Tanner v. Kaiser Foundation Health Plan Inc. et al

ORDER by Saundra Brown Armstrong granting {{37}} Defendants' Motion to Dismiss Plaintiff's Amended Complaint without leave to amend; and granting Defendants' Request for Judicial Notice {{38}}.

Northern District of California, cand-4:2015-cv-02763

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5 1 2 3 4 UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 OAKLAND DIVISION 7 8 DR. SCOTT TANNER, an individual, Case No: C 15-02763-SBA 9 Plaintiff, ORDER GRANTING MOTION TO DISMISS 10 v. 11 KAISER FOUNDATION HEALTH PLAN, INC., a California corporation, KAISER 12 FOUNDATION HOSPITALS, a California corporation, NORTHERN CALIFORNIA 13 PERMANENTE MEDICAL GROUP, INC., a California corporation, and DOES 1-50, 14 Defendants. 15 16 Plaintiff Scott Tanner ("Plaintiff") filed the instant pro se action against his former 17 employers Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and The 18 Permanente Medical Group, Inc. ("TPMG," erroneously sued as Northern California 19 Permanente Medical Group, Inc.) (collectively, "Kaiser" or "Defendants"). Plaintiff seeks 20 to rescind his employment separation agreement with Kaiser, including the comprehensive 21 release of claims contained therein. Upon rescinding the same, Plaintiff further seeks to 22 prosecute claims for wrongful termination, discrimination, and retaliation. 23 The parties are presently before the Court on Defendants' Motion to Dismiss 24 Plaintiff's Amended Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6). 25 Dkt. 37. Having read and considered the papers filed in connection with this matter and 26 being fully informed, the Court hereby GRANTS Defendants' motion, for the reasons 27 stated below. The Court, in its discretion, finds this matter suitable for resolution without 28 oral argument. See Fed. R. Civ. P. 78(b); N.D. Cal. Civ. R. 7-1(b). 5 1 I. BACKGROUND 2 A. FACTUAL SUMMARY 3 In 2000, Plaintiff began working for the Kaiser Permanente Outpatient Pharmacy 4 Department. First Am. Compl. ("FAC") ¶ 14, Dkt. 33. Plaintiff served as a staff 5 pharmacist, a lead pharmacist, a pharmacist supervisor, and finally, in late 2010, as 6 Pharmacist-In-Charge at Kaiser's Manteca location. Id. 7 The allegations of Plaintiff's 56-page FAC (like his 69-page original complaint) are 8 profuse and discursive. In brief, between 2010 and 2012, Plaintiff was allegedly subject to 9 harassment, discrimination, and retaliation at work. FAC ¶¶ 14-66. Plaintiff is a white 10 male, over the age of 40, with an undisclosed "physiological serious health 11 condition/physical disability." Id. ¶¶ 88, 94, 103. During the relevant period, Kaiser's 12 pharmacy staff in Manteca was 85-90% Asian, female, and under the age of forty. Id. 13 ¶ 103. According to Plaintiff, he suffered adverse employment consequences based on his 14 color, gender, and age, as well as his disability, for which Defendants allegedly failed to 15 provide adequate accommodation. Id. ¶¶ 90, 94-95, 103-104, 115-116. 16 In addition, Plaintiff asserts that he suffered harassment and retaliation based on the 17 aforementioned factors (i.e., his color, gender, age, and disability), as well as for "[his] 18 complaints about [other employees'] misconduct affecting patient safety and care." FAC 19 ¶ 123. Among other allegations of misconduct, Plaintiff claims that Defendants failed to 20 respond to reports of unlawful drug diversion (i.e., theft) and drug furnishing irregularities 21 (i.e., pharmacist errors). Id. ¶ 125. Plaintiff also alleges that Defendants failed to take all 22 reasonable steps to prevent further discrimination and harassment. Id. ¶¶ 133, 135. 23 Finally, Plaintiff alleges that Kaiser engages in unlawful business practices. FAC 24 ¶ 151. According to Plaintiff, Defendants: (1) did not adequately compensate him and 25 others like him; (2) did not allocate sufficient funds for "community benefit expenditures"; 26 and (3) earned profits through 501(c)(3) tax-exempt entities, and then funneled said profits 27 to its related for-profit entities, such as TPMG. Id. ¶¶ 141-157. 