Rzepiennik v. Archstone Smith, Inc.

FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
June 1, 2009
FOR THE TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
W. MICHAEL RZEPIENNIK,
Plaintiff-Appellant,
v. No. 08-1129
(D.C. No. 1:07-CV-1243-MJW-MEH)
ARCHSTONE-SMITH, INC., (D. Colo.)
Defendant-Appellee.
ORDER AND JUDGMENT *
Before O’BRIEN, Circuit Judge, BRORBY, Senior Circuit Judge, and
McCONNELL, Circuit Judge.
On August 28, 2002, defendant Archstone Smith, Inc. (“Archstone”)
terminated plaintiff W. Michael Rzepiennik’s employment. On June 13, 2007, he
brought this action against Archstone, asserting a claim pursuant to the employee
protection provisions of the Sarbanes-Oxley Act, 18 U.S.C. § 1514A (“SOX
claim”), as well as a state law claim for breach of contract. The district court
*
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
dismissed his complaint and the entire action with prejudice, finding that both his
claims were time-barred. We affirm.
BACKGROUND
In his complaint, Rzepiennik alleged the following facts. Archstone is in
the business of apartment investment and operations. It owns and operates a
portfolio of apartment communities in various American cities. Archstone hired
Rzepiennik in May 1998 as a Production Officer. In December 2000, he was
promoted to Vice President of Production, the position he held at the time of his
termination. His duties required him “to review and approve all general
contractors’ payment requisitions and to ensure compliance with contracts
between [Archstone] and contractors.” Aplt. App. at 8.
Archstone does not construct the real estate developments it undertakes. It
contracts instead with third party builders to perform the actual construction.
These contractors in turn hire subcontractors to perform specified tasks. It was
part of Rzepiennik’s job to ensure that these subcontractors released any statutory
lien rights they might have had under state law for unpaid work, so that clear title
could be conveyed to the newly constructed properties. He was also required to
verify that contractors complied with cost and timeliness requirements of their
contracts with Archstone. Rzepiennik contends this supervision of financial
transactions constituted part of the internal controls Archstone was required by
the Sarbanes-Oxley Act to maintain.
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In the Spring of 2002, Rzepiennik began reporting to his supervisors what
he viewed as significant irregularities involving lien waivers and other
transactions with one of Archstone’s contractors. On August 28, 2002, Archstone
terminated his employment. After his termination, it continued to investigate his
allegations of fraud.
Rzepiennik met with various Archstone audit and human resources
personnel on August 20, 2003, to discuss the results of the investigation of his
charges. On that same day, Archstone’s counsel sent him a letter offering an
incentive bonus payment of $255,589 for his work on one of the projects involved
in his fraud allegations. The offer was conditioned on his agreement: 1) not to
disclose to any person or regulatory agency the facts about the alleged fraud or
Archstone’s investigation, and 2) to return to Archstone all documents and copies
he possessed relating to his allegations.
The letter gave Rzepiennik 21 days from its receipt to accept its terms and
sign a global release of all his claims in order to receive the bonus payment. On
September 12, 2003, he returned to Archstone’s offices and attempted to negotiate
the terms of the offer. On that day an Archstone representative notified him it
would only adhere to the terms and conditions contained in the offer.
Rzepiennik’s complaint further recites that:
Within 90 days of the expiration of [Archstone’s] offer and
conditions, Plaintiff filed this action by letter with the Occupational
Safety and Health Administration (OSHA) of the U.S. Department of
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Labor. OSHA marked as received this complaint on December 15,
2003.
Id. at 27.
Rzepiennik obtained a hearing before an administrative law judge (ALJ),
who issued a decision finding his administrative complaint untimely. He then
sought review with the Administrative Review Board (ARB), see 29 C.F.R.
§ 1980.110, and subsequently elected to proceed de novo in district court after
180 days lapsed from the time of filing his complaint without a final ARB
decision, see id. § 1980.114. See also 18 U.S.C. § 1514A(b)(1)(B) (if the
Secretary of Labor “has not issued a final decision within 180 days of the filing
of the [administrative] complaint . . . [an employee may bring] an action . . . for
de novo review in the appropriate district court of the United States.”).
Rzepiennik included no exhibits with the complaint he filed with the
district court. Archstone attached to its motion to dismiss a number of exhibits
allegedly referred to in the complaint. These included a file-stamped copy of the
first two pages of Rzepiennik’s administrative complaint. Aplt. App. at 48-49.
That exhibit bears two file stamps: the first simply states “RECEIVED Dec 15
2003,” while the second is marked “U.S. DEPT. OF LABOR–OSHA REGIONAL
OFFICE 03 DEC 24 AM 11:35 PHILADELPHIA, PA.” Id. at 48.
