Ayissi-Etoh v. Fannie Mae ( 2014 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
MAGLOIRE K. PLACIDE AYISSI-ETOH,
Plaintiff,
v. Civil Action No. 10-1259 (JEB)
FANNIE MAE, et al.,
Defendants.
MEMORANDUM OPINION
Plaintiff Magloire K. Placide Ayissi-Etoh filed this pro se suit in 2010 against his former
employer Fannie Mae and four corporate officers for employment discrimination, hostile work
environment, retaliation, and defamation. With the case currently set for trial on September 29,
2014, the parties have been given leave to file in limine motions. Defendants now move to strike
the punitive-damage claims against the individual Defendants and to limit claims against those
Defendants to their corporate capacities. The essential question here is whether Plaintiff may
proceed against the individual Defendants in their individual capacities.
The Court ultimately holds he may not. Although it finds that Defendants have waived
their defense based on improper service of process, the Court concludes that the individual
Defendants were not given notice that they were being sued in their individual capacities. As a
result, allowing Plaintiff to proceed against them in that fashion would be highly prejudicial.
Since it would be redundant, furthermore, to retain them in their corporate capacities – as Fannie
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Mae is already a Defendant – the Court grants Defendants’ Motion and dismisses the individual
Defendants from the case.
I. Background
While the procedural history of this case is lengthy, the Court need only summarize the
facts relevant to the current Motion. On July 27, 2010, Plaintiff filed his initial Complaint
against Fannie Mae and four current and former corporate officers: CEO Michael Williams,
former chief audit executive Jacqueline K. Wagner, former vice president Thomas Cooper, and
manager Sanda Pesut. See ECF No. 1. The caption lists each of these individuals as being sued
in the capacities of their corporate positions. See Compl. at 1. In addition, in the “Parties”
section of the Complaint, Plaintiff alleges that three of the four Defendants are “in [her/his]
official capacity . . . . a necessary party for complete relief to be afforded to the Plaintiff.” Id. at
2-3. (He says nothing about the capacity of the fourth.) The caption and “Parties” section
remained unchanged in the Amended Complaint filed on September 1, 2010. See ECF No. 10 at
1, 3. The Prayer for Relief, moreover, states that the Defendant against which judgment is being
sought is “essentially Fannie Mae,” and it does not demand any specific damages from the
individual Defendants. Id. at 25. Plaintiff mailed the original Complaint and summons to each
of these individual Defendants by FedEx or UPS at their last known place of employment. Mot.
at 4-5. The documents were received by mailroom employees, and none of the individual
Defendants separately confirmed receipt of service. Id.
Soon after service, all Defendants jointly moved for summary judgment, and on
September 23, 2011, the court to whom the case was initially assigned granted judgment in their
favor. See Etoh v. Fannie Mae, 883 F. Supp. 2d 17 (D.D.C. 2011). Plaintiff appealed, and on
April 5, 2013, the decision was reversed by the D.C. Circuit, returning the case to the district
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court. See Ayissi-Etoh v. Fannie Mae, 712 F.3d 572, 581 (D.C. Cir. 2013). The prior trial judge
subsequently recused herself, and on April 28, 2014, the case was reassigned to this Court. A
trial date has been set for September 29, 2014.
On February 14, 2014, meanwhile, Plaintiff voluntarily dismissed his punitive-damage
claims against Fannie Mae upon learning that such claims were barred by 12 U.S.C § 4617. See
ECF No. 40. A status conference addressing damages subsequently uncovered a dispute among
the parties about whether Plaintiff could obtain punitive damages from – or proceed at all against
– the individual Defendants. The Court permitted briefing on the question, and Defendants have
now brought this Motion asserting that they are not proper parties in their individual capacities.
II. Analysis
Defendants’ Motion can be broken down into three distinct arguments: First, they claim
that Plaintiff has not properly served the individual Defendants. Mot. at 3-5. Second, they argue
that the individuals were only sued in their “official capacity.” Id. at 2. Third, they alternatively
contend that the claims against Defendant Williams should be dismissed on the merits. Id. at 6-7.
The Court will address the first two points. As it ultimately dismisses the claims against all
individual Defendants, the third issue is rendered moot.
A. Service of Process
For individual defendants residing in the United States, Federal Rule of Civil Procedure
4(e) authorizes three methods of service: personal delivery to the defendant, leaving the material
at the defendant’s residence, or delivery to an authorized agent. Although the rule also permits
service in accordance with state law, the District of Columbia Superior Court Rules of Civil
Procedure do not provide for any relevant additional methods. See Sup. Ct. R. Civ. P. 4. In lieu
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of service through these options, a plaintiff may also request a waiver of service from a
defendant via first class mail or other reliable means. Fed. R. Civ. P. 4(d).
