C&H Company v. Richardson

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
C & H COMPANY, a corporation, 
Plaintiff-Appellant,
v.
ANDREW N. RICHARDSON, in his
individual capacity; JOHN H. KOZAK,
in his individual capacity; WILLIAM
F. VIEWEG, in his individual
capacity; JOHN E. "ED" BURDETTE,  No. 00-2388
II, in his individual capacity,
Defendants-Appellees,
and
STATE OF WEST VIRGINIA BUREAU OF
EMPLOYMENT PROGRAMS, DIVISION OF
WORKERS COMPENSATION,
Party in Interest.

Appeal from the United States District Court
for the Southern District of West Virginia, at Charleston.
Joseph Robert Goodwin, District Judge.
(CA-98-1079-2)
Argued: June 5, 2001
Decided: October 27, 2003
Before WIDENER and WILLIAMS, Circuit Judges, and
Robert R. BEEZER, Senior Circuit Judge of the
United States Court of Appeals for the Ninth Circuit,
sitting by designation.
2 C & H COMPANY v. RICHARDSON
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: James David Kauffelt, KAUFFELT & KAUFFELT,
Charleston, West Virginia, for Appellant. Bryan Rex Cokeley, STEP-
TOE & JOHNSON, Charleston, West Virginia; Stephen Mark Fow-
ler, PULLIN, KNOPF, FOWLER & FLANAGAN, Charleston, West
Virginia, for Appellees. ON BRIEF: H. Toney Stroud, STEPTOE &
JOHNSON, Charleston, West Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
C & H Company (C & H) appeals from the district court’s order
granting summary judgment to Andrew N. Richardson, John H.
Kozak, John E. Burdette II, and William F. Vieweg on C & H’s
claims under the West Virginia Constitution and 42 U.S.C.A. §§ 1983and 1985(3) (West 2003) alleging disparate treatment in the applica-
tion of certain West Virginia workers’ compensation statutes. For the
reasons that follow, we affirm.
I.
This case involves the application of regulations governing the
payment of workers’ compensation premiums for taxicab drivers in
West Virginia. Pursuant to W. Va. Code § 23-2-1(a) (2002), "all per-
sons, firms, associations and corporations regularly employing
another person or persons for the purpose of carrying on any form of
industry, service or business in [West Virginia] are employers . . . and
are . . . required to subscribe to and pay premium taxes into the work-
C & H COMPANY v. RICHARDSON 3
ers’ compensation fund for the protection of their employees." See
also W. Va. Code § 23-2-1a(a) (defining an "employee" as a "per-
son[ ] in the service of employers and employed by them for the pur-
pose of carrying on the industry, business, service or work in which
they are engaged"). Businesses having relationships only with inde-
pendent contractors rather than "employees," however, are not
required to pay premium taxes into the workers’ compensation fund.
See generally C & H Taxi Co. v. Richardson, 461 S.E.2d 442, 447-48
(W Va. 1995); Myers v. Workmen’s Comp. Comm’r, 148 S.E.2d 664(W. Va. 1966).
The operation of taxicabs in West Virginia is regulated by the West
Virginia Public Service Commission (PSC). W. Va. Code §§ 24-2-1,
24A-1-1 (2001). Initially, all taxicab drivers in West Virginia were
considered by the PSC to be employees of their taxicab companies.
In 1981, however, "largely as the result of a financial decline in the
taxicab industry, the West Virginia Taxicab Association petitioned
the [PSC] for another option by which to do business," a petition that
"resulted in the adoption by the [PSC] of P.S.C. W. Va. M.C. Form
No. 55 [hereinafter Form 55]." C & H, 461 S.E.2d at 444. Form 55
is a form lease, by which device "many taxicab companies in West
Virginia converted their employee drivers to lessees." Id. Form 55 is
the mandatory method for an employer wishing to convert employee-
drivers to lessees. Id. Drivers leasing their cabs under Form 55 were,
until a 1990 change in policy discussed below, considered indepen-
dent contractors.