28 -2- 5 1 On November 15, 2012, after a purported two-year campaign against Plaintiff by his 2 co-workers, which allegedly included verbal abuse, interference with his work 3 performance, and exacerbation of his health condition, FAC ¶¶ 26-32, Kaiser suspended 4 Plaintiff from work, id. ¶¶ 33-35. Kaiser stated that the suspension "was [a] non-punitive 5 investigation," and reduced Plaintiff's salary by 50%. Id. Plaintiff alleges that Kaiser did 6 not inform him of the reason for the suspension. Id. 7 While suspended, Plaintiff received materials regarding the 2012 Employee Choice 8 Program ("ECP"). FAC ¶ 37. ECP was a "voluntary separation incentive program" that 9 Kaiser offered to various employees in Northern California. Request for Jud. Not. ("RJN"), 10 Ex. 1(A) at p. 2, Dkt. 38. ECP offered eligible employees an opportunity to terminate their 11 employment voluntarily in exchange for severance pay and medical/dental coverage. Id. 12 On December 23, 2012, Plaintiff executed a Separation Agreement and General Release 13 (the "Separation Agreement") to take advantage of ECP. FAC ¶ 38; RJN, Ex. 1 at p. 1, 7.1 14 The Separation Agreement includes a provision entitled "Complete Release of 15 Claims," which released Defendants from all claims of any kind arising out of or related to 16 Plaintiff's employment and/or termination. RJN, Ex. 1 at p. 3. The release 17 includes, but is not limited to, all claims based in tort or contract, or under any federal, state, or local statute, ordinance, or common law, including, but 18 not limited to, the Age Discrimination in Employment Act ["ADEA"], Title 19 VII of the Civil Rights Act ["Title VII"], the Americans with Disabilities Act ["ADA"], the California Fair Employment and Housing Act ["FEHA"], or 20 any claim of discrimination, harassment, breach of contract or public policy, 21 wrongful or retaliatory discharge and all claims for compensation, vacation, attorney's fees, wrongful denial of insurance and employee benefits. 22 Id. Plaintiff's employment terminated effective February 11, 2013, and he received 16 23 weeks of severance pay totaling $45,558.78, plus other benefits. Id. at p. 1-2. 24 25 1 Defendants request that the Court take judicial notice of the Separation Agreement and ECP materials, which are referenced in, but not attached to, the FAC. Plaintiff does not 26 oppose the request. Moreover, although Plaintiff advocates for rescission of the Separation Agreement, he does not dispute its authenticity. Thus, the Court GRANTS Defendants' 27 request for judicial notice. See Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007) (a court may consider a writing referenced in a complaint, but not explicitly incorporated 28 therein, if the complaint relies on the document and its authenticity is unquestioned). -3- 5 1 Plaintiff now alleges that he executed the Separation Agreement under duress, 2 menace, and/or undue influence, and therefore, that he is entitled to rescind the agreement. 3 FAC ¶¶ 67-86. With regard to duress, Plaintiff alleges that several factors--Kaiser's refusal 4 to accommodate his health condition, his suspension (with 50% reduction in pay), and the 5 risk of termination--induced him to sign the Separation Agreement. Id. ¶¶ 69-74. With 6 regard to menace, Plaintiff further alleges that he signed the Separation Agreement "to 7 escape" ongoing harassment and threats that he endured at work and/or from his coworkers. 8 Id. ¶¶ 75-82. Finally, with regard to undue influence, Plaintiff alleges that, because of his 9 health condition and the aforementioned hostile work environment, he suffered a weakness 10 of spirit that rendered him unable to exercise independent judgment when executing the 11 Separation Agreement. Id. ¶¶ 83-86. 