SAFONOF v. DIRECTSAT USA, No. 1:2019cv07523 - Document 44 (D.N.J. 2020)
Court Description: OPINION. Signed by Judge Joseph H. Rodriguez on 12/3/2020. (tf, )
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SAFONOF v. DIRECTSAT USA Doc. 44 Case 1:19-cv-07523-JHR-AMD Document 44 Filed 12/03/20 Page 1 of 10 PageID: 365 U N ITED STATES D ISTRICT COU RT D ISTRICT OF N EW JERSEY : FEDOR SAFONOF, : : Plaintiff, : Hon. J oseph H. Rodriguez : v. : Civil Action No. 19-0 7523 : DIRECTSAT USA, SUBSIDIARY OF : UNITEK GLOBAL SERVICES, INC. : OPIN ION : Defendant. : This m atter is before the Court on Defendant’s Motion to Dism iss Plaintiff’s Am ended Com plaint for failure to state a claim under the New J ersey Conscientious Em ployee Protection Act. For reasons that follow, Defendant’s Motion to Dism iss will be denied. I. FACTU AL BACKGROU N D AN D PROCED U RAL H ISTORY This is the second tim e the Court considers whether Plaintiff’s Com plaint sufficiently sets forth claim s under the New J ersey’s Conscientious Em ployee Protection Act, N.J . Stat. Ann. § 34:19-1, et seq., (“CEPA”). In an Opinion and Order issued on March 31, 20 20 , the Court agreed with Defendant that Plaintiff’s Com plaint failed to state a claim because it did not properly establish the first elem ent of the prim a facie case; nam ely that Plaintiff reasonably believed that his em ployer’s conduct violated a law, rule, or regulation. Specifically, Defendant argued that the Com plaint neither alleged the specific statutory provisions Plaintiff believed Defendant violated, nor dem onstrated a substantial nexus between Defendant’s conduct and the supposed violations. (Id. at 811.) As a result, the Motion to Dism iss granted with leave to am end the Com plaint. [Dkt. 1 Dockets.Justia.com Case 1:19-cv-07523-JHR-AMD Document 44 Filed 12/03/20 Page 2 of 10 PageID: 366 No. 35 at 7-10 .] Plaintiff tim ely filed an Am ended Com plaint [Dkt. No. 38] and the present m otion followed. [Dkt. No. 39.] Defendant raises the identical issues considered in the first m otion to dism iss and argues that Plaintiff’s Am ended Com plaint be dism issed with prejudice for failure to state a claim pursuant to Fed. R. Civ. P. 12 (b)(6). II. STAN D ARD OF REVIEW Federal Rule of Civil Procedure 12(b)(6) allows a party to m ove for dism issal of a claim based on “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A com plaint should be dism issed pursuant to 12(b)(6) if the alleged facts, taken as true, fail to state a claim. Fed. R. Civ. P. 12(b)(6). It is not necessary for the plaintiff to plead evidence. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 446 (3d Cir. 1977). The question before the Court is not whether the plaintiff will ultim ately prevail. Watson v. Abington Twp., 478 F.3d 144, 150 (20 0 7). Instead, the Court sim ply asks whether the plaintiff has articulated “enough facts to state a claim of relief that is plausible on its face.” Bell Atl. Corp. v. Twom bly, 550 U.S. 544, 570 (20 0 7). “A claim has facial plausibility 1 when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9) (citing Twom bly, 550 U.S. at 556). Nevertheless, the Court need not accept “unsupported conclusions of unwarranted inferences,” Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 20 0 7) 1 This plausibility standard requires m ore than a m ere possibility that unlawful conduct has occurred. “When a com plaint pleads facts that are ‘m erely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of ‘entitlem ent to relief.’” Id. 2 Case 1:19-cv-07523-JHR-AMD Document 44 Filed 12/03/20 Page 3 of 10 PageID: 367 (citation om itted), however, and “[l]egal conclusions m ade in the guise of factual allegations…are given no presum ption of truthfulness,” Wyeth v. Ranbaxy Labs., Ltd., 448 F. Supp. 2d 60 7, 60 9 (D.N.J . 