Luke Spencer v. FEI, Incorporated ( 2018 )

Case: 17-10159 Document: 00514348566 Page: 1 Date Filed: 02/15/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 17-10159
Fifth Circuit
FILED
February 15, 2018
LUKE SPENCER, Lyle W. Cayce
Clerk
Plaintiff - Appellant
v.
FEI, INCORPORATED,
Defendant - Appellee
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:15-CV-2214
Before STEWART, Chief Judge, CLEMENT, and SOUTHWICK, Circuit
Judges.
PER CURIAM:*
Luke Spencer filed suit against FEI, Incorporated, alleging it had
terminated his employment in violation of the Americans with Disabilities Act,
the Texas Commission on Human Rights Act, and the Employee Retirement
Income Security Act. The district court granted summary judgment to FEI.
We AFFIRM.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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FACTUAL AND PROCEDURAL BACKGROUND
FEI, Incorporated designs and fabricates conveyor systems. In 2007,
FEI hired Luke Spencer as an engineering manager. Before Spencer was
offered the job, he informed FEI that his wife, Jacquelyn Spencer, had a rare
terminal liver disease known as primary sclerosing cholangitis that would
require extensive and costly medical treatment. With that knowledge, FEI
hired Spencer.
Initially, FEI provided Spencer various accommodations so he could
maintain a full-time job and also take care of his wife, including permitting
Spencer to have a different work schedule than his colleagues and granting his
time-off requests.
While Spencer was employed at FEI, Medicare was the primary insurer
for his wife’s health care. It covered up to 80% of her medical expenses. FEI
covered the remaining 20% but only for the first $20,000 in costs each year.
Once this $20,000 cap was reached, FEI’s stop-loss insurance covered the
expenses. The price of FEI’s insurance policy each year was impacted by its
prior claim history.
In 2013, FEI experienced over a $3,500,000 decrease in its sales revenue
from the prior year, causing FEI to undertake internal organizational changes.
Among the changes was to terminate five of its thirty-five employees, Spencer
being among the five. As reasons for Spencer’s discharge, FEI cited his high
salary that was not commensurate with his productivity, his poor job
performance, his lack of profitability for the company, and management’s lack
of confidence in him.
Spencer brought this lawsuit in the United States District Court for the
Northern District of Texas against FEI, alleging he was not terminated for the
reasons cited by FEI but because of Mrs. Spencer’s high health care costs.
Spencer claimed his termination amounted to discrimination in violation of a
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variety of federal and state statutes. Relevant here are Spencer’s claims that
FEI terminated him in violation of the Americans with Disabilities Act
(“ADA”), the Texas Commission on Human Rights Act (“TCHRA”), and the
Employee Retirement Income Security Act (“ERISA”). 1
FEI moved for summary judgment. In Spencer’s response, he requested
that any ruling on the summary judgment motion be delayed until additional
discovery was obtained. See FED. R. CIV. P. 56(d). Spencer also filed a separate
motion to compel discovery. That motion sought an order directing a nonparty,
Frost Insurance Agency, to produce documents relating to health insurance
plans FEI purchased through Frost and to provide a corporate representative
to be deposed regarding the agency’s dealings with FEI concerning the plans.
The district court granted summary judgment for FEI. It held that
Spencer had not demonstrated that a triable issue of fact existed for his ADA
and TCHRA claims, as he had not shown that FEI’s reasons for terminating
him were pretextual. The court also concluded there was no triable issue of
fact on Spencer’s ERISA claim because he had failed to plead how FEI acted
with specific discriminatory intent when it terminated his employment.
The district court denied Spencer’s motion for a delay in ruling on
summary judgment and for compelling discovery, finding it was “highly
unlikely that the new evidence Spencer expect[ed] to obtain . . . would be
sufficient to show that [FEI] acted with pretext.” The court also determined
that the motion was untimely, overly broad, not reasonably calculated to lead
to the discovery of admissible evidence, and potentially violative of the rights
of nonparties under the Health Insurance Portability and Accountability Act
of 1996. Spencer timely appealed.
1 Spencer had also asserted claims under the Family and Medical Leave Act (“FMLA”)
for retaliation and interference. See 29 U.S.C. § 2615 (2016). Spencer agreed to dismiss these
claims because FEI does not have fifty or more employees. See id. § 2611(4)(A)(i).