There is little doubt that Plaintiff’s service of process upon the individual Defendants
through FedEx and UPS does not satisfy the formal requirements of Rule 4. The rule only
allows the use of mail when requesting a waiver of service, see Fed. R. Civ. P. 4(d), and such
waiver does not become operative without affirmative consent from the defendant. See
Cambridge Holdings Group, Inc. v. Fed. Ins. Co., 489 F.3d 1356, 1362 (D.C. Cir. 2007). There
is nothing on the record that indicates that the individual Defendants gave such consent. While
Plaintiff relies on Rule 5(b), which allows for service by mailing to a defendant’s last known
address, that rule only applies to service of papers other than the initial complaint and summons.
Plaintiff’s failure to comply with these service rules, however, does not doom his case.
The doctrine of waiver – of the issue itself, not of service – comes to his rescue. A party waives
the defenses of lack of personal jurisdiction, improper venue, insufficient process, and
insufficient service if he fails to include them in any prior motion or responsive pleading. See
Fed. R. Civ. P. 12(h)(1). Defendants have filed a prior Motion to Dismiss, or, in the Alternative,
for Summary Judgment on October 4, 2010. See ECF No. 16. They made no argument
regarding service therein. Indeed, Defendants have waited years to raise such a defense; as a
result, the Court must deem it waived.
In addition, courts have traditionally disfavored applying service requirements with
“draconian rigidity” to pro se litigants. See Smith v. U.S. 475 F. Supp. 2d 1, 10 (D.D.C. 2006).
The D.C. Circuit affirmed this policy in Moore v. Agency for Int’l Dev., 994 F.2d 874 (D.C. Cir.
1993), where it allowed a pro se plaintiff to correct his defective service in response to a motion
to dismiss. In its decision, the Moore court stated that district courts have an obligation to
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provide pro se litigants with “minimal notice” regarding the consequences of failure to comply
with procedural rules. Id. at 876. When pro se plaintiffs have not been provided with such
notice and the defendant has not been prejudiced, courts will give the plaintiff leave to correct
his procedural defects. Smith 475 F. Supp. 2d at 10. Like the litigant in Moore, Plaintiff does
not appear to have been on notice about the defects in his service and the potential for those
defects to cause the dismissal of his claims. On the contrary, he would have every reason to
believe that his service was not defective given that the individual Defendants had been
participating in the litigation – at least in their corporate capacities – without complaint for
nearly four years.
B. Capacity of Individual Defendants
Defendants’ next argument – that the named corporate officers were only sued in their
“official capacity” and not as individuals – is more persuasive. When a complaint is ambiguous,
the question of whether a defendant is being sued in his individual capacity is determined by a
“course of proceedings” test. See Brandon v. Holt, 469 U.S. 464, 469 (1985). This test
examines how the defendants have been treated during the litigation by the court and both parties
to see if there has been a common assumption about the capacity in which they have been sued.
See id. at 469. It is, however, not applicable when the complaint specifically states that the
defendant is being sued in his official capacity only. See Atchinson v. District of Columbia, 73
F.3d 418, 425 (D.C. Cir. 1996). Although courts do apply “less stringent standards” when
interpreting the complaints of pro se litigants, Haines v. Kerner, 404 U.S. 519, 520-521 (1972),
these complaints must still satisfy the minimum legal standard of giving the adverse party “fair
notice of what Plaintiff’s claim is and the grounds upon which it rests.” Swierkiewicz v. Sorema
N.A., 534 U.S. 506, 507 (2002). As the Sixth Circuit has noted, “It is not too much to ask that if
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a person or entity is to be subject to suit, the person or entity should be properly named and
clearly notified of the potential for payment of damages individually.” Wells v. Brown, 891 F.2d
591, 593 (6th Cir. 1989), quoted in Atchinson, 73 F.3d at 426.
An examination of Plaintiff’s Complaint and Amended Complaint leads to the
inescapable conclusion that “fair notice” was lacking in this case. As previously noted, the
caption and the list of parties explicitly state that Defendants are being sued in their official
capacities – e.g., “in his capacity of Chief Executive Officer of Fannie Mae” – and not as
individuals. See Am. Compl. at 1, 3-4. The Prayer for Relief, moreover, states that the
Defendant from whom relief is sought is “essentially Fannie Mae” and does not specifically
demand relief from any of the individual Defendants. Id. at 25.