20 0 6) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)); see also Kanter v. Barella, 489 F.3d 170 , 177 (3d Cir. 20 0 7) (quoting Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 20 0 5) (“[A] court need not credit either ‘bald assertions’ or ‘legal conclusions’ in a com plaint when deciding a motion to dism iss.”)). Further, although “detailed factual allegations” are not necessary, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlem ent to relief’ requires m ore than labels and conclusions, and a form ulaic recitation of a cause of action’s elem ents will not do.” Twom bly, 550 U.S. at 555 (internal citations om itted); see also Iqbal, 556 U.S. at 678. Thus, a m otion to dism iss should be granted unless the plaintiff’s factual allegations are “enough to raise a right to relief above the speculative level on the assum ption that all of the com plaint’s allegations are true (even if doubtful in fact).” Twom bly, 550 U.S. at 556. Furtherm ore, Rule 9(b) provides that “[i]n alleging fraud or m istake, a party m ust state with particularity the circum stances constituting fraud or m istake. Malice, intent, knowledge, and other conditions of a person’s m ind m ay be alleged generally.” Fed. R. Civ. P. 9(b). Pursuant to Rule 9(b), a plaintiff m ust plead “with particularity ‘the circum stances of the alleged fraud in order to place the defendants on notice of the precise m isconduct with which they are charged, and to safeguard defendants against spurious charges of im m oral and fraudulent behavior.’” Lum v. Bank of Am ., 361 F.3d 217, 223-24 (3d Cir. 20 0 4) (quoting Seville Indus. Mach. Corp. v. Southm ost Mach. Corp., 742 F.2d 786, 791 (3d Cir. 1984)). 3 Case 1:19-cv-07523-JHR-AMD Document 44 Filed 12/03/20 Page 4 of 10 PageID: 368 There are two ways to satisfy the particularity requirem ent. See Lum , 361 F.3d at 224. First, a plaintiff m ay plead the “date, place or tim e” of the fraudulent act. Id. (quoting Seville, 742 F.2d at 791) (internal quotations om itted). Second, a plaintiff m ay use “alternative m eans [to] inject [] som e m easure of substantiation into their allegations of fraud.” Id. (internal quotations om itted). Still, the plaintiff m ust plead enough to substantiate the allegations of fraud being m ade and m ay not rely on “conclusory statem ents.” NN&R, Inc. v. One Beacon Ins. Group, 362 F. Supp. 2d 514, 518 (D.N.J . 20 0 5) (quoting Mordini v. Viking Freight, Inc., 92 F. Supp. 2d 378, 385 (D.N.J . 1999)). At a m inim um , a plaintiff “m ust allege who m ade a m isrepresentation to whom and the general content of the m isrepresentation.” Lum , 361 F.3d at 224. Significantly, the heightened pleading standard required by Rule 9(b) applies to claim s of fraud brought under New J ersey law. Frederico v. Hom e Depot, 50 7 F.3d 188, 20 0 (3d Cir. 20 0 7). III. D ISCU SSION As set forth in the Court’s Opinion of March 31, 20 20 , New J ersey resident Fedor Safonof (“Plaintiff”) brings this action under the CEPA against his form er em ployer, DirectSat USA (“Defendant”), for negative em ploym ent action taken against him after his refusal to com ply with his m anager’s allegedly illegal schem es. [Dkt. No. 1-A, Ex. A (Com pl.).] Defendant is a cable com pany that supplies DirecTV custom ers with services such as installations and repairs. Plaintiff was hired by Defendant in 20 12 as a field supervisor. He worked in the Pennsauken location, and consistently m et em ploym ent expectations until 20 17. (Id.) 4 Case 1:19-cv-07523-JHR-AMD Document 44 Filed 12/03/20 Page 5 of 10 PageID: 369 In October 20 17, J ose Gonzalez becam e Plaintiff’s general m anager. (Id. at ¶ 4.) Gonzalez was supposedly hired to com bat what the com pany called “Sin30 s,” or repeat custom er com plaints received within thirty days of the initial service. (Id. at ¶ 5.) Plaintiff alleges that to accom plish this goal, Gonzalez accessed custom ers’ account inform ation without their consent, and transferred it to a spreadsheet on his personal laptop. (Id. at ¶¶ 6-8.) He used that inform ation to cancel “Sin30 s.” (Id. at ¶ 8 .) On a separate com pany calendar, Gonzalez then assigned supervisors, like Plaintiff, to handle the repairs, requiring them to send technicians out to com plete the job off the record. (Id. at ¶¶ 8-9.) The technicians were not paid because after Gonzalez’s tam pering, no physical record of the technician’s work order existed for the technician to bill. (Id. at ¶ 10 .) Without their consent, Gonzalez also transferred custom ers’ phone num bers from Defendant’s online database into a m ass-texting application called “Texedly,” from which he texted custom ers about their service, apparently to prevent any “Sin30 ” appointm ents