Lopez v. Council on American-Islamic Relations Action Network, Inc. , 826 F.3d 492 ( 2016 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 12, 2016 Decided June 21, 2016
No. 15-7016
RENE ARTURO LOPEZ, ET AL.,
APPELLANTS
v.
COUNCIL ON AMERICAN-ISLAMIC RELATIONS ACTION
NETWORK, INC.,
APPELLEE
Consolidated with 15-7019
Appeals from the United States District Court
for the District of Columbia
(No. 1:10-cv-00023)
(No. 1:10-cv-00022)
David Yerushalmi argued the cause for Appellants. With
him on the briefs was Robert Joseph Muise.
Jenifer Wicks argued the cause and filed the brief for
Appellee.
Before: SRINIVASAN and WILKINS, Circuit Judges, and
GINSBURG, Senior Circuit Judge.
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Opinion for the Court filed by Circuit Judge WILKINS.
This appeal arises out of the bad acts of Morris Days
(a/k/a Jamil Days), who held himself out to the public as a
civil rights attorney working for a regional chapter of the
Council on American-Islamic Relations Action Network
(“CAIR” or “CAIR National”), when he was not, in fact, a
lawyer. The Maryland/Virginia regional CAIR chapter had
hired Days to serve as its civil rights manager, and eventually
Days also took up the role of resident attorney. Days took
money from CAIR clients in exchange for the promise of
legal services, but performed none. Plaintiff-Appellants in
this consolidated action are individual CAIR clients who were
negatively impacted by Days’s conduct. Their lawsuits
allege, inter alia, that CAIR is responsible for the bad acts of
Days because Days was CAIR’s agent. The District Court
disagreed and granted summary judgment to CAIR National.
This Court has jurisdiction to review the final decision of
the District Court under 28 U.S.C. § 1291. For the reasons set
forth below, we reverse the District Court’s grant of summary
judgment, and remand for further proceedings.
I.
CAIR is a national organization based in Washington,
D.C. that works to protect the civil rights of Muslims living in
the United States. This work sometimes involves providing
legal services. The organization has affiliated local and
regional chapter offices, which exist as independent non-
profits. Local chapters come into being through a written
application process, submitted to the national headquarters,
through which CAIR can either grant or deny affiliation. The
regional chapter serving Maryland and Virginia was granted
approval by the national organization in 2002. Its operations
were initially based in Bethesda, Maryland, but eventually
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moved to Herndon, Virginia. The chapter has been
alternately referred to in the public as CAIR-MD/VA or
CAIR-VA.
During the relevant time period, CAIR-VA’s day-to-day
operations were supervised by Khalid Iqbal, the chapter’s
executive director and an employee of CAIR National. Iqbal
was the director of operations for CAIR National, which paid
his salary, but served simultaneously as the executive director
of the regional chapter at CAIR-VA, on a volunteer basis.
Because CAIR National paid Iqbal’s salary, Iqbal was
considered a sort of in-kind donation from the national
organization to the chapter.
Morris Days began working as a volunteer at CAIR-VA
in approximately June 2006. After volunteering for some
time, Days approached Iqbal seeking full-time employment
by the chapter. Iqbal recommended to the CAIR-VA Board
that they hire Days, and in January 2007, Days began working
as an independent contractor for CAIR-VA’s Civil Rights
Department, as civil rights manager. Iqbal was Days’s
immediate supervisor.
Days was initially hired to perform non-legal advocacy
for clients who alleged that they faced religious
discrimination; this work included making phone calls,
writing letters, and referring clients to attorneys when
appropriate. It did not require Days to hold a law degree or a
license to practice law. Yet, as time passed, Days started to
misrepresent to CAIR, to the public, and to his CAIR-VA
clients, that he was an attorney and was licensed to practice
law. Days then began requesting and accepting fees for the
legal services he claimed to be performing – despite CAIR-
VA’s policy not to take money from its civil rights clients.
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Days later admitted that he used this money for his personal
enrichment.
Iqbal first learned that Days was violating the
organization’s policy against accepting money from CAIR-
VA clients in July 2007, when he received a complaint that
Days had accepted money for a client’s immigration case, but
then had been non-responsive to the client. Iqbal sent an
email to Days, seeking an explanation and asking Days to
help develop a policy going forward for taking on cases. On
or around October or November 2007, Iqbal learned that Days
had again taken money from a CAIR-VA client. Following
this discovery, Iqbal confronted Days and instructed him to
return the money. Iqbal conducted no other investigation into
Days’s misconduct at that time.