Based on these file stamps, as well as the representation in Rzepiennik’s
complaint — that OSHA received his administrative complaint on December 15,
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2003 — Archstone moved to dismiss the SOX claim as untimely. It cited a
provision of SOX requiring such a claim to be filed with the Secretary of Labor
“not later than 90 days after the date on which the violation occurs.” 18 U.S.C.
§ 1514A(b)(2)(D). 1 The district court concluded, even using the earlier December
15, 2003, file-stamp date, Rzepiennik had not timely filed his SOX claim with the
Secretary of Labor. The adverse action, triggering the beginning of the 90-day
filing period, it reasoned, occurred when Rzepiennik received Archstone’s bonus
offer, not when the offer expired or when Archstone refused to negotiate the
offer’s terms. 2 Rzepiennik’s SOX claim was dismissed for failure to timely
pursue administrative action.
Archstone also attached to its motion to dismiss a copy of the Development
Incentive Plan, under which Archstone claimed it had offered to pay Rzepiennik
a bonus. This Plan document said bonuses would be payable “by February 15
following the calendar year for which they are attributable.” Aplt. App. at 136.
According to its terms the plan is governed by Maryland law, without regard to
the conflict of law provisions of any state. Id. at 137. Maryland law provides for
1
The Secretary of Labor has delegated the duty of receiving whistleblower
complaints under SOX to OSHA. See 29 C.F.R. § 1980.103(c); Secretary’s Order
5-2002, 67 FR 65008, 2002 WL 31358967 (Oct. 22, 2002).
2
Rzepiennik’s complaint made no reference to the outcome of his OSHA
complaint. Archstone attached to its motion to dismiss a copy of a Department of
Labor decision dated February 23, 2007, dismissing the claim for untimeliness.
Aplt. App. at 53-76. The district court, conducting a de novo review, did not
directly rely on this OSHA decision. Neither do we.
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a general three-year statute of limitations for civil actions. Archstone claimed the
state law contract claim was untimely under Maryland law.
Rzepiennik contended the Plan document attached to the motion to dismiss
could not be relied upon because it was accompanied by a memorandum
indicating it was a “draft.” Id. at 78. The district court considered an affidavit
from Archstone’s president to which he attached a “true and correct copy of the
Plan in place for calendar year 2002” which, he averred, was “the only
Development Incentive Plan administered . . . for the benefit of [Archstone’s
employees].” Id. at 130-31.
In view of that affidavit Rzepiennik conceded he had no basis on which to
challenge the authenticity of the Plan document or its applicability for calendar
year 2002. He argued, however, that dismissal was inappropriate because
Archstone may have had discretion to pay a bonus outside of the Plan’s formal
terms and may have used that discretion to punish him by withdrawing its offer to
pay him a bonus when he did not agree to conceal Archstone’s alleged fraud.
The district court determined Maryland’s three-year statute of limitations
applied, and it ran three years from either (a) February 15, 2003, the bonus payout
date, or (b) August 20, 2003, the date of the settlement offer. In either event the
breach of contract claim in Rzepiennik’s complaint was untimely.
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ANALYSIS
1. SOX Claim
We review de novo the district court’s timeliness determination and
Rzepiennik’s resulting failure to exhaust his administrative remedies. Harms v.
I.R.S., 321 F.3d 1001, 1009 (10th Cir. 2003). Rzepiennik claims the district
court’s timeliness decision was inappropriate on a motion to dismiss, because
(1) he had no duty under Fed. R. Civ. P. 8(a) to plead timely filing of his
administrative complaint, and (2) unresolved factual issues exist that cannot be
resolved on a motion to dismiss.
We may dispense quickly with these initial contentions. The SOX claim
was not dismissed because Rzepiennik failed to allege compliance with the DOL’s
filing requirements. It was dismissed because what he did allege, together with
the documents Archstone properly supplied, unequivocally demonstrated the
untimely filing. See Jones v. Bock, 549 U.S. 199, 215 (2007) (“A complaint is
subject to dismissal for failure to state a claim if the allegations, taken as true,
show the plaintiff is not entitled to relief. If the allegations, for example, show
that relief is barred by the applicable statute of limitations, the complaint is
subject to dismissal for failure to state a claim; that does not make the statute of
limitations any less an affirmative defense.”).
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The district court was entitled to consider both the language of the
complaint and the attachments referred to in the complaint and submitted by
Archstone with its motion to dismiss.