from being created. (Id. at ¶ 11). Plaintiff inform ed Gonzalez that he objected to this behavior and believed that it was unlawful. (Id. at ¶ 13.) Gonzalez eventually instructed his subordinates, including Plaintiff, to directly participate in cancelling appointm ents. (Id. at ¶ 14.) Plaintiff refused and called a Hum an Resources m anager, “Kathy,” to com plain about Gonzalez’s behavior, but was instructed to address the issue with Gonzalez directly. (Id. at ¶¶ 15, 37.) Plaintiff alleges that im m ediately following his com plaint, Gonzalez began subjecting him to retaliatory discipline and harassm ent, culm inating in his ultim ate term ination. (Id. at ¶ 16.) The Court found that the original com plaint was deficient in that it lacked factual specificity to establish a substantial nexus between the alleged conduct and the 5 Case 1:19-cv-07523-JHR-AMD Document 44 Filed 12/03/20 Page 6 of 10 PageID: 370 supposed violations. The original Com plaint did not plainly specify the ways in which the law was violated and included “a laundry list” of nine statutes followed by the conclusory statem ent that Defendant’s actions violated all of them as well as com m on law fraud. The Com plaint did not sufficiently link Gonzalez’s behavior to the offenses or describe the statutes in any way and failed to identify the public harm caused or public policy violated. The m otion to dism iss was granted with leave to am end the com plaint. Defendants claim that Plaintiff’s Am ended Com plaint again falls short of establishing a prim a facie case under the CEPA because it does not sufficiently allege that he had a reasonable belief that the alleged schem e was a violation of law, rule, or regulation with requisite factual detail. The Court disagrees. CEPA was enacted to encourage em ployees to report unethical or illegal activity in the workplace and protect those who do from an em ployer’s retaliation in response. Dzwonar v. McDevitt, 177 N.J . 451, 462 (20 0 3). Under the CEPA, “[an] em ployer shall not take any retaliatory action against an em ployee because the em ployee…[o]bjects to, or refuses to participate in any activity, policy or practice which the em ployee believes (1) is in violation of a law, or a rule or regulation prom ulgated pursuant to law…; (2) is fraudulent or crim inal…; or (3) is incom patible with a clear m andate of public policy concerning the public health, safety, or welfare or (3) is incom patible with a clear m andate of public policy concerning the public health, safety, or welfare or protection of the environm ent.” N.J . Stat. Ann. § 34:19-3(c). To m eet the burden of establishing a prim a facie case pursuant to N.J .S.A. 34:193c, a plaintiff m ust show that “(1) he or she reasonably believes that his or her 6 Case 1:19-cv-07523-JHR-AMD Document 44 Filed 12/03/20 Page 7 of 10 PageID: 371 em ployer's conduct was violating either a law, rule, or regulation prom ulgated pursuant to law, or a clear m andate of public policy; (2) he or she perform ed a “whistle-blowing” activity described in N.J .S.A. 34:19– 3c; (3) an adverse em ploym ent action was taken against him or her; and (4) a causal connection exists between the whistle-blowing activity and the adverse em ploym ent action. Dzwonar, 177 N.J . at 462. Under the first prong, a plaintiff m ust identify a “statute, regulation, rule, or public policy that closely relates to the com plained-of conduct.” Id. at 463. The New J ersey Suprem e Court and the lower courts agree that when the plaintiff fails to provide such law or public policy, the trial court should enter judgm ent in favor of the defendant. Id.; see also Mayorga v. Sonoco Prods. Co., Civil Action No. 3:12-cv-0 50 67, 20 13 WL 1792554, at *5 (D.N.J . April 16, 20 13) (dism issing plaintiff’s Com plaint for failure to plead sufficient facts alleging a violation of law). However, a plaintiff who brings a claim pursuant to this statute need not show that his or her em ployer actually violated the law or a clear m andate of public policy. Dzwonar, 177 N.J . at 463. Rather, the plaintiff m ust dem onstrate that he or she “reasonably believes” that a law or public policy was violated. Id.; see also Robert v. Autopart Int’l, Civil Action No. 3:14-cv-0 7266, 20 15 WL 40 31740 (D.N.J . J une 30 , 20 15). In order to evaluate the plaintiff’s claim s, the trial court m ust m ake a threshold determ ination that there is a substantial nexus between the com plained-of conduct and a law or public policy identified by the court or the plaintiff. Tegler v. Glob. Spectrum , 291 F. Supp. 3d 565, 581 (D.N.J . 