At the times relevant to this action,1 the Workers’ Compensation
Fund (the Fund) in West Virginia was under the jurisdiction of the
Commissioner of the Bureau of Employment Programs (BEP). W.
Va. Code § 23-1-1. The Fund was administered through the Workers’
Compensation Division of the BEP (the Division).
1
The management of West Virginia’s workers’ compensation fund was
significantly revised by the state legislature in 2003. See 2003 W. Va.
Acts ch. 27. We describe the structure as it existed at the times relevant
here.
4 C & H COMPANY v. RICHARDSON
A.
With this background in place, we turn to the parties and issues
before us. C & H is a taxicab company operating in Charleston, West
Virginia. C & H is owned by Corey Brothers Inc., a corporation in
turn owned by Steven J. Corey,2 Robert D. Corey, Alexander Corey,
and Richard G. Corey. The named defendants (collectively, Defen-
dants) are as follows. Richardson was the Commissioner of the West
Virginia Bureau of Employment Programs from 1990 to 1997. Kozak
was Executive Secretary of the Fund from 1989-1991, Executive
Director of the Division from 1991-1993, and Director of Legal Ser-
vices for the Division from 1993-1998. Vieweg was Commissioner of
the West Virginia BEP from 1997-2001. Burdette was Executive
Director of the Division from 1993-2000. Also relevant to this appeal
are two companies that are not parties. Taxi Service, Inc. (Taxi Ser-
vice) is a taxicab service operating in Huntington, West Virginia and
owned by Jamie Marlowe. Burns & Church Baggage and Yellow Cab
Co., Inc. (Yellow Cab) is a taxicab service operating in Wheeling,
West Virginia and owned by Michael Sobota. From the mid-1980s,
C & H, Taxi Service, and Yellow Cab leased taxicabs to drivers for
a set time for a flat fee paid by the leasing driver. Each of these com-
panies used the PSC’s Form 55 for this purpose.
Beginning in August 1989 and continuing through July 1990, a
heated, public dispute arose between Steven Corey and the then-
Governor of West Virginia, Gaston Caperton, regarding a contract to
promote fairs and festivals (the festival contract) between Incorsel, a
company owned by Steven Corey, and the Caperton administration.
C & H alleges that this dispute, as well as subsequent litigation and
the resulting acrimonious relationship between the Coreys and the
Caperton administration, resulted in West Virginia officials applying
Division regulations to it and refraining from applying the same regu-
lations to two other similarly situated taxicab companies.
Specifically, C & H notes that on June 26, 1990, the Division
issued a notice to all taxicab and limousine service employers,
informing them that taxicab and limousine drivers operating under a
PSC Form 55 would be presumed to be employees, rather than inde-
2
Steven Corey is now deceased.
C & H COMPANY v. RICHARDSON 5
pendent contractors ("1990 regulation"). These notices came at the
end of an internal inquiry begun in 1988 or 1989 and performed by
Thomas Sweeney and then-Commissioner of the BEP Emily A.
Spieler into the employment status of taxicab drivers for purposes of
workers’ compensation coverage. After reviewing the practices of cab
companies and caselaw, the Legal Services department of the Divi-
sion took the position in a memorandum dated April 1, 1990, that
taxicab drivers should be treated as employees. On July 27, 1990 a
notice of the policy was issued to "All Taxicab and Limousine Ser-
vice Employers," with an effective date of July 1, 1990 (the 1990
Notice).
C & H, Yellow Cab, and Taxi Service filed Administrative Peti-
tions contesting coverage under the new rule prescribed in the 1990
Notice.3 Kozak scheduled C & H’s hearing for December 13, 1990,
Yellow Cab’s hearing for January 24, 1991, and Taxi Service’s hear-
ing for February 14, 1991. After Taxi Service and Yellow Cab filed
motions for continuances, the hearings in those matters were contin-
ued pending resolution of C & H’s case. C & H’s hearing was held
as scheduled on December 13, 1990.