Despite Iqbal’s prior warnings to Days not to take money
from clients, around January 2008, Iqbal discovered that Days
had again received funds from an individual who had come to
CAIR-VA for legal assistance. Iqbal again confronted Days,
again instructed Days not to accept money from clients, and
gave Days a written warning. But the very next week, in
early February 2008, Iqbal received a report that Days had
solicited funds from yet another individual. Following this
discovery, Days was barred from entering the CAIR-VA
office, his office keys were taken from him, and he was
informed that his relationship with CAIR was terminated
effective immediately.
It was only after Days was fired that CAIR started to
inquire regarding his status as an attorney. After discovering
that Days was not a lawyer, CAIR took possession of CAIR-
VA’s civil rights case files, as CAIR-VA no longer had
anyone that could handle the matters. CAIR had its own
personnel review the files. Once CAIR National’s staff had
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reviewed all of the files, Iqbal then informed the individuals
with open cases that Days was no longer with CAIR-VA, and
recommended attorneys with whom those individuals could
consult regarding their cases.
At various times during Days’s employment at CAIR-
VA, each of the Plaintiffs approached Days in search of legal
counsel. Unsurprisingly, Days did not perform the legal work
promised. Plaintiffs allege that they have suffered financial
loss and emotional distress as a result of this action. CAIR
filed a motion for summary judgment, and Plaintiffs opposed,
asking the court to treat their filing as a de facto cross-motion
for summary judgment pursuant to Federal Rule of Civil
Procedure 56(f). The District Court granted CAIR’s motion
for summary judgment and denied Plaintiffs’ cross-motion,
holding that the Plaintiffs had failed to raise a genuine issue
of material fact regarding whether Days was the agent of
CAIR National.
II.
We review the District Court’s grant of summary
judgment de novo. Holcomb v. Powell, 433 F.3d 889, 895
(D.C. Cir. 2006). Summary judgment is appropriately granted
when, viewing the evidence in the light most favorable to the
non-movants and drawing all reasonable inferences
accordingly, no reasonable jury could reach a verdict in their
favor. See Carter v. George Washington Univ., 387 F.3d 872,
878 (D.C. Cir. 2004). The evidence presented must show
“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); see also Holcomb, 433 F.3d at 895. “[T]he
mere existence of some alleged factual dispute between the
parties will not defeat an otherwise properly supported motion
for summary judgment; the requirement is that there be no
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genuine issue of material fact.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original).
“[M]ateriality is only a criterion for categorizing factual
disputes in their relation to the legal elements of the claim and
not a criterion for evaluating the evidentiary underpinnings of
those disputes.” Id. at 248. “Only disputes over facts that
might affect the outcome of the suit under the governing law
will properly preclude the entry of summary judgment.
Factual disputes that are irrelevant or unnecessary will not be
counted.” Id.
In conducting our analysis, we review the record taken as
a whole. “Where the record taken as a whole could not lead a
rational trier of fact to find for the non-moving party, there is
no genuine issue for trial.” Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quotation
marks omitted). “We are not to make credibility
determinations or weigh the evidence.” Holcomb, 433 F.3d at
895; see Liberty Lobby, 477 U.S. at 249 (“[A]t the summary
judgment stage the judge’s function is not himself to weigh
the evidence and determine the truth of the matter but to
determine whether there is a genuine issue for trial.”).
III.
As the District Court held below, Virginia law applies to
the Plaintiffs’ tort claims. See Lopez v. Council on American-
Islamic Relations Action Network, Inc., 741 F. Supp. 2d 222,
235 (D.D.C. 2010). In Virginia, an agency relationship may
be established by one of two theories: (1) actual agency; or
(2) apparent or ostensible agency. See Wynn’s Extended
Care, Inc. v. Bradley, 619 F. App’x 216, 218 (4th Cir. 2015).
The Plaintiffs are only pursuing their claim under a theory of
actual agency. Accordingly, we must determine if the
Plaintiffs have raised a genuine issue of material fact as to
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whether an actual agency relationship existed between Days
and CAIR National.
Actual agency is established when one person (the
principal) manifests consent to another person (the agent),
that the agent “shall act on his behalf and subject to his
control,” and the agent likewise manifests “consent so to act.”