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DISCUSSION
I. Motion to Compel
This court reviews discovery rulings for abuse of discretion and will only
reverse such rulings when they are arbitrary or clearly unreasonable. Angus
Chem. Co. v. Glendora Plantation, Inc., 782 F.3d 175, 179 (5th Cir. 2015).
Spencer filed this lawsuit on July 2, 2015. The district court’s scheduling
order set the discovery deadline and trial date for January 13, 2017, and
February 6, respectively. Spencer waited until November 17, 2016, which was
after FEI had filed its motion for summary judgment, to serve his first
deposition subpoenas on Frost. Spencer then waited until December 2 to serve
a notice of deposition. The district court quashed the deposition and subpoenas
on December 15 because they sought to compel testimony and document
production from Melissa Jenkins, a nonparty and the Frost insurance agent
through whom FEI purchased its health insurance plans, on a date when
Jenkins’ counsel had previously told Spencer that he and Jenkins were not
available for a deposition.
“Consistent with the authority vested in the trial court by [R]ule 16, our
court gives the trial court ‘broad discretion to preserve the integrity and
purpose of the [scheduling] order.’” See Geiserman v. MacDonald, 893 F.2d
787, 790 (5th Cir. 1990) (quoting Hodges v. United States, 597 F.2d 1014, 1018
(5th Cir. 1979)). Given the imminence of trial, the impending discovery
deadline, and Spencer’s failure to make an earlier request for the deposition
and production of documents, the district court did not abuse its discretion in
denying Spencer’s motion to compel. See, e.g., Turnage v. Gen. Elec. Co., 953
F.2d 206, 209 (5th Cir. 1992).
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II. Summary Judgment
We review an order granting summary judgment de novo and apply the
same standard as the district court. SCA Promotions, Inc. v. Yahoo!, Inc., 868
F.3d 378, 381 (5th Cir. 2017). Summary judgment is proper if the moving party
“shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). This court
“view[s] all facts and evidence in the light most favorable to the non-movant.”
James v. State Farm Mut. Auto. Ins. Co., 743 F.3d 65, 68 (5th Cir. 2014).
Summary judgment should be granted to a defendant who demonstrates
that the plaintiff has offered no evidence on an issue for which it has the
burden of proof, unless the plaintiff’s response to the motion is to produce
sufficient evidence to support a finding in its favor on that issue. Id.
We consider Spencer’s ADA and TCHRA claims together and then
address his ERISA claim.
A. Associational discrimination under the ADA and TCHRA
FEI accepts that Mrs. Spencer’s illness qualifies her under the two
relevant statutes as having a “disability.” For purposes of this case, we accept
that concession. Employers are prohibited under the ADA from taking adverse
employment action “because of the known disability of an individual with
whom the qualified individual is known to have a relationship or association.”
42 U.S.C. § 12112(b)(4) (2016). Under the TCHRA, an “employer commits an
unlawful employment practice if because of . . . disability . . . [it] discharges an
individual, or discriminates in any other manner against an individual in
connection with compensation or the terms, conditions, or privileges of
employment.” TEX. LAB. CODE § 21.051(1). The TCHRA “is modeled after
federal civil rights law . . . [and] purports to correlate ‘state law with federal
law in the area of discrimination in employment.’” NME Hosps., Inc. v.
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Rennels, 994 S.W.2d 142, 144 (Tex. 1999) (quoting Schroeder v. Tex. Iron
Works, Inc., 813 S.W.2d 483, 485 (Tex. 1991)).
“In a discriminatory-termination action under the ADA, the employee
may either present direct evidence that she was discriminated against because
of her disability or alternatively proceed under the burden-shifting analysis
first articulated in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)[.]”
E.E.O.C. v. LHC Grp., Inc., 773 F.3d 688, 694 (5th Cir. 2014). Both parties
submit that the McDonnell Douglas burden-shifting analysis applies to the
present claims. Accordingly, we apply it here.
Spencer must first establish a prima facie case of discrimination. Id. If
he does, the burden shifts to FEI to articulate a “legitimate, nondiscriminatory
reason” for terminating Spencer. Id. If FEI presents such a reason, Spencer
must then show by a preponderance of the evidence that FEI’s reason is pretext
for discrimination. Bocalbos v. Nat’l W. Life Ins. Co., 162 F.3d 379, 383 (5th
Cir. 1998).