On April 23, 1991, the hearing examiner in C & H’s administrative
hearing found that C & H drivers should be considered employees for
workers’ compensation purposes. The Division affirmed this decision
on May 22, 1991, as did the Circuit Court of Kanawha County, on
January 26, 1994, and the Supreme Court of Appeals of West Vir-
ginia, on June 19, 1995, see C & H, 461 S.E.2d at 447. The Division
thereafter began assessing workers’ compensation premiums against
C & H, and in September 1995, C & H began paying these premiums.4
C & H paid over $200,000 in premiums between 1995 and 1999.
On June 26, 1991, after the decision of the hearing examiner in C
& H’s case but well before the decision by the Circuit Court of Kana-
wha County, Richardson met with Marlowe, the owner of Taxi Ser-
3
C & H also filed, in July 1990, a declaratory judgment action in state
court challenging the Division’s notice. That case was ultimately dis-
missed.
4
Neither Taxi Services nor Yellow Cab paid any premiums until 1999,
after the present action was filed.
6 C & H COMPANY v. RICHARDSON
vice. Handwritten notes by Marlowe suggest that Richardson told
Marlowe at that meeting to "do nothing" with respect to workers’
compensation premiums. (J.A. at 527.)
Following the decision of the Supreme Court of Appeals of West
Virginia in 1995, C & H turned its attention to determining whether
the Division’s new rules were being applied equally to all taxicab
companies in the state. In October of 1996, C & H requested informa-
tion from the Division regarding the premium rates being paid by
other companies. The Division’s response indicated that C & H was
classified differently than Yellow Cab and Taxi Service. Kozak was
made aware of the apparent misclassification of these and other taxi-
cab companies, as well as the resultant disparity in premium rates. On
October 28, 1996, Kozak sent a memorandum to Angela Sheperd, the
Division’s director of the Office of Employer Accounts, directing
investigation and reclassification of a number of taxicab operations
and limousine operations, including both Taxi Service and Yellow
Cab. C & H also sent a letter to Kozak requesting a meeting to discuss
the rate classification of its drivers.
In response to Kozak’s memo to Sheperd, Field Auditor Robert C.
Skeen conducted an investigation into Yellow Cab’s classification.
He subsequently prepared a memorandum, dated November 21, 1996,
in which he concluded that although Yellow Cab was misclassified as
an "automobile/truck rental operation" company, its drivers were
independent and should not be considered employees for workers’
compensation purposes. (J.A. at 165.)5
On April 7, 1997, Burdette wrote a letter to two delegates in the
5
On March 17, 1997, Skeen prepared a second memorandum suggest-
ing that instead of presuming that all drivers leasing their vehicles were
employees of the lessees, the Division should adopt the classification
method then used by the IRS, including, among other considerations, "20
common law factors." (J.A. at 168-69.) It is not clear whether Skeen’s
suggestion was intended to be consistent with, or to replace, the "right
to control" test adopted by the West Virginia Supreme Court of Appeals
in C & H Taxi Co. v. Richardson, 461 S.E.2d 442, 448 (W. Va. 1995).
The memorandum does not indicate any significant consideration of the
precedential effect of the holding in C & H.
C & H COMPANY v. RICHARDSON 7
West Virginia House of Delegates, each of whom had apparently
requested information regarding the classification of taxicab compa-
nies from Vieweg, indicating that the BEP planned to review the sta-
tus of each individual taxicab company and draw its own conclusion
of the employment relationship for purposes of workers’ compensa-
tion using the IRS "guide questions." (JA 171.)
On June 13, 1997 and July 1, 1997, C & H wrote to Laura Buchko
of the Division’s Legal Services Division, requesting information
regarding the premium rate for the taxicab industry. C & H also indi-
cated in these letters that it wished to discuss with Buchko the "appar-
ently singular" requirement that C & H pay workers’ compensation
premiums on its drivers while other companies were not required to
do so. (J.A. at 184.) On July 7, 1997, Buchko responded to these let-
ters, indicating that the Office of Employer Accounts (OEA) had not
yet completed audits of other companies and that OEA was in the pro-
cess of establishing an underwriting team that would review the rates
paid by other taxicab companies.