[I]f a plaintiff does not incorporate by reference or attach a document
to its complaint, but the document is referred to in the complaint and
is central to the plaintiff’s claim, a defendant may submit an
indisputably authentic copy to the court to be considered on a motion
to dismiss.
GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384
(10th Cir. 1997).
If the rule were otherwise, a plaintiff with a deficient claim could
survive a motion to dismiss simply by not attaching a dispositive
document upon which the plaintiff relied. Moreover, conversion to
summary judgment when a district court considers outside materials
is to afford the plaintiff an opportunity to respond in kind. When a
complaint refers to a document and the document is central to the
plaintiff’s claim, the plaintiff is obviously on notice of the
document’s contents, and this rationale for conversion to summary
judgment dissipates.
Id. at 1385.
The district court found the administrative complaint submitted by
Archstone to be both central to Rzepiennik’s claim and indisputably authentic.
Rzepiennik provides no reason to overturn these conclusions.
We now turn to the substance of the timeliness inquiry. As noted, SOX
requires a claim to be filed with the Secretary of Labor “not later than 90 days
after the date on which the violation occurs.” 18 U.S.C. § 1514A(b)(2)(D).
In consulting the complaint and the documents submitted, we must therefore
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answer two questions: (1) when did the alleged SOX violation occur? and
(2) how long after that date did Rzepiennik file his administrative complaint?
A. Date of SOX Violation
Under federal discrimination statutes, the time for filing an administrative
charge of employment discrimination begins running when a discrete unlawful
practice takes place. Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618,
628 (2007). 3 See also Nat’l RR Passenger Corp. v. Morgan, 536 U.S. 101, 114
(2002). 4 A discrete adverse action “takes place” when a decision is made and
3
In response to Ledbetter, Congress passed the “Lilly Ledbetter Fair Pay Act
of 2009,” Pub. L. No. 111-2, § 3, 123 Stat. 5. The Act amends Title VII with
respect to the date of occurrence of discriminatory compensation claims, stating
that
an unlawful employment practice occurs, with respect to
discrimination in compensation in violation of this title, when a
discriminatory compensation decision or other practice is adopted,
when an individual becomes subject to a discriminatory
compensation decision or other practice, or when an individual is
affected by application of a discriminatory compensation decision or
other practice, including each time wages, benefits, or other
compensation is paid, resulting in whole or in part from such a
decision or other practice.
42 U.S.C. § 2000e-5(e)(3)(A) (2009). There is no indication in the new law
that Congress intended this change to affect retaliation claims such as
Rzepiennik’s SOX claim. Cf. Stewart v. Gen. Mills, Inc., ___F. Supp. 2d___,
No. 08-CV-16-LRR, 2009 WL 350639, at *9 n.2 (N.D. Iowa Feb. 11, 2009)
(rejecting application of Lilly Ledbetter Act in analyzing timeliness of filing
Title VII discrimination and retaliation suit after right to sue letter was received).
4
The charge filing provisions of the Sarbanes-Oxley Act and Title VII
contain very similar language. Both statutes use the terms “shall” to set forth the
(continued...)
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communicated to the plaintiff, even if the effects of the action do not occur until
later. Del. State Coll. v. Ricks, 449 U.S. 250, 258 (1980). See also 29 C.F.R.
§ 1980.103(d) (a SOX violation occurs “when the discriminatory decision has
been both made and communicated to the complainant.”).
Rzepiennik’s complaint refers to Archstone’s August 20, 2003, letter
offering to pay him a bonus, conditioned on 1) his promise not to disclose the
underlying facts concerning the alleged fraud, and 2) his delivery to Archstone of
all documents and copies in his possession reflecting the alleged fraud. The
district court concluded the letter made and communicated Archstone’s adverse
decision to Rzepiennik and triggered the 90-day time period.
Rzepiennik, however, argues the adverse action occurred later, for two
reasons. First, he contends, the adverse action occurred when the 21-day period
given to him to accept the offer expired. Second, he argues, the adverse action
occurred when Archstone rejected his attempts to negotiate the terms of the
letter agreement.
The district court correctly held that these later events did not extend the
time period for filing an administrative complaint. The fact that the offer
4
(...continued)
timing of an action’s commencement. Section 1514A(b)(2)(D) states: “an
action . . . shall be commenced not later than 90 days after the date on which the
violation occurs.” This is similar to language, contained in 42 U.S.C.
§ 2000e-5(e)(1), which refers to a filing “after the alleged unlawful employment
practice occurred.”