We agree with a prior opinion that this court has not “explicitly
recognized a cause of action for discrimination based on association with a
handicapped individual, nor have we described what such a claim requires.”
Grimes v. Wal-Mart Stores Tex., L.L.C., 505 F. App’x 376, 380 n.1 (5th Cir.
2013). If such an action were viable, a “prima facie case of associational
discrimination would require that the Plaintiff show (1) her qualification for
the job, (2) an adverse employment action, (3) the employer’s knowledge of the
employee’s disabled relative, and (4) that the adverse employment action
occurred under circumstances raising a reasonable inference that the relative’s
disability was a determining factor in the employer’s adverse action.” Id. at
380. Similar to other panels of this court addressing the unsettled viability of
associational discrimination claims, we assume without deciding that Spencer
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has presented sufficient evidence to support a prima facie case of
discrimination. Id. at 380–81.
In the district court, Spencer conceded that the reasons FEI offered were
facially legitimate and nondiscriminatory. FEI included noneconomic reasons
such as Spencer’s limited productivity, his inability to process jobs that could
be used in manufacturing, his untimely completion of projects, and
management’s lack of confidence in him. Those factors combined with a
downturn in FEI’s sales in 2013. Following the downturn, FEI decreased the
number of its employees from 35 to 30, a reduction that included Spencer. FEI
has not hired anyone to replace Spencer. These noneconomic and economic
reasons are sufficient to shift the burden back to Spencer. A reduction in force
“is itself a legitimate, nondiscriminatory reason for discharge.” E.E.O.C. v.
Tex. Instruments Inc., 100 F.3d 1173, 1181 (5th Cir. 1996).
Thus, the burden shifted back to Spencer to show by a preponderance of
the evidence that FEI’s reasons were pretextual. That means either that (1)
FEI’s reasons were false or (2) FEI’s reasons, while true, were but only some of
the reasons for its conduct, another operative reason being Spencer’s protected
characteristic. See Vaughn v. Woodforest Bank, 665 F.3d 632, 636 (5th Cir.
2011). Spencer argues he has shown pretext by asserting that each of FEI’s
noneconomic reasons for firing him are false and that Duane Murray, FEI’s
owner, had no personal knowledge of these reasons.
In support of his first contention, Spencer relies solely on his self-serving
affidavit. A self-serving affidavit alone, though, will not defeat a motion for
summary judgment. DIRECTV, Inc. v. Budden, 420 F.3d 521, 531 n.49. (5th
Cir. 2005).
As to Spencer’s second contention, FEI’s owner Duane Murray testified
that he acquired personal knowledge through the complaints he received
regarding Spencer’s work. Regardless, Spencer has cited no authority that an
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owner of a business must have first-hand personal knowledge of the reasons
for firing an employee in order for those reasons to be legitimate and
nondiscriminatory. Spencer’s direct supervisor was David Murray, whose
testimony supports each of FEI’s noneconomic reasons for firing Spencer.
Spencer questions the legitimacy of FEI’s economic reason for
terminating his employment by contending the alleged loss of sales in 2013
was really “a move back to equilibrium after an unusual year based on an
unusual need from a particular customer.” The record reflects that FEI’s sales
experienced a peak in 2012, as its sales totaled $5,002,625 in 2010; $7,075,215
in 2011; $11,054,126 in 2012; $7,388,155 in 2013; $8,026,590 in 2014; and
$7,322,020 in 2015. Duane Murray acknowledged in his deposition testimony
that 2012 was “an exceptional year.” According to Spencer, the annual trend
in FEI’s sales before and after 2012 shows that FEI needed him before the
“bubble of 2012” and would need him just as much after.
Even if FEI’s sales in 2013 were a return to normalcy, this fact does not
create a triable fact issue as to whether FEI’s economic reason for firing
Spencer was false. To show pretext, Spencer must do more than cast doubt on
whether FEI had just cause for terminating him; rather, he must show that a
reasonable factfinder could conclude that FEI’s reasons are unworthy of
credence. Moore v. Eli Lilly & Co., 990 F.2d 812, 815–16 (5th Cir. 1993).