In late 1997,6 C & H sent Kozak a letter informing him that several
other taxicab companies were not paying premiums on drivers and
were, in C & H’s opinion, misclassified; that the "audits" of other
taxicab companies referred to in Buchko’s letter of July 13, 1997
appeared to have ceased; that C & H had altered its operations in
ways that, in its opinion, rendered its drivers independent contractors,
rather than employees, for workers’ compensation purposes under the
IRS "common law" test that C & H understood the Division to have
recently adopted; and that C & H felt that the Division was intention-
ally discriminating against it. This letter was received by Randall B.
Suter (Suter), Senior Counsel with the Legal Services Division. In
response to an email from Suter requesting information about the C
& H situation, Kozak responded that "Randy, Richard Stephenson,
Terry Owen, and I worked on the initial lawsuit. Underwriting is sup-
posed to be reviewing all the other taxi employers to get them
straightened out. Be prepared for a real UGLY meeting as these folks
are really hostile." (J.A. at 583 (emphasis in original).) Burdette also
6
The reproduction of this letter in the joint appendix bears two differ-
ent dates: November 14, 1997, and December 5, 1997. (J.A. at 546-47.)
We conclude that the discrepancy is immaterial.
8 C & H COMPANY v. RICHARDSON
responded to Suter’s request for information, stating that "[C]&[H]is
a [West Virginia] [S]upreme [C]ourt decision. [W]hy would we
revisit that issue?" (J.A. at 584.) Having received these responses,
Suter responded by letter to C & H on December 23, 1997, stating
that "[the Division] believes that the employment and classification
questions [regarding C & H] have been addressed and resolved by the
State Supreme Court in C & H Taxi v. Richardson, 194 W. Va. 696,
461 S.E.2d 442 (1995)." (J.A. at 195.) Suter further indicated that any
change in the Division’s procedures for determining employ-
ee/contractor status would be made via a "regulatory change" pro-
posed at a public meeting, and that any information C & H could
provide regarding misclassification of other taxicab companies would
be appreciated. (J.A. at 194-95.)
Finally, on April 16 and May 22, 1998, C & H wrote to Vieweg,
informing him of the misclassification of Yellow Cab and Taxi Ser-
vice. C & H apparently received no response to these letters. The two
other taxicab companies did not begin to pay premiums until July of
1999.
B.
Eventually having become frustrated with the Division’s response
to its concerns, on October 30, 1998, C & H filed a complaint alleging
seven Counts under the First and Fourteenth Amendments to the
United States Constitution, 42 U.S.C. §§ 1983 and 1985(3), and Arti-
cle III, Sections 7 and 10 of the Constitution of West Virginia. These
Counts include: 1) a claim against Richardson and Kozak based on
their decision to assert coverage over taxicab drivers and their deci-
sion to prosecute administrative proceedings against C & H—but not
other companies; 2) a claim against all defendants based on applica-
tion to C & H, but not other companies, of the 1990 regulation; 3) a
claim against all Defendants based on discriminatory premium rate
classification; 4) a claim against Vieweg and Burdette based on dis-
criminatory application of the 1997 revised standard; 5) a claim
against Vieweg for his failure to correct the discriminatory treatment
despite actual knowledge; 6) a claim against Burdette for his failure
to correct the problem despite actual knowledge; and 7) a claim
restating Counts 1-6 as state law claims.7 C & H alleged that these
7
Although C & H asserted a number of state law grounds for recovery
in its complaint, the district court granted summary judgment to Defen-
C & H COMPANY v. RICHARDSON 9
actions were motivated by the Caperton administration’s desire to
retaliate for public statements made by Steven J. Corey and Richard
G. Corey and for litigating the "employee" issue, and as a bad faith
effort to injure C & H.
