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Hyams v. CVS Health Corp.

United States District Court, N.D. California

September 13, 2019

RYAN HYAMS, Plaintiff,
CVS HEALTH CORPORATION, et al., Defendants.

          ORDER RE: DKT. NOS. 27, 32


         Defendants CVS Health Corporation, CVS Pharmacy, Inc., Garfield Beach CVS, LLC, and CVS RX Services, Inc.'s (together, “CVS”) motion to dismiss came on for hearing before this court on September 4, 2019. Plaintiff Ryan Hyams appeared through his counsel, Cathy Coble. Defendants appeared through their counsel, Daniel Fears. Having read the papers filed by the parties and carefully considered their arguments and the relevant legal authority, and good cause appearing, the court hereby rules as follows.


         This action stems from Hyams' former employment as a pharmacist for CVS. First Amended Compl. (“FAC”), Dkt. 22 ¶¶ 5, 13-16. The operative complaint alleges eight causes of action, each against all defendants: (1) Disparate Treatment Discrimination on the Basis of Race and/or Color in Violation of the California Fair Employment and Housing Act (“FEHA”); (2) Disparate Impact Discrimination on the Basis of Race and/or Color in Violation of FEHA; (3) Harassment on the Basis of Race and/or Color in Violation of FEHA; (4) Retaliation for Complaining of Discrimination and/or Harassment on the Basis of Race and/or Color in Violation of FEHA; (5) Failure to Prevent, Investigate, and Remedy Discrimination, Harassment, or Retaliation in Violation of FEHA; (6) Intentional Infliction of Emotional Distress; (7) Negligent Infliction of Emotional Distress; and (8) Wrongful Termination in Violation of Public Policy.

         Plaintiff was hired by CVS on December 15, 2015, after CVS acquired a pharmacy located in a San Francisco Target store where plaintiff had worked since June 2011.[1] Id. ¶ 18. Plaintiff “was the only Black full-time pharmacist out of 64 pharmacists in his District and over 200 pharmacists in his Region.” Id. ¶ 25. On or about May 19, 2017, plaintiff was selected by CVS for an audit of a Drug Utilization Review (“DUR”) system, although by the nature of the audit plaintiff was not informed that it was occurring. Id. ¶ 26. The audit essentially consisted of CVS creating a digital record of a fictitious patient with various ailments and drug prescriptions, designed to test pharmacists' detection of possible drug interactions. Id. ¶¶ 27-29. When undergoing the audit, plaintiff bypassed a warning screen (which he was not trained on), made notations in the patient file, and then approved the prescription. Id. ¶ 29. Plaintiff marked the physical bag containing the prescription for an in-person oral consultation regarding drug interactions. Id. ¶ 31.

         On or about July 18, 2017, CVS contacted plaintiff regarding the DUR audit. Id. ¶ 37. Interactions between plaintiff and CVS's human resources department ensued. Id. ¶¶ 37-45. On or about August 25, 2017, plaintiff was terminated in an in-person meeting, was told that he was the only Black pharmacist employed by CVS in his Region, and was told that he was the only individual selected for the DUR audit. Id. ¶ 45.

         On July 3, 2018, plaintiff filed an administrative complaint with the Department of Fair Employment and Housing (“DFEH”), and he received a DFEH right-to-sue letter on the same day. Id. ¶ 60; see Defendants' RJN, Dkt. 28, Ex. A at ECF pp. 5-7 (the “DFEH Charge”).

         On August 21, 2018, plaintiff filed a civil complaint against CVS in the Superior Court of the State of California, County of San Francisco. Dkt. 3, Ex. A. The action was removed to this court on October 12, 2018. Dkt. 1. The original complaint stated seven of the same causes of action as the FAC, but it did not state the FAC's second cause of action for disparate impact discrimination. On June 26, 2019, the parties submitted a joint stipulation to permit plaintiff to file a FAC. On June 27, 2019, the court entered the stipulated order, and plaintiff filed the FAC. Dkts. 21-22. On July 11, 2019, CVS filed an answer to the FAC. Dkt. 23. On July 30, 2019, defendants filed the present motion to dismiss the FAC's second claim for disparate impact discrimination. Dkt. 27.


         A. Legal Standard

         “After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). “Judgment on the pleadings is properly granted when, accepting all factual allegations in the complaint as true, there is no issue of material fact in dispute, and the moving party is entitled to judgment as a matter of law. Analysis under Rule 12(c) is substantially identical to analysis under Rule 12(b)(6) because, under both rules, a court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy.” Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (internal quotation marks and citations omitted); accord Dworkin v. Hustler Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989) (“The principal difference between motions filed pursuant to Rule 12(b) and Rule 12(c) is the time of filing.”).

         B. Analysis

         Defendants move to dismiss under two alternate grounds. First, they move under Rule 12(b). A motion to dismiss pursuant to Rule 12(b) “must be made before pleading if a responsive pleading is allowed.” Fed.R.Civ.P. 12(b). Because defendants filed an answer before asserting their Rule 12(b) defense, the Rule 12(b) motion is untimely and is therefore DENIED. See Dkt. 23 (answer).

         In the alternative, defendants move to dismiss under Rule 12(c). The parties agree that Rule 12(c) is an appropriate vehicle for defendants' motion, and the court presently considers defendants' Rule 12(c) motion.

         Before suing for a FEHA violation, an employee must exhaust his administrative remedies by filing a timely and sufficient complaint (called a “charge”) with the DFEH and receiving a right-to-sue notice. Cal. Gov't Code §§ 12960, 12965(b); Rodriguez v. Airborne Express, 265 F.3d 890, 896-97 (9th Cir. 2001). “The scope of the written administrative charge defines the permissible scope of the subsequent civil action. Allegations in the civil complaint that fall outside of the scope of the administrative charge are barred for failure to exhaust.” Id. at 897 (citation omitted).

         “Disparate treatment is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of their race, color, religion, sex, or other protected characteristic. Liability in a disparate-treatment case depends on whether the protected trait actually motivated the employer's decision. By contrast, disparate-impact claims involve employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity. Under a disparate-impact theory of discrimination, a facially neutral employment practice may be deemed illegally discriminatory without evidence of the employer's subjective intent to discriminate that is required in a disparate-treatment case.” Raytheon Co. v. Hernandez, 540 U.S. 44, 52-53 (2003) (internal quotation marks, citations, and alterations omitted). “Because these claims arise from different theories, a party cannot rely on allegations supporting one to administratively exhaust the other.” Lindsey v. United Airlines, Inc., No. 17-cv-00753-WHA, 2017 WL 2404911, at *2-3 (N.D. Cal. June 2, 2017) (citing Brown v. Puget Sound Elec. Apprenticeship & Training Trust, 732 F.2d 726, 729-30 (9th Cir. 1984)); accord De Los Santos v. Panda Exp., Inc., No. 10-cv-01370-SBA, 2010 WL 4971761, at *4 (N.D. Cal. Dec. 3, 2010) (collecting cases).

         The parties do not dispute that plaintiff has exhausted his disparate treatment claim. The parties also do not dispute that plaintiff must separately exhaust his administrative remedies with respect to his disparate impact claim in order to pursue that theory of discrimination in this civil action. Plaintiff argues that he has exhausted his administrate remedies with respect to this disparate impact theory for two reasons. First, plaintiff argues that his DFEH Charge actually asserted a discrimination claim based on disparate impact. Second, plaintiff argues that even if his DFEH ...

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