TIMOTHY M. CAIN, District Judge.
In her complaint, the plaintiff, Temmessia Thurmond ("Thurmond"), alleges that the defendant, Drive Automotive Industries of America, Inc. ("Drive"), violated Title VII of the Civil Rights Act of 1964 by creating a hostile work environment and then retaliating against her when she initiated proceedings under Title VII and internal complaint procedures. (Complaint, ECF No. 1.) In turn, pursuant to certain contracts between the two parties, Drive has brought an action for contribution and indemnification against third party defendant, Employ Bridge of Dallas, Inc., and Staffing Solutions Southeast, Inc., d/b/a Resource Mfg. ("Resource") for liability to Thurmond. (Third Party Complaint, ECF No. 22.) Resource has moved to dismiss the third party complaint and that motion has been fully briefed by both parties. (ECF Nos. 32, 34, 39.)
Pursuant to 28 U.S.C. § 636(b)(1)(A) and Local Rule 73.02(B)(2)(g), D.S.C., all pre-trial matters have been referred to a magistrate judge. This case is now before the court on the magistrate judge's Report and Recommendation ("Report"), recommending that the court grant Resource's motion to dismiss. (ECF No. 42.) The magistrate judge's recommendation has no presumptive weight and this court retains the responsibility to make a final determination. See Mathews v. Weber, 423 U.S. 261, 270-71, 96 S.Ct. 549, 46 L.Ed.2d 483 (1976). The court is charged with making a de novo determination of those portions of the Report to which a party specifically objects, and the court may accept, reject, or modify, in whole or in part, the magistrate judge's recommendation or recommit the matter with instructions. See 28 U.S.C. § 636(b)(1).
Drive timely objected, asserting that the Report is "incorrect as a matter of law and is premature." (Objections, ECF No. 43.) Resource has responded to Drive's objections (ECF No. 45) and this matter is now ripe for review.
I. Factual Background
Thurmond and her alleged harasser were both employed at Drive through Resource, a staffing agency. Resource and Drive had two contracts containing indemnity clauses: the Agreement and Purchase Order. Under both, Resource and Drive agreed to indemnify each other for each company's own violations of federal law. In addition, the Agreement establishes that Resource is the employer of each of its employees and retains certain responsibilities with regard to management, including decisions about discipline and termination. Drive alleges that, under these agreements, Resource is responsible for all costs of defense, including attorneys' fees, and damages incurred by Drive as a result of this lawsuit. Resource contends that the contract does not contemplate contribution and that indemnification would be
II. Legal Standard
Under the federal rules, each pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Accordingly, pursuant to Federal Rule of Civil Procedure 12(b)(6), a claim should be dismissed when the complaint fails to allege facts upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). When considering a motion to dismiss, the court should "accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff." Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993). However, "the pleading standard ... demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Thus, the rules require more than "labels and conclusions," "a formulaic recitation of the elements of a cause of action," or "naked assertions devoid of further factual enhancement." Id. at 678, 129 S.Ct. 1937.
In sum, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Id. (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). And, for a claim to have facial plausibility, the plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955).
Under this standard, the court must dismiss the third party complaint. This action is not about any wrongdoing on the part of Resource. Thurmond brought her complaint against Drive, and only Drive.
In its objections, Drive contends that the magistrate judge did not consider cases cited in support of the indemnity and contribution provisions. The court has faith that the magistrate judge properly considered all relevant authority, but will address Drive's objection. The court has reviewed every case Drive cites in its objections and briefing on Resource's motion to dismiss and finds that all of them are distinguishable on the same central point — in every case the plaintiff sued both parties to the contract at issue. See Gibbs-Alfano v. Burton, 281 F.3d 12, 15 (2d Cir.2002) (plaintiff originally brought suit against both the boat club and the
In addition, the court agrees with the magistrate judge and finds EEOC v. Blockbuster, No. RWT 07cv2612, 2010 WL 290952 (D.Md. Jan. 14, 2010), instructive and persuasive. The facts in Blockbuster are similar to those in this case, the contract language at issue is almost identical, and the decision is by a district court within the Fourth Circuit applying Fourth Circuit law as much as possible to an issue of first impression. The magistrate judge's consideration of Blockbuster was certainly not "misplaced," as Drive suggests, but was necessary to his analysis of this case.
For the foregoing reasons and after a thorough review of the record, the court adopts the Report and incorporates it herein. Resource's motion to dismiss the third party complaint (ECF No. 32) is, therefore, granted.
REPORT OF MAGISTRATE JUDGE
KEVIN F. McDONALD, United States Magistrate Judge.