Defendants filed an answer and, after discovery, a motion for sum-
mary judgment. The defendants asserted that: (1) C & H has not
established that the decision to assert workers’ compensation cover-
age over cab drivers was causally related to the speech of its owners;
(2) bureaucratic inefficiency resulted in the uneven application of the
premium rates and coverage; and (3) the defendants could not be sued
in their official capacities.
The district court granted summary judgment to the defendants
because, under the McDonnell Douglas8 burden-shifting regime, C &
H had not rebutted the Defendants’ legitimate, non-discriminatory
explanation for the unequal treatment—bureaucratic inefficiency. C &
H timely appealed.
dants without addressing these claims specifically beyond a recitation of
their existence in the first paragraph of its Memorandum Opinion and
Order. In its opening brief, C & H makes no specific argument concern-
ing its state law claims, confining itself to general arguments that the dis-
trict court erred in granting summary judgment with respect to all of its
claims, and citing only federal-law cases for the applicable legal stan-
dards. Accordingly, we consider C & H to have abandoned any argument
that its state law claims should have been analyzed under a different legal
standard than that applicable to its federal claims. See Edwards v. City
of Goldsboro, 178 F.3d 231, 241 n.6 (4th Cir. 1999).
8
The district court applied the burden-shifting scheme applicable under
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04 (1973), to
employment discrimination actions. C & H contends that the district
court erred in applying this framework. We conclude that the district
court’s grant of summary judgment to Defendants may be affirmed with-
out reference to McDonnell Douglas and accordingly have no occasion
to address the applicability of the scheme described therein.
10 C & H COMPANY v. RICHARDSON
II.
We exercise jurisdiction pursuant to 28 U.S.C.A. § 1291 (West
1993). We review a district court’s grant of summary judgment de
novo, see United States v. Kanasco, Ltd., 123 F.3d 209, 210 (4th Cir.
1997), considering the facts and inferences drawn therefrom in the
light most favorable to the nonmoving party, see Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255 (1986); Gillins v. Berkeley Elec. Co-
op, Inc., 148 F.3d 413, 415 (4th Cir. 1998). The moving party must
demonstrate the absence of a genuine issue of material fact and that
it is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c);
see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
Unsupported speculation is not sufficient to defeat a summary judg-
ment motion. See Felty v. Graves-Humphreys Co., 818 F.2d 1126,
1128 (4th Cir. 1987).
We face the initial question whether public officials can be liable
under the Equal Protection Clause and 42 U.S.C.A. §§ 1983 and
1985(3) for applying a valid law unequally to similarly situated per-
sons. In Village of Willowbrook v. Olech, 528 U.S. 562 (2000) (per
curiam), the Supreme Court recognized the viability of a "class of
one" theory in actions under the Equal Protection Clause, "where the
plaintiff alleges that she has been treated differently from others simi-
larly situated and that there is no rational basis for the difference in
treatment." Id. at 564. The plaintiff in Olech alleged that the defen-
dant Village’s action — a refusal to connect the plaintiff’s property
to the municipal water supply without the plaintiff’s consent to a 33-
foot easement — was intentional; that other, similarly situated prop-
erty owners were required to consent only to 15-foot easements; that
the Village’s demand for a 33-foot easement was "irrational and
wholly arbitrary[;] and that the Village ultimately connected [the
plaintiff’s] property after receiving a clearly adequate 15-foot ease-
ment." Id. at 565 (internal quotation marks omitted). "These allega-
tions," the Court concluded, "quite apart from the Village’s subjective
motivation, are sufficient to state a claim for relief under traditional
equal protection analysis." Id.While it is thus clear that the Equal Protection Clause prohibits
intentional discrimination even against a "class of one," there remains
the question whether § 1983 and § 1985(3) provide a remedy in a case
C & H COMPANY v. RICHARDSON 11
such as this one. That § 1983 affords such a remedy on appropriate