Reistroffer v. Person, 439 S.E.2d 376, 378 (Va. 1994); accord
Wynn’s Extended Care, 619 F. App’x at 218. “The question
of agency vel non is one of fact for the fact finder unless the
existence of an agency relationship depends upon
unambiguous written documents or undisputed facts.”
Reistroffer, 439 S.E.2d at 378; cf. Ashland Facility
Operations, LLC v. NLRB, 701 F.3d 983, 990 (4th Cir. 2012)
(“Generally, whether an agency relationship exists is a factual
determination.”).
Plaintiffs point to a number of facts that they believe
support a reasonable inference that Days was CAIR’s agent.
To begin with, Plaintiffs have asserted that Days manifested
consent to serve as CAIR’s agent by expressly stating to them
that he was an attorney for CAIR, not just for CAIR-VA.
Taking the evidence in the light most favorable to the
Plaintiffs, there is no reason not to take this as true; indeed,
CAIR does not challenge whether Days manifested his
consent to serve as CAIR’s agent. The question then remains
to what extent, if any, CAIR National manifested its consent
that Days was to act on CAIR’s behalf, and subject to CAIR’s
control. See Reistroffer, 439 S.E.2d at 378. While such
manifestation may be made directly or indirectly, it
nonetheless must be made by the principal to the agent. The
Plaintiffs have presented sufficient evidence in this case to
raise a genuine issue of material fact as to whether CAIR
National manifested its consent to Days that he was to act on
CAIR’s behalf, and subject to CAIR’s control.
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A.
The manifestation of assent to action by the agent with
legal consequences for the principal “may be made directly by
the principal to the agent or may reach the agent through a
more circuitous route.” RESTATEMENT (THIRD) OF AGENCY
§ 3.01 cmt. b (AM. LAW INST. 2006). “A person manifests
assent or intention through written or spoken words or other
conduct.” Id. § 1.03. Where there is no direct evidence of an
agency relationship, circumstantial evidence may be relied
upon. See Acordia of Va. Ins. Agency, Inc. v. Genito Glenn,
L.P., 560 S.E.2d 246, 250 (Va. 2002) (“[D]irect evidence is
not indispensable—indeed frequently is not available—but
instead circumstances may be relied on, such as the relation of
the parties to each other and their conduct with reference to
the subject matter of the contract.” (quotation marks
omitted)). Precisely what evidence will be sufficient to
establish agency in a given case “must be determined in view
of the facts in each particular case.” Id. (quotation marks
omitted). Plaintiffs have presented sufficient evidence that,
viewed together, could provide a reasonable basis for a jury to
conclude that CAIR National had manifested its consent for
Days to act on its behalf, specifically: (1) CAIR’s web
publications relating to Mr. Days; (2) CAIR’s handling of
Days’s case files both before and after discovering the full
extent of his fraud; and (3) CAIR’s statements regarding the
organization’s decision to provide financial settlements to
some of the affected individuals.
First, Plaintiffs point to news articles that CAIR
publicized on its website relating to Days’s work, which refer
to Days as a CAIR lawyer. Notwithstanding that these
articles were published after Days started working for CAIR,
and after the Plaintiffs initiated their individual relationships
with Days, Plaintiffs contend that this is corroborating
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evidence indicating CAIR’s earlier manifestation of consent.
Plaintiffs also argue that CAIR’s intent can be inferred from
the fact that Days showed them other publications by CAIR,
similarly lauding Days as a CAIR attorney. Such publications
could certainly support an inference that CAIR National had,
at some point, made a decision to advertise the work that
Days was doing, thereby associating CAIR National with
Days and his work. Viewing the evidence in the light most
favorable to the Plaintiffs, this is not an unreasonable
inference.
It would also not be unreasonable to conclude that CAIR
National manifested consent for Days to act on its behalf
based on CAIR’s conduct with respect to the civil rights cases
opened and handled by the CAIR-VA chapter. Information
regarding all of the CAIR-VA cases that Days worked on was
entered into a central database, which was maintained by
CAIR National. One could infer that, because CAIR tracked
the status of cases handled by its affiliates, the national
organization had some stake in the outcomes of those cases.
In other words, the successes or failures of CAIR-VA
reflected in some meaningful way upon CAIR National.