Plaintiff’s attempt to proceed against Defendants in their individual capacities would,
therefore, be equivalent to an attempt to amend his Complaint to add individual-capacity claims.
Such an amendment would be barred by the four-year statute of limitations for 42 U.S.C § 1981
actions. See Uzoukwu v. Metro. Wash. Council of Gov’ts, 2013 WL 5425128, at *9 (D.D.C.
2013). The Court, therefore, could only grant Plaintiff leave to amend through the relation-back
provision of Rule 15(c). An amendment made outside of the statute of limitations that adds new
parties can “relate back” to the date of the original pleading when (1) the new claim arises from
the same transaction or occurrence, and (2) the new party, within 120 days of filing, received
notice of the action and became or should have become aware that it would have been sued if not
for Plaintiff’s mistake. See Fed. R. Civ. P. 15(c)(1)(C). In practice, courts have refined the
inquiry to take into account prejudice to the defendant by determining whether the amendment
would be “prejudicial [or] a surprise to the misnamed party.” Rendall-Speranza v. Nassim, 107
F.3d 913, 918 (D.C. Cir. 1997).
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While there is no direct evidence regarding the individual Defendants’ state of mind,
whether notice exists for the purpose of Rule 15(c)(1)(C) can be inferred from the factual
circumstances of the case. See Gipson v. Wells Fargo Corp., 382 F. Supp. 2d 116, 120 (D.D.C.
2005). The circumstances here strongly support an inference that the individual Defendants did
not have notice. As discussed above, the Complaint explicitly stated that the individual
Defendants were only being sued as officers of Fannie Mae. See Am. Compl. at 1, 3. The
improper service on the individuals also reduces the likelihood of notice. Finally, the fact that
they did not retain separate counsel and consented to be represented by Fannie Mae’s corporate
counsel (despite potentially conflicting defenses) strongly indicates that they believed the
litigation was, in truth, against Fannie Mae alone. As a result, adding them as parties with the
potential of punitive damages at this very late stage would be highly prejudicial.
C. Redundancy of Claims in Official Capacity
As the individual Defendants are only being sued in their official capacities, the claims
against them are redundant and should be dismissed entirely. “[A]n official-capacity suit is, in
all respects other than name, to be treated as a suit against the entity.” Kentucky v. Graham, 473
U.S. 159, 166 (1985). The Court may, therefore, consolidate official-capacity claims with claims
against the entity in order to prevent redundancy and avoid “confus[ion] to the jury.” Busby v.
City of Orlando, 931 F.2d 764, 776 (11th Cir. 1991); see also Grissom v. District of Columbia,
853 F. Supp. 2d 118, 125 (D.D.C. 2012) (“Based upon the understanding that it is duplicative to
name both a government entity and its employees in their official capacity, courts routinely
dismiss claims against the officials to conserve judicial resources when the entity itself is also
sued.”) (internal quotation marks and citation omitted).
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Although the holding of Graham was limited to government officials, the Court sees no
basis to reach a different outcome here. Cf. McCarthy v. Azure, 22 F.3d 351, 359 (1st Cir. 1994)
(discussing Graham in context of individual-capacity suit against corporate officer). Official-
capacity claims do not grant Plaintiff access to any relief that would be unavailable from suing
only Fannie Mae, and they needlessly increase the complexity of the case. Dismissing the
redundant individual Defendants and focusing the inquiry on Fannie Mae would benefit both
sides by streamlining the litigation and preventing any potential confusion of the jury.
D. Procedural Challenges
Plaintiff raises two procedural challenges to the Motion to Dismiss: (1) Defendants failed
to discuss the Motion with him prior to filing, as required by Local Civil Rule 7(m), and (2) they
failed to properly serve it. Neither argument holds water.
First, Rule 7(m) does not apply to dispositive motions, and this Motion is dispositive, as
it seeks to dismiss all claims against the individual Defendants. Second, the Motion was filed
electronically through the CM/ECF system, and electronic filing of papers constitutes service for
pro se parties who have obtained CM/ECF passwords. See LCvR 5.4(d)(1). The Court granted
Plaintiff a CM/ECF password on September 1, 2010. See Order, Sept. 1, 2010.
III. Conclusion
The Court, therefore, will grant the Individual Defendants’ Motion to Dismiss. A
separate Order consistent with this Opinion will issue this day.
/s/ James E. Boasberg
JAMES E. BOASBERG
United States District Judge
Date: June 17, 2014
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