proof is clear — the action brought in Olech was itself a claim pursu-
ant to § 1983, see Olech v. Village of Willowbrook, 1998 WL 196455(N.D. Ill. 1998) (district court opinion). That § 1985(3) provides such
a remedy, however, is not. To recover under § 1985(3), a plaintiff
must establish the existence of a conspiracy and show "some racial
or perhaps otherwise class-based, invidiously discriminatory animus
behind the conspirators’ action." Griffin v. Breckenridge, 403 U.S. 88,
102-03 (1971); see also Simmons v. Poe, 47 F.3d 1370, 1376-77 (4th
Cir. 1995) (holding that a plaintiff must prove, inter alia, that the con-
spirators’ actions "are motivated by a specific class-based, invidiously
discriminatory animus"). C & H does not allege that any racial ani-
mus motivated the apparent unequal treatment here, and accordingly
it would have to demonstrate some qualifying "otherwise class-based"
discrimination. See, e.g., Bartell v. Lohiser, 215 F.3d 550, 560 (6th
Cir. 2000) ("[Section] 1985(3) only covers conspiracies against: 1)
classes who receive heightened protection under the Equal Protection
Clause; and 2) ‘those individuals who join together as a class for the
purpose of asserting certain fundamental rights’") (quoting Browder
v. Tipton, 630 F.2d 1149, 1150 (6th Cir. 1980)). C & H does not
allege that the complained-of discrimination resulted from its mem-
bership in any qualifying class. Cf. United Bhd. of Carpenters, Local
610 v. Scott, 463 U.S. 825, 837-39 (1983) (holding that § 1985(3)
does not reach conspiracies motivated by economic or commercial
animus). Accordingly, the district court properly granted summary
judgment on C & H’s claims under § 1985(3).
Turning to the question whether the district court properly granted
summary judgment on C & H’s claims under § 1983 and the Equal
Protection Clause, we briefly examine the proof required to make out
such a claim. Most importantly for our purposes, a plaintiff alleging
an Equal Protection violation actionable under § 1983 must establish
that the differential treatment it was afforded was intentional, not the
result of mere negligence. See Bryan v. City of Madison, Miss., 213
F.3d 267, 277 (5th Cir. 2000); cf. also County of Sacramento v. Lewis,
523 U.S. 833, 848-49 (1998) (holding that an allegation of negligence
cannot form the basis of a § 1983 claim based on an alleged due pro-
cess violation); Veney v. Wyche, 293 F.3d 726, 730-31 (4th Cir. 2002)
(noting that, to succeed on an equal protection claim under § 1983, a
plaintiff "‘must first demonstrate that he has been treated differently
12 C & H COMPANY v. RICHARDSON
from others with whom he is similarly situated and that the unequal
treatment was the result of intentional or purposeful discrimination’"
(quoting Morrison v. Garraghty, 239 F.3d 648, 654 (4th Cir. 2001)).
The requisite intent in this context is more than simple awareness of
the course of action being taken. As the Supreme Court has explained,
"[d]iscriminatory purpose . . . implies more than intent as volition or
intent as awareness of consequences." Personnel Adm’r v. Feeney,
442 U.S. 256, 279 (1979) (internal quotation marks omitted). Rather,
"[i]t implies that the decisionmaker . . . selected or reaffirmed a par-
ticular course of action at least in part ‘because of,’ not merely ‘in
spite of,’ its adverse effects upon an identifiable group." Id. C & H
has alleged that assessment of fees for workers’ compensation cover-
age of its drivers was a course of action selected by the defendants
in retaliation for the exercise of constitutional freedoms by its owners.
Thus, we turn to an examination of the evidence presented and fore-
cast by C & H to determine whether its allegations of intentional dis-
crimination are sufficient to survive summary judgment on the record
before us. See Fed. R. Civ. P. 56(c) (stating that summary judgment
shall be awarded "if the pleadings, depositions, answers to interroga-
tories, and admissions on file, together with the affidavits, . . . show
that there is no genuine issue as to any material fact and that the mov-
ing party is entitled to judgment as a matter of law").
Initially, we assume that C & H was treated differently than Yellow
Cab and Taxi Service — two similarly situated companies. Assuming
this different treatment, C & H asserts that there are several points on
which there is a genuine issue of material fact as to Defendants’
intent.