Prior to 2012, FEI generally had about 30 employees. In 2012, the year
reflecting FEI’s highest sales, it had 35 employees. When FEI’s sales decreased
the next year, by more than $3,500,000, it decreased its workforce to 30
employees. Since the peak year in 2012, FEI has maintained around 30
employees. Under these facts, a reasonable fact finder could not conclude that
FEI’s economic reason for terminating Spencer is unworthy of credence. That
FEI’s sales may have returned to equilibrium in 2013 is insufficient to show
that FEI’s economic reason for terminating Spencer was pretextual.
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Spencer has presented insufficient evidence on the issue of whether
FEI’s otherwise legitimate and nondiscriminatory reasons for terminating his
employment were simply a pretext. Summary judgment dismissing Spencer’s
claims under the ADA and the TCHRA was properly granted.
B. Associational discrimination under ERISA
It is unlawful under ERISA for any person to discharge a participant or
beneficiary for exercising “any right to which he is entitled under the
provisions of an employee benefit plan.” 29 U.S.C. § 1140. Here too, the
parties submit that the McDonnell Douglas analysis applies to Spencer’s
ERISA claim. The Fifth Circuit cases cited by the parties, though, did not
apply McDonnell Douglas to ERISA claims. 2 We do find one nonprecedential
opinion that did so. See Tisdale v. Woman’s Hosp., 191 F. App’x 255, 257 (5th
Cir. 2006).
It is at least clear that to establish a prima facie case under Section 510
of ERISA, a plaintiff must prove that the defendant acted with “specific
discriminatory intent.” See, e.g., Stafford v. True Temper Sports, 123 F.3d 291,
295 (5th Cir. 1997). Spencer’s complaint and his response to FEI’s motion for
summary judgment are without any argument concerning how FEI acted with
specific discriminatory intent.
On appeal, Spencer asserts for the first time that such intent “may be
shown through circumstantial evidence using the McDonnell Douglas
framework.” He did not, though, present this argument to the district court in
its consideration of FEI’s motion for summary judgment. “Although on
summary judgment the record is reviewed de novo, this court . . . will not
2See Custer v. Murphy Oil USA, Inc., 503 F.3d 415, 423 (5th Cir. 2007); Rogers v. Int’l
Marine Terminals Inc., 87 F.3d 755, 761 (5th Cir. 1996); Parker v. Cooper Tire & Rubber Co.,
546 F. App’x 522, 526 (5th Cir. 2014).
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consider evidence or arguments that were not presented to the district court
for its consideration in ruling on the motion.” Lyles v. Medtronic Sofamor
Danek, USA, Inc., 871 F.3d 305, 310 (5th Cir. 2017) (quoting Am. Family Life
Assur. Co. of Columbus v. Biles, 714 F.3d 887, 896 (5th Cir. 2013)).
Even if Spencer had presented this argument to the district court,
summary judgment on the ERISA claim would still have been warranted.
Spencer did not show that FEI’s nondiscriminatory reasons for terminating
him were pretextual. See, e.g., Stafford, 123 F.3d at 295.
III. Rule 56(d)
“We review a denial of a Rule 56(d) motion for abuse of discretion.”
McKay v. Novartis Pharm. Corp., 751 F.3d 694, 700 (5th Cir. 2014). “Rule 56(d)
motions are ‘broadly favored and should be liberally granted.’” Id. (quoting
Raby v. Livingston, 600 F.3d 552, 561 (5th Cir. 2010)). “The Rule 56(d) movant
must set forth a plausible basis for believing that specified facts, susceptible of
collection within a reasonable time frame, probably exist and indicate how the
emergent facts, if adduced, will influence the outcome of the pending summary
judgment motion.” Id. (citation and quotations omitted). “If the requesting
party ‘has not diligently pursued discovery, however, she is not entitled to
relief’ under Rule 56(d).” Id. (quoting Beattie v. Madison Cnty. Sch. Dist., 254
F.3d 595, 606 (5th Cir. 2001)).
Because Spencer was not diligent, we need not address whether he has
shown why he needed additional discovery to create a genuine issue of material
fact. Beattie, 254 F.3d at 606. From the date of filing his lawsuit, Spencer
waited for over a year to serve his first deposition subpoenas on Frost. In
addition, Spencer filed his Rule 56(d) motion over a month after FEI filed its
motion for summary judgment and less than a month before the discovery
deadline. Spencer’s lack of diligence in pursuing discovery precludes him from
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acquiring relief under Rule 56(d). See, e.g., id. The district court did not abuse
its discretion in denying Spencer’s Rule 56(d) motion.
AFFIRMED.
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