This matter is before the court on the third party defendants' motion to dismiss the third party complaint (doc. 32). In her complaint, the plaintiff alleges claims for sex discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964, as amended. Pursuant to the provisions of Title 28, United States Code, Section 636(b)(1)(A), and Local Civil Rule 73.02(B)(2)(g) DSC, all pretrial matters in employment discrimination cases are referred to a United States Magistrate Judge for consideration.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff Temmessia Thurmond filed a complaint against Drive Automotive Industries, Inc. ("Drive") in the Court of Common Pleas, County of Greenville, South Carolina, on August 21, 2012. Drive removed the case to this court on September 24, 2012. The complaint asserts that the plaintiff suffered sexual harassment and retaliation while she was employed with Drive (doc. 1-1, comp. ¶¶ 1, 13, 17). The plaintiffs complaint against Drive asserts two counts under Title VII. Count I asserts a claim against Drive for hostile work environment, alleging that Drive "intentionally discriminated against Plaintiff on the basis of her sex" (id. ¶ 12), and "created, tolerated, and condoned conduct that was severe or pervasive towards Plaintiff on account of her sex" (id. ¶ 13). In Count II, the plaintiff asserts that
Drive filed a third party complaint against EmployBridge and Staffing Solutions (collectively "Resource" or "the third party defendants") on January 17, 2013. Resource operates a staffing agency that placed certain employees with Drive to provide services in support of Drive's manufacturing business (doc. 22, 3rd party comp. ¶ 4). The plaintiff was assigned by Staffing Solutions to provide services at Drive (id. ¶ 9).
In the third party complaint, Drive contends that it operated with Resource pursuant to an Agreement and a Purchase Order (id. ¶ 5). The Agreement states in pertinent part:
(Doc. 22-1, 3rd party comp., ex. A ¶ 12).
(Id. ¶ 13(a)). The Agreement goes on to provide:
(Id. ¶ 13(c)).
The Purchase Order, through the Terms and Conditions incorporated therein, states that Resource agrees to indemnify
Drive asserts two theories for its claims against Resource in the third party complaint: contribution and indemnity. In Count I, Drive asserts that Resource is "obligated to reimburse and is liable to Drive for all or any liability ... assessed [against Drive] by way of contribution" (doc. 22, 3rd party comp. ¶ 15). In Count II, Drive asserts that pursuant to the "indemnity provisions in the Agreement and Purchase Order Terms and Conditions, Resource is liable to Drive for all costs of defense, including attorneys' fees and damages incurred by Drive in connection with the present lawsuit, and for all alleged damages by Plaintiff, including wages, attorneys' fees, and costs" (id. ¶ 19). Drive alleges in the third party complaint that the plaintiffs complaint "is premised upon alleged sexual misconduct by another Temporary Worker of Resource placed at Drive (id. ¶ 11). Drive further alleges that Resource at all times remained the sole and exclusive employer of the Temporary Workers it placed with Drive, and Resource made all personnel decisions with respect to the plaintiff, including the decision to terminate her employment (id. ¶¶ 14, 12).
APPLICABLE LAW AND ANALYSIS
Federal Rule of Civil Procedure 12(b)(6) permits a party to move for dismissal if the opposing party fails to state a claim for which relief can be granted. Federal Rule of Civil Procedure 8(a) sets forth a liberal pleading standard, which requires only a "`short and plain statement of the claim showing the pleader is entitled to relief,' in order to `give the defendant fair notice of what ... the claim is and the grounds upon which it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). "To survive a Rule 12(b)(6) motion to dismiss, the facts alleged `must be enough to raise a right to relief above the speculative level' and must provide `enough facts to state a claim to relief that is plausible on its face.'" Robinson v. American Honda Motor Co., Inc., 551 F.3d 218, 222 (4th Cir.2009) (quoting Twombly, 550 U.S. at 555, 569, 127 S.Ct. 1955). When determining a motion to dismiss pursuant to Rule 12(b)(6), the court must take all well-pled material allegations of the complaint as admitted and view them in the light most favorable to the non-moving party. De Sole v. U.S., 947 F.2d 1169, 1171 (4th Cir.1991) (citing Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 23 L.Ed.2d 404 (1969)).