12 B. PROCEDURAL HISTORY 13 On April 21, 2015, Plaintiff filed suit against Defendants in state court, alleging 14 claims for: (1) Unlawful Attainment of Invalid Separation Agreement; (2) Age 15 Discrimination in Violation of ADEA and FEHA; (3) Disability Discrimination in 16 Violation of ADA and FEHA; (4) Race, Color, Gender, and National Origin Discrimination 17 in Violation of Title VII and FEHA; (5) Failure to Accommodate Disability; 18 (6) Retaliation; (7) Failure to Prevent Discrimination, Harassment or Retaliation; 19 (8) Unlawful Business Practices; and (9) Constructive Discharge in Violation of Public 20 Policy. Dkt. 1. Defendants removed the instant action to this Court based on federal- 21 question jurisdiction. Id. 22 On June 26, 2015, Defendants filed a motion to dismiss the Complaint, arguing that 23 Plaintiff: (1) failed to allege facts sufficient to support a claim for rescission of the 24 Severance Agreement, and (2) had released all remaining claims under that agreement. 25 Dkt. 6. On December 3, 2015, the Court granted Defendant's motion. Order, Dkt. 32. The 26 Court found that Plaintiff failed to state facts sufficient to support a claim for rescission of 27 the Separation Agreement, which, in turn, barred any cause of action arising out of his 28 employment and termination. The Court further held that, with the exception of the eighth -4- 5 1 cause of action for unlawful business practices, Plaintiff's claims arose entirely out of his 2 employment and termination. With regard to the eighth cause of action, Plaintiff appeared 3 to predicate the claim on violations of both the California Labor Code ("CLC") and the 4 Internal Revenue Code ("IRC"). The Court found that (1) the Separation Agreement served 5 as a bar to Plaintiff's claim insofar as it arose out of alleged CLC violations, and 6 (2) Plaintiff lacked standing to raise the claim insofar as it arose out of alleged IRC 7 violations. The Court granted Plaintiff leave to amend his claims, except for the ninth 8 cause of action for constructive discharge, which is time-barred. 9 On December 16, 2015, Plaintiff filed the operative First Amended Complaint, re- 10 alleging the first through eighth causes of action. Dkt. 33. Thereafter, Defendants filed the 11 instant Motion to Dismiss Plaintiff's Amended Complaint. Dkt. 37. The motion is fully 12 briefed and ripe for adjudication. 13 II. LEGAL STANDARD 14 Rule 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. Block, 250 F.3d 15 729, 732 (9th Cir. 2001). "Dismissal under Rule 12(b)(6) is proper when the complaint 16 either (1) lacks a cognizable legal theory or (2) fails to allege sufficient facts to support a 17 cognizable legal theory." Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013). "Rule 18 12(b)(6) is read in conjunction with Rule 8(a), which requires not only 'fair notice of the 19 nature of the claim, but also grounds on which the claim rests.'" Zixiang Li v. Kerry, 710 20 F.3d 995, 998-99 (9th Cir. 2013) (quoting in part Bell Atl. Corp. v. Twombly, 550 U.S. 21 544, 556 n.3 (2007)). "To survive a motion to dismiss, a complaint must contain sufficient 22 factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" 23 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). 24 In assessing the sufficiency of the pleadings, "courts must consider the complaint in 25 its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) 26 motions to dismiss, in particular, documents incorporated into the complaint by reference, 27 and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & 28 Rights, Ltd., 551 U.S. 308, 322 (2007). The court is to "accept all factual allegations in the -5- 5 1 complaint as true and construe the pleadings in the light most favorable to the nonmoving 2 party." Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d 895, 899-900 (9th Cir. 3 2007). Where a complaint or claim is subject to dismissal, the court generally grants leave 4 to amend, unless further amendment would be futile. Cervantes v. Countrywide Home 5 Loans, Inc., 656 F.3d 1034, 1041 (9th Cir. 2011). 6 III. DISCUSSION 7 A. RESCISSION CLAIM 8 A party to a contract may rescind the same if his or her consent was "obtained 9 through duress, menace, fraud, or undue influence." Cal. Civ. Cod