C & H contends that Governor Caperton directed the Division to
punish Steven Corey for his public statements by initiating that 1990
regulation and asserting that C & H’s drivers are employees rather
than independent contractors, and therefore covered by workers’ com-
pensation premium requirements. A primary basis for C & H’s con-
tention that the Division’s actions constituted retaliation is the timing
of those actions relative to the dispute between Corey and the Caper-
ton administration and the related litigation instituted by Corey.
First, C & H argues that the 1990 Notice is closely linked in time
with the intensification of the dispute between Corey and the Caper-
C & H COMPANY v. RICHARDSON 13
ton administration. While timing may be relevant, it is not always suf-
ficient to create a triable issue of fact on the issue of intent. See, e.g.,
Zahra v. Town of Southold, 48 F.3d 674, 684 (2d Cir. 1995) (conclud-
ing that timing was insufficient to establish motive in a selective
enforcement case). Here, the events closely linked in time are the dis-
pute between Corey and the Caperton administration and the Divi-
sion’s announcement of a new standard applicable to all taxicab
companies. The new rule announced in the 1990 Notice was not an
action specific to C & H, but rather an across-the-board change to be
applied equally to all such companies. Only several years later was
this new rule ultimately applied to require C & H to pay workers’
compensation premiums on its drivers. Moreover, Defendants offered
undisputed evidence that the process resulting in the 1990 notice was
instituted before the controversy surrounding the festival contract
began. (J.A. at 88-90.) Finally, none of the named defendants was
involved in the policy decision announced in the 1990 Notice. (J.A.
at 115.) Accordingly, the timing of the 1990 Notice is insufficient to
create a triable issue of fact regarding any Defendant’s intent to dis-
criminate against C & H.
C & H further contends that the 1990 regulation was instituted in
retaliation for C & H’s filing suit regarding its festival contract dis-
pute with the Caperton administration. Whereas the 1990 regulation
decision was made in April 1990 after an internal investigation begun
in 1988 or 1989, however, the public dispute regarding the contract
intensified in May 1990, and a suit was filed by Incorsel on June 15,
1990. (JA 22-23.) Thus, C & H’s timing argument regarding the link-
age between the 1990 Notice and Corey’s initiation of litigation is
fatally flawed, and cannot establish the existence of a genuine issue
of material fact.
In addition to its timing arguments, C & H also contends that the
actions of the Division in not applying the 1990 regulation even-
handedly, in not fixing the premium misclassification, and not apply-
ing the new (IRS) standard apparently adopted by the Division in
1997 to determine drivers’ independent contractor status constituted
a deliberate, bad faith attempt to injure it by discriminating against it.
There is a strong presumption that state actors properly discharge
their duties. See United States v. Mezzanatto, 513 U.S. 196, 210
(1995). Nonetheless, we address C & H’s several arguments regard-
14 C & H COMPANY v. RICHARDSON
ing the pieces of evidence it alleges establish the requisite intent to
support its claim.
First, C & H points to Richardson’s advice to Marlowe during their
meeting on June 26, 1991. C & H asserts that Richardson’s advice to
"do nothing" constituted a suggestion regarding how to avoid paying
workers’ compensation premiums. Such an inference, however, is not
reasonable under the circumstances. At the time of Richardson’s
meeting with Marlowe, C & H’s challenge to application of the 1990
regulation was pending in West Virginia state court. Further, Taxi
Service’s similar challenge had been continued pending resolution of
C & H’s case. As of June, 1991, none of the taxicab companies we
have discussed, including C & H, were paying workers’ compensa-
tion premiums on their drivers; C & H did not begin paying such pre-
miums until four years later, after the decision of the Supreme Court
of Appeals of West Virginia. Under the circumstances, then, Richard-
son’s advice to "do nothing" for the time being with respect to work-
ers’ compensation premiums cannot reasonably be interpreted as C &
H would have us interpret it — as an indication that Taxi Service
could forever avoid paying workers’ compensation premiums simply
by lying low. Rather, Richardson’s statement simply reflects the
undisputed fact that the applicability of the 1990 regulation was
uncertain as of the time of the meeting.9
Second, C & H points to a 1997 email it states evinces hostility by
Kozak toward C & H. This email states in reference to a prospective
meeting, "Be prepared for a real UGLY meeting as these folks are
really hostile." (emphasis in original). This email is not probative of
the Division’s or Kozak’s intent against C & H; it merely is an obser-
vation from Kozak’s perspective regarding C & H’s attitude. Cf.