Further substantiating such a view is the fact that CAIR took
possession of all of the client files that belonged to CAIR-VA
after the chapter was dissolved, and had its own personnel go
through and review the files. A jury could reasonably view
these facts as supporting the conclusion that CAIR had
manifested its consent for Days to act on its behalf, and
considered the work that Days did on behalf of CAIR-VA as
an extension of the work of CAIR National.
Finally, Plaintiffs argue that CAIR National’s consent to
have Days act on its behalf is evidenced by the fact that CAIR
compensated some of the victims of Days’s fraud. As
CAIR’s corporate designee testified, CAIR paid settlement
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money to some of Days’s clients because the organization
was “trying to right a wrong that was done by one of our
employees.” J.A. 1287-88. Whether or not Days was
technically an employee or an independent contractor for
CAIR-VA, this testimony is evidence that a reasonable jury
could rely on in concluding that CAIR National did, in fact,
view Days as acting on the organization’s behalf.
B.
Plaintiffs have also presented evidence that a reasonable
jury could rely on to conclude that CAIR National maintained
the power to control Days, and Days was thus CAIR’s agent.
The power to control is a critical factor in determining
whether an actual agency relationship exists under Virginia
law. See Wynn’s Extended Care, 619 F. App’x at 218 (“In
deciding whether an actual agency exists, ‘the power of the
alleged principal to control is the determining factor in
ascertaining the alleged agent’s status.’” (quoting Allen v.
Lindstrom, 379 S.E.2d 450, 454 (Va. 1989) (brackets
omitted)); see also Reistroffer, 439 S.E.2d at 378 (power of
control is an important factor).
The element of control in this context refers to the “right
to control the methods or details of doing the work, not
control of the results.” Wells v. Whitaker, 151 S.E.2d 422,
429 (Va. 1966); accord Murphy v. Holiday Inns, Inc., 219
S.E.2d 874, 877 (Va. 1975). “Actual control . . . is not the
test; it is the right to control which is determinative.” Perry v.
Scruggs, 17 F. App’x 81, 89 (4th Cir. 2001) (quotation marks
omitted)). From an operational standpoint, it would not be
unreasonable for a jury to conclude that CAIR National had
the right to control the methods or details of Days’s work.
Upon being hired by CAIR-VA, Days participated in several
training sessions on how to handle civil rights cases, including
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one session held at CAIR National and a number of one-on-
one follow-up sessions with Iqbal. And, as discussed above,
all of the CAIR-VA civil rights cases that Days worked on
were tracked by the national organization via CAIR
National’s central database. Finally, the role of Khalid Iqbal,
who supervised Days while wearing two hats – one as CAIR
National’s operations director, and one as CAIR-VA’s
executive director – raises genuine questions about the extent
to which CAIR National maintained or exerted control over
Days.
Specifically, Iqbal’s conduct upon discovering Days’s
misconduct provides evidence upon which a reasonable jury
could conclude that CAIR National exerted control over
Days. Notably, when Iqbal sought information from Days via
email following the first accusation of misconduct, Iqbal used
his CAIR title and contact information in his signature despite
sending the email from his CAIR-VA account. It would not be
unreasonable to infer from this evidence that Iqbal disciplined
Days in his capacity as director of operations for CAIR
National, and therefore that CAIR National both had the
power to exercise control over Days and in fact exercised that
power. Additionally, Iqbal exchanged emails with other
CAIR National employees about how to address Days’s
misconduct. For example, Iqbal sought the CAIR National
Director’s input and waited for her approval before sending a
letter to Days. A jury could infer from these emails that
Iqbal’s supervisors at CAIR National oversaw his
management of Days.
And finally, CAIR National’s handling of Days’s client
files after the exposure of his fraud is evidence that a
reasonable jury could rely on in concluding that CAIR had
control over Days. CAIR took possession of the CAIR-VA
client files, and had its own personnel review those files
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without first contacting the clients for permission to do so –
conduct that would have constituted a breach of ethical duties
unless CAIR National previously had the power to control
Days’s conduct with respect to those cases.
Viewing the evidence in the light most favorable to the
Plaintiffs, and drawing all inferences in their favor, it would
be reasonable to infer based on these facts, taken together,
that CAIR National had the ability to control Days, and in fact
exerted that control.
IV.
For the foregoing reasons, we find that genuine issues of
material fact exist as to whether or not Morris Days was the
agent of CAIR National. We reverse the judgment of the
District Court and remand for further proceedings.
So ordered.