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contained a 21-day acceptance period did not extend the time period. Rzepiennik
knew or should have known that Archstone had placed improper conditions on his
receipt of the bonus at the time he received the proposed agreement. The
subsequent expiration of Archstone’s offer was a consequence of Rzepiennik’s
decision not to accept its terms. It was not a new, actionable instance of
retaliation. Cf. Brown v. Unified Sch. Dist. 501, 465 F.3d 1184, 1186-87
(10th Cir. 2006) (where plaintiff failed to offer factual basis for asserting that
letter “simply restat[ing] the school district’s unconditional decision” not to rehire
him “reflected an independent act of discrimination/retaliation in hiring,” letter
could not be used to revive time period for filing discrimination charge).
Rzepiennik argues, however, that the conditions of the offer were too
technical and legalistic to have “made and communicated” the decision to offer
him a conditional bonus at the time he received the offer. Ricks, 449 U.S. at 258.
We reject this argument for the same reason the district court did:
[C]lear notice was given that the offered bonus would not be paid
absent [Rzepiennik’s] agreement to the terms set forth. The
employment action and the consequences were easy to identify. The
result, albeit delayed, was an inevitable consequence of
[Rzepiennik’s] failure to sign the agreement.
Aplt. App. at 157.
Rzepiennik also argues it would contravene the Age Discrimination in
Employment Act of 1967 (ADEA) to count that statute’s 21-day consideration
period as part of the 90-day SOX filing period. The ADEA prevents an effective
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waiver of any right under its provisions unless, among other things, “the
individual is given a period of at least 21 days within which to consider the
agreement.” 29 U.S.C. § 626(f)(1)(F)(i). That strikes us as a dubious argument
because the critical issue is notice of the violation (an improper offer), not
acceptance and participation in it. In any event Rzepiennik has made no effort to
show how including the 21-day consideration period within the 90-day filing
window impaired his ability to timely invoke the SOX protections available
to him.
We also reject Rzepiennik’s argument that the time for filing ran from
September 12, 2003, the day he met with an Archstone representative and
attempted to negotiate the terms of the letter agreement. Rzepiennik’s attempt to
negotiate the terms of the agreement on September 12, 2003, could conceivably
have extended the adverse action date, but only if Archstone had engaged in
negotiations and thereby, expressly or impliedly, indicated that a final
(actionable) decision had not yet been made. But that is not the factual scenario
plead in his complaint, which claims Archstone “informed the Plaintiff that [it]
would adhere only to its terms and conditions that were in the offer.” Id.Archstone did not withdraw, amend or extend its settlement offer; the offer
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expired on its own terms because Rzepiennik did not accept it. 5 Under basic
principles of contract law, Rzepiennik’s unilateral action in attempting to
negotiate the terms of Archstone’s offer could not modify or extend those terms;
it could at most only communicate a counter-offer. See Restatement (Second) of
Contracts §§ 39, 59 (1981). But he made no counter-offer, only an overture to
negotiate. In any event, it was the terms and conditions of the offer itself, not a
counter-offer (had there been one), that gave Rzepiennik notice of the alleged
SOX violation.
The adverse action occurred when Archstone’s offer was made. Rzepiennik
had 21 days to accept and/or 90 days to file. The time for filing his
administrative charge ran from when he received the letter, on or about August
24, 2003.
B. Date SOX Complaint was Filed
In his complaint, Rzepiennik specifically said he “filed this action by letter
with [OSHA]” and “OSHA marked as received this complaint on December 15,
2003.” Aplt. App. at 27 (emphasis added). If, as discussed above, we employ the
August 24, 2003, date as the date the 90-day period began running, the OSHA
complaint should have been filed no later than November 22, 2003. Even if
5
Rzepiennik analogizes his case to Connecticut Light & Power Co. v.
Secretary of United States Department of Labor, 85 F.3d 89 (2d Cir. 1996).
That case, however, did involve an ongoing negotiation process and we do not
find it persuasive here.
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we were to extend the presumptive filing deadline to Monday, November 24,
2003 — because the 22nd fell on a Saturday — this date is over three weeks
before the December 15, 2003, date of filing recited in Rzepiennik’s complaint.
Notwithstanding the plain language of his complaint, Rzepiennik attempts
to establish some date other than December 15, 2003, as the filing date for his
complaint. He first argues that the varying file stamp dates on the copy of the
complaint Archstone submitted have created a factual issue incapable of
resolution on a motion to dismiss. But both the file stamp dates are after the
presumptive filing deadline: the earlier of the two is dated December 15, 2003.
Rzepiennik next argues the date he mailed his complaint, rather than the
date on which OSHA received the complaint, should be used as the filing date.
The copy of the complaint submitted by Archstone does indicate it was “mailed”
to OSHA and others. Aplt. App. at 48. Unless the complaint is filed in person,
such as by hand-delivery, “[t]he date of the postmark, facsimile transmittal,
or e-mail communication will be considered to be the date of filing” 29 C.F.R.