LeClair v. Saunders, 627 F.2d 606, 611 (2d Cir. 1980) (holding that
evidence that inspector was angry with another farmer visited imme-
diately before plaintiff did not prove malice toward plaintiffs). Addi-
9
In a similar vein, C & H points out that Stephenson cancelled, in
1991, a study he had ordered to determine how Taxi Service’s drivers
should be classified. As with C & H’s allegations regarding the meeting
between Richardson and Marlowe, we cannot conclude that this action
reflects anything more than the uncertain status of the 1990 regulation
during 1991.
C & H COMPANY v. RICHARDSON 15
tionally, C & H points to the fact that handwritten notes by Burdette
equate C & H with "Corey." Because Burdette was aware of Richard
Corey’s statements critical of the Division, C & H contends that
equating the two allows an inference of discriminatory intent. We
conclude, however, that this inference is too speculative to permit an
inference of intent to discriminate against C & H.
Third, C & H contends that despite having continued the Taxi Ser-
vice and Yellow Cab matters until resolution of C & H’s case and
receiving repeated, actual notice about the disparity of treatment
regarding the application of the 1990 regulation, the premium mis-
classifications, and a request for application of the 1997 revised stan-
dard, the Division intentionally did not address these disparities. The
Division has asserted that bureaucratic inefficiency caused the dispar-
ity. More importantly, however, C & H has not proffered any evi-
dence that would establish the specific intent of any defendant. See
Lisa’s Party City, Inc. v. Town of Henrietta, 185 F.3d 12, 17 (2d Cir.
1999) (holding that plaintiff could not withstand motion for summary
judgment because proof of malice rested on "conjecture and specula-
tion"); LaTrieste Rest. & Cabaret Inc. v. Village of Port Chester, 40
F.3d 587, 590 (2d Cir. 1994) (overturning grant of summary judgment
when evidence was presented that police chief stated "I do not want
a topless club in my town" and mayor participated in picketing dem-
onstrations); Terminate Control Corp. v. Horowitz, 28 F.3d 1335,
1353 (2d Cir. 1994) (overturning district court dismissal in selective
enforcement claim because evidence that officials planned to damage
plaintiff through selective "white glove" inspections was produced).
C & H’s speculative interpretation of the Division’s inaction, without
more, is insufficient to permit an inference of intent. Indeed, Richard
Corey admitted that he had no knowledge, information, or documents
indicating that Governor Caperton directed anyone to take action
against C & H.
As the record now stands, the evidence presented and inferences
drawn from it support negligent conduct caused by ill-managed gov-
ernment, but not the requisite discriminatory intent. For a jury to
adopt C & H’s claim of discriminatory intent, it would have to engage
in sheer speculation and conjecture. Because C & H has not presented
evidence from which non-speculative inference of intent can be
drawn, we affirm the decision of the district court granting summary
16 C & H COMPANY v. RICHARDSON
judgment on all counts to the defendants. See Ford Motor Co. v.
McDavid, 259 F.2d 261, 266 (4th Cir. 1958) (stating that
"[P]ermissible inferences must still be within the range of probability
. . . and it is the duty of the court to withdraw the case from the jury
when the necessary inference is so tenuous that its rests merely upon
speculation and conjecture").
III.
Because C & H has not presented evidence of discriminatory
intent, the district court did not err in granting summary judgment on
all counts to defendants. Accordingly, we affirm the judgment of the
district court.
AFFIRMED