20 18). A “substantial nexus” is defined as a close relationship between the alleged m isconduct and the law or public policy. Id. 7 Case 1:19-cv-07523-JHR-AMD Document 44 Filed 12/03/20 Page 8 of 10 PageID: 372 The Court directed Plaintiff to include the specific provisions of laws violated com m ensurate with explanations of the potentially violated statutes; the Am ended Com plaint m eets that directive. See Am . Com pl., ¶¶ 63-117. Plaintiff sufficiently describes Defendants’ conduct, his articulated objections to Gonzales’s directives, and the relationship the objections bear on the tim ing of his discipline and term ination. The Am ended Com plaint goes further than detailing Plaintiff’s m oral objections to the purported “schem e” proffered by Plaintiff- it lays out facts that portend, if believed, unlawful access to custom er accounts by using a false log-in identity, one that was not their own, and m aking designations to the account without the authorization of the custom er for the purpose of bolstering sales perform ance. In paragraphs 63-117 of the Am ended Com plaint, Plaintiff details the actions which he believes support num erous violations of the law, including Identity Theft, N.J .S.A. 56:8-161, 163, the Com puter Fraud and Abuse Act, 18 U.S.C. 10 30 (a)(2)(C), (a)(4), (a)(6)(A), (B), and the Telephone Consum er Protection Act, 47 U.S.C. 5227 (b)(1)(A)(iii). As opposed to the original com plaint, which sim ply listed the statutes and/ or laws violated, the Am ended Com plaint sufficiently ascribes relevant conduct to the alleged violations. Plaintiff claims that Gonzalez would im perm issibly access the personal account inform ation of custom ers through the DirecTV database and then save the inform ation on a spreadsheet he titled "Hot J obs." Am . Com pl., ¶23. Then, Gonzalez m ade a com parison to the upcom ing "Sin" jobs that had been assigned to the DirectSat Pennsauken location. Id. at ¶24. When Gonzalez found a m atch, he would use his schem e to rem ove the "Sin" job and access to the custom er's DirecTV.com portal. Id. at ¶25. Gonzalez also used this inform ation to cancel up-com ing repair work order, or 8 Case 1:19-cv-07523-JHR-AMD Document 44 Filed 12/03/20 Page 9 of 10 PageID: 373 Sin30 , by accessing or creating an unauthorized "Sins" using the custom er's online DirecTV.com account portal without the custom er's consent or knowledge. Id. at ¶¶ 2627. This m ethod gave the im pression that it was the custom er, and not Gonzalez, who cancelled the job. Id. The creation of the "Hot J obs" spreadsheet and im plem entation of the cancellation schem e was required of Plaintiff, but he refused, believing the schem e was unlawful. Id. at ¶27. Plaintiff is not required to dem onstrate that illegal activity occurred; he sim ply m ust show that he believed the conduct to be illegal. He has done that in the Am ended Com plaint. See e.g., ¶¶34, 63-117. Plaintiff also sufficiently establishes a causal tim eline which weaves his objections to Gonzales’ order to engage in the schem e with the disciplinary action he endured and his ultim ate term ination. Plaintiff was never disciplined during his four and half years of em ploym ent until he refused to follow Gonzalez’ schem e. Id. at ¶35. In late Novem ber 20 17, Gonzalez held a m eeting with Plaintiff and two other em ployees, Pierce and Batem an, to advise to access the custom er accounts them selves and gave them a tutorial on accessing the DirecTV database, using Gonzalez's personal login and pass word. Gonzalez showed them how to go to DirecTV.com and create and access the custom ers' online account. At the conclusion of the m eeting, Plaintiff explained to Gonzalez that he was not willing to participate. Shortly thereafter, in Novem ber 20 17, Plaintiff m et with the office adm inistrator "Kathy" and told her he thought he would be fired. Id. at ¶¶36-37. He was fired two m onths later in February 20 18