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Linenbroker v. Itt Educational Services Inc.

United States District Court, E.D. California

September 24, 2014

ITT EDUCATIONAL SERVICES INC. dba ITT TECHNICAL INSTITUTE, a California Corporation; and DOES 1-50, Defendants.


LAWRENCE J. O'NEILL, District Judge.


Judges in the Eastern District of California carry the heaviest caseloads in the nation, and this Court is unable to devote inordinate time and resources to individual cases and matters. Given the shortage of district judges and staff, this Court addresses only the arguments, evidence, and matters necessary to reach the decision in this order. The parties and counsel are encouraged to contact the offices of United States Senators Feinstein and Boxer to address this Court's inability to accommodate the parties and this action. The parties are required to reconsider consent to conduct all further proceedings before a Magistrate Judge, whose schedules are far more realistic and accommodating to parties than that of U.S. District Judge Lawrence J. O'Neill, who must prioritize criminal and older civil cases.

Civil trials set before Judge O'Neill trail until he becomes available and are subject to suspension mid-trial to accommodate criminal matters. Civil trials are no longer reset to a later date if Judge O'Neill is unavailable on the original date set for trial. Moreover, this Court's Fresno Division randomly and without advance notice reassigns civil actions to U.S. District Judges throughout the nation to serve as visiting judges. In the absence of Magistrate Judge consent, this action is subject to reassignment to a U.S. District Judge from outside the Eastern District of California.


Plaintiff Scott Linenbroker began working as a sales representative for Defendant ITT Technical Institute in 2005. Plaintiff's (First) Amended Compl. (hereinafter "FAC"), Doc. No. 22, ¶ 5. Plaintiff claims that he was impermissibly dismissed from this position in July of 2013 due to his advanced age. Id. at ¶¶ 20-21. He seeks to recover under the California's Fair Employment and Housing Act ("FEHA"), Cal. Gov't Code §§ 12940(a) & 12941. Id. Defendant moves this Court to dismiss Plaintiff's Second of Cause of Action for age discrimination under the disparate impact theory of proof, on the basis that Plaintiff failed to exhaust his administrative remedies for that claim. Defendant's Motion to Dismiss (hereinafter "Def.'s Mem."), Doc. 23. Defendant also moves this court to strike Plaintiff's demand for punitive damages on the basis that they are not available for disparate impact claims. Id.


A. Factual Background

Plaintiff was hired by Defendant in October of 2005 as a "Senior I Representative" and was responsible for recruiting students to enroll in Defendant's educational courses. FAC ¶ 5. At some point, Plaintiff was promoted to the level of "Senior II Representative." Id. Plaintiff claims that he "consistently received very good performance evaluations throughout his employment, received positive reviews, received regular merit increases, and was periodically promoted. Id. at ¶ 6. Plaintiff was "suddenly" dismissed from his position on July 10, 2013. Id. at ¶ 8. Plaintiff claims that he was 64 years old at the time and the second oldest employee in his department. Id. at ¶ 7. Plaintiff alleges that while he was told that he was dismissed "for performance reasons, " "[y]ounger individuals with weaker performance[s] ( sic ) were retained." Id. at ¶ 8. He also maintains that his performance "was equal to or better than the performance of several younger, lower paid, employees who were retained by Defendant after Plaintiff's termination" and that younger employees "were given the opportunity to decline promotions which came with higher performance metrics." Id. at ¶¶ 10, 12.

B. Procedural Posture

Plaintiff filed a "Complaint of Discrimination" with California's Department of Fair Employment and Housing ("DFEH") on December 10, 2013. Defendant's Motion to Dismiss, Ex. C[1], Doc. 24 at 28-29. Plaintiff alleged the following in his administrative complaint:

I was hired by ITT Educational Services, Inc. dba ITT Technical Institute, on or about 10/5/2005. I was a Sr. II Representative, tasked with talking to potential students, and had an excellent performance record. I also got raises to the second highest in the department. I was also the second oldest in the department. I am now 64 years of age. On July 10, 2013, with no warning and no change in my performance, I was suddenly terminated. The pretext given was that this termination was somehow performance based, but my performance was equal to or better than that of several younger, lower paid, employees who were retained. The local managers never criticized my performance, and told me my termination was a decision made by someone else, off-site, and that the District Manager and Home Office managers refused to answer their questions about their direction to fire me. No progressive discipline was used, no verbal warning was given. Younger employees were kept and were given progressive discipline if their performance faltered.

Id. Per Plaintiff's request, DFEH issued an immediate "right to sue" notice and took no further action regarding his case. Notice of Removal, Ex. A, Doc. 24 at 9. Shortly thereafter, Plaintiff filed a claim in Fresno County Superior Court alleging Defendants unlawfully discharged Plaintiff because of his age, in violation of FEHA Section 12940(a). Id. at 4. Defendant removed the case to this Court pursuant to 28 U.S.C. § 1441(b). Notice of Removal, Doc. 2.

Shortly thereafter, Plaintiff filed his amended complaint to include a claim based on FEHA Section 12941. FAC ¶ 29. Section 12941 allows plaintiffs to recover when the terms or conditions of their employment have been applied in a manner that discriminates against people over age of 40. Cal. Gov. Code § 12941. In the FAC, Plaintiff alleges that several of Defendant's "policies" had disparate impacts on workers and "gave substantially younger workers more favorable treatment." FAC ¶ 13. For example, Plaintiff alleges that older workers were forcibly "promoted" to positions with higher performance standards; whereas younger workers were allowed to decline the promotions. FAC ¶¶ 12-13.

Defendant moved this Court to dismiss the Second Cause of Action, under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), on the basis that this Court does not have jurisdiction to hear this claim because Plaintiff failed to exhaust his administrative remedies prior to filing this claim. Def.'s. Mem., 3-4. Defendant also moved to strike Paragraph 38, which requested an award of punitive damages for this claim, on the basis that claims based on theories of disparate impact are categorically precluded from punitive damage awards. Id. at 8.

C. Legal Background of FEHA's Administrative Exhaustion Requirement

FEHA requires potential plaintiffs "to participate in mandatory dispute resolution in the department's internal dispute resolution division" prior to filing a complaint in court, "in an effort to resolve the dispute without litigation." Cal. Gov't Code. § 12965(a). The first step in this process is filing an administrative complaint with DFEH. Id. at § 12960(b). The administrative complaint must be filed within a year of the alleged unlawful practice. Id. at § 12960(d). Plaintiff may demand the DFEH issue them a "right-to-sue" letter if the Department does not bring a civil action within 150 days' of filing the administrative ...

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