Resource argues in the instant motion that Drive's contribution claim should be dismissed because there is no express or implied right to contribution under Title VII and there is no common law right to contribution in a Title VII action. In Northwest Airlines, Inc. v. Transport Workers Union of America, AFL-CIO, 451 U.S. 77, 101 S.Ct. 1571, 67 L.Ed.2d 750 (1981), the United States Supreme Court held that there is no express or implied right of contribution under Title VII. Id. at 91-94, 101 S.Ct. 1571. The Court also held that there can be no federal common law right to contribution regarding Title VII violations, as the remedies set forth by Congress in Title VII are the exclusive remedies available under the statute, and
Drive argues in response that it "is not asserting a claim for contribution based upon any implied rights — Drive ... is asserting a claim for contribution based in express contract" (doc. 34, Drive resp. at p. 6). However, "[t]he doctrine of contribution does not rest upon contract but upon general principles of equity and natural justice; and the right arises when one has been compelled to pay more than his share of a common obligation which several persons are bound to discharge." American Emp. Ins. Co. v. Maryland Cas. Co., 218 F.2d 335, 338 (4th Cir.1954). Drive offers no authority to the contrary (see doc. 34, Drive resp.). Furthermore, Drive's third party complaint does nor allege the existence of a contractual contribution term (see doc. 22, 3rd party comp. ¶¶ 14-15). In its argument in opposition to the motion to dismiss, Drive cites provisions in the Agreement and Purchase Order "containing warranties, guarantees, and indemnification provisions, in favor of both Drive ... and Resource" (doc. 34, Drive resp. at p. 6) (emphasis omitted), but fails to cite to any provision regarding contribution. As argued by Resource, this is for good reason, as the Agreement and Purchase Order reference indemnification several times, as set forth above, but do not contain any reference to contribution (see generally docs. 22-1, 22-3).
Drive argues that "the other cases cited by Resource in support of dismissal of the contribution claim are similarly based upon any implied rights under federal statutory or common law and do not involve a contractual provision for contribution" (doc. 34, Drive resp. at p. 7). As the Agreement and Purchase Order at issue here also "do not involve a contractual provision for contribution," the cases cited by Resource are perfectly applicable. In a Title VII case also involving an employer's attempt to assert a third party complaint against its staffing company, the court held that the third party claim for contribution failed as a matter of law. EEOC v. Blockbuster Inc., No. RWT 07cv2612, 2010 WL 290952, at *2 (D.Md. Jan. 14, 2010). Like Drive, the third party plaintiff in Blockbuster sought to assert a claim for contribution in a Title VII case based on indemnity language in the underlying contract. The court recognized that "indemnification and contribution are not the same. Indemnification shifts the entire loss from one wrongdoer to another while contribution distributes losses among wrongdoers by requiring each to pay his proportionate share." Id. The court found that the staffing services agreement "contains provisions for indemnification, not contribution." Id. at *2. Thus, the court "refuse[d] to read any right to contribution under this section or any other section of the Services Agreement" and found that the "claim for contribution is without merit because the Services Agreement contemplates indemnification only...." Id, at *2, *4.
As there is no express or implied right to contribution under Title VII and no common law right to contribution in a Title VII action, and as the contract between Drive and Resource contemplates indemnification only, Resource's motion to dismiss Count I of the third party complaint should be granted.
Resource next argues that Drive's claim for contractual indemnification is preempted by Title VII and federal public policy, noting that the Fourth Circuit "has repeatedly rejected attempts by parties to invoke state law to seek indemnity for
Drive argues in response that it is not trying "to shift the entire liability for its `wrongdoing' to another party," and thus the cases cited by Resource are inapposite (doc. 34, Drive resp. at p. 9). However, as stated by the district court in Archstone Smith Trust when presented with the same argument, "that is exactly what indemnity means." 603 F.Supp.2d at 825.
In EEOC v. Blockbuster, discussed above with regard to the contribution claim, the EEOC brought suit against an employer alleging unlawful employment practices in violation of Title VII. 2010 WL 290952, at *1. Like Drive, the employer/defendant (Blockbuster) filed a third party complaint against its staffing company, which had provided temporary workers. Blockbuster claimed that its contract with the staffing company included an indemnity clause, and thus it asserted a third party claim for contractual indemnity against the staffing company. Id. at *l-2. Just like Drive, Blockbuster claimed that "if it is found to be liable in whole or in part to the Plaintiff EEOC, then pursuant to the contractual relationship ..., [the staffing company] is liable for indemnification to Blockbuster for any liability on its part to the EEOC." Id, at *1. The court granted the staffing company's motion for judgment on the pleadings on the indemnification claim because the contractual indemnity provision was void as against public policy and preempted by Title VII. Id. at *2. Blockbuster filed a motion for reconsideration, arguing, like Drive in this case, that it sought indemnification "for the subcontractor's misconduct, as opposed to any alleged misconduct of Blockbuster." Id,
2010 WL 290952, at *4. The Blockbuster case is directly on point, and the under-signed finds the court's reasoning persuasive. Based upon the foregoing, Count II of the third party complaint should be dismissed as it is preempted by Title VII.
CONCLUSION AND RECOMMENDATION
Wherefore, based upon the foregoing, the third party defendants' motion to dismiss (doc. 32) should be granted.
IT IS SO RECOMMENDED.
June 25, 2013, Greenville, South Carolina.