§ 1980.103(d).
Neither party has submitted a postmarked envelope to establish the date
Rzepiennik mailed his complaint. In the absence of such evidence, he argues, the
postmark date could be computed by subtracting five days from the date of
receipt. Aplt. App. at 100 & n.6. Fair enough. But in order to work backwards
to a mailing date within the filing period, Rzepiennik would require considerably
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more than five days. He would have to show his complaint was postmarked on or
before November 24, 2003, and thus that it took more than three weeks to arrive
and be file-stamped at OSHA.
Rzepiennik provides no good reason to apply such a lopsided calculation in
his case. 6 He does contend, based on a finding by the ALJ in his administrative
proceeding, the SEC received its copy of the complaint on December 5, 2003, and
that this creates a factual issue about when he mailed his complaint to OSHA.
But even assuming a simultaneous mailing date to OSHA and the SEC, applying
the five-day presumption to the SEC’s date of receipt yields a mailing date of
November 30, 2003. That is still nearly a week too late.
C. Conclusion
Rzepiennik had 90 days from the date he received Archstone’s offer,
August 24, 2003, to file his administrative SOX claim with OSHA. He failed to
file within the 90-day period. His claim was therefore untimely, and the district
6
Rzepiennik now argues that this court should take judicial notice that in
November 2003, anthrax threats led to the closing of numerous post offices in the
Washington, D.C. area. This event, he argues, may have slowed OSHA’s receipt
of his complaint. See Aplt. Opening Br. at 17 n.8. But he did not make this
argument in the district court. In fact, as noted, there he argued for a five-day
mailing presumption. We generally do not consider arguments made for the first
time on appeal, and therefore decline to consider his contention concerning
unscheduled closures at the post office. United States v. Jarvis, 499 F.3d 1196,
1201-02 (10th Cir. 2007).
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court properly dismissed his SOX claim for failure of timely exhaustion of his
administrative remedies.
2. State Law Contract Claim
As noted, Archstone attached to its motion to dismiss a copy of the
Development Incentive Plan, which designated Maryland law as governing
authority. Under Maryland law, a civil action must be filed within three years
from the date it accrues unless a specific code provision provides otherwise.
Butler v. VisionAIR, Inc., 385 F. Supp. 2d 549, 553 (D. Md. 2005). A cause of
action “accrues” when “the claimant in fact knew or reasonably should have
known of the wrong.” Id. (quotation omitted). In contract cases, this generally
refers to the date of the breach. Id.The district court found Rzepiennik’s breach of contract claim accrued, at
the latest, when the settlement offer was made, on August 20, 2003. Thus, his
complaint, filed June 13, 2007, was untimely under the three-year statute of
limitations.
Rzepiennik argues, however, that the choice of Maryland law depends on
the accuracy and validity of Archstone’s Development Incentive Plan. He admits
that he has no basis on which to challenge the authenticity of the Plan document.
But he argues that he has never conceded that Archstone’s offer was necessarily
coterminous with the Plan document. Archstone may have made bonus offers
outside of the formal terms of the Plan to silence whistleblowers. Such offers
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might not be subject to the Plan’s choice-of-law provision. He asserts that further
discovery is necessary to determine whether this is the case. He says he asked the
district court for discovery, but his request was ignored. 7
These arguments fail, however, for one simple reason. Rzepiennik has pled
a breach of contract claim. The settlement letter itself did not create a contract,
because he never signed it. The only possible contract breached was the contract
created by his employment. And the only basis within that employment contract
for him to receive a bonus was that provided by the Plan itself, as he implicitly
acknowledges in his complaint:
57. Defendant breached its agreement with Plaintiff by willfully and
wantonly refusing to pay him his Development Incentive Plan Bonus
for 2002 in the amount of $255,589. This is a liquidated amount
requiring little or no computation.
Aplt. App. at 28 (emphasis added).
7
Rzepiennik attempts to expand his argument on appeal to include a
challenge to the authenticity of the Plan document itself. See Aplt. Br. at 27-28.
But he did not make this argument in the district court. See Aplt. App. at 143-45.
The argument will therefore be disregarded.
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Any bonus offer Archstone made outside of the Plan and after the
termination of Rzepiennik’s employment would be just that: an offer.
Rzepiennik cannot base a breach of contract claim on the withdrawal of an offer
he never accepted. The only contract he had was based on the Plan.
The judgment of the district court is AFFIRMED.
Entered for the Court
Terrence L. O’Brien
Circuit Judge
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