prejudice. (Id.)

B. Plaintiff's Implied Covenant of Good Faith and Fair Dealing Claim

In his complaint, Plaintiff alleged that Defendants breached an implied covenant in his employment contract because Defendants did not fairly, honestly, and reasonably perform the terms and conditions of the contract. (Compl. ¶¶ 20--23.) Defendants argued that Plaintiff's claim for breach of the implied covenant of good faith and fair dealing failed because Swiss law did not imply any such covenant, and Plaintiff's contract had to be analyzed under Swiss law. (Defs.' Summ. J. Mot. 17.) Even if California law was applied, Defendants contended, the implied covenant could not be used to secure benefits in addition to those for which the parties contracted. (Id.) Plaintiff responded by arguing that the covenant could be violated if an employee's termination was a mere pretext to cheat the employee out of a benefit to which they were already entitled. (Pl.'s Opp'n 10.) Plaintiff argued that because Defendants did not give him work, he was unable to earn the discretionary bonus he had previously been paid. (Id.) The Court ruled that Plaintiff presented no evidence suggesting Defendants frustrated Plaintiff's rights to receive any benefits under the original employment agreement. (Order 11.) The Court also determined that Plaintiff produced no evidence that his employment agreement entitled him to some minimum level of guaranteed contact or assigned work. (Id.) Thus, because Plaintiff did not produce any evidence showing that Defendants frustrated or refused any actually agreed upon right or benefit, the Court dismissed Plaintiff's second claim with prejudice. (Id. 12.)

C. State and Federal Discrimination Claims

In his complaint, Plaintiff alleged that Defendants discriminated against and otherwise unlawfully treated him on the basis of his national origin, disability, and age. (Compl. ¶¶ 34--70.) Defendants argued that under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) they, as employers, articulated legitimate, non-discriminatory reasons for Plaintiff's alleged adverse employment actions. (Defs.' Summ. J. Mot. 18.) Because Plaintiff could not show that these reasons were pretextual, Plaintiff's discrimination claims necessarily failed at the summary judgment stage. (Id. 18--19.) Plaintiff argued that he had established prima facie claims for employment discrimination, and in a conclusory manner argued that, from the record, a jury might be able to find in his favor. (Pl.'s Opp'n 10--11.)

The Court found that Plaintiff seemed to complain of two adverse actions: (1) his appointment to Strategic Advisor in 2002, and (2) his termination in 2004. (Compl. ¶¶ 11, 13.) As a threshold issue, the Court determined that Plaintiff's appointment to Strategic Advisor was not an adverse action, and thus not actionable. (Order 14.) Ultimately, the Court ruled that Defendants articulated and supported several legitimate reasons for Plaintiff's termination, which Plaintiff failed to show were pretextual. (Id. 15--19.)

1. Plaintiff's National Origin Discrimination Claims

In his complaint, Plaintiff alleged that Defendants engaged in a course of discriminatory and harassing conduct against him because he was an American working for a Swiss company. (Compl. ¶¶34--49.) Defendants contended that Plaintiff's national origin discrimination claims were based on nothing more than a few "stray remarks" unrelated to his termination. (Defs.' Summ. J. Mot. 23--25.) Plaintiff generally alleged that he had evidenced numerous comments showing animosity toward him based on his national origin which were sufficient for a jury to find in his favor. (Pl.'s Opp'n 11.) Plaintiff also claimed that Nagravision's reasons for dismissal were pretextual because Plaintiff was never told that his job performance was unsatisfactory. (Id.)

The Court held that Plaintiff failed to demonstrate that the purported discriminatory national origin comments were anything more than stray remarks unrelated to the decision to terminate him. (Order 17.) Although Plaintiff argued that discrimination must have been behind his termination because no one told him that his performance was lacking, Plaintiff provided no evidence that Defendant had an affirmative duty to counsel him. (Id.) Because Plaintiff failed to produce evidence of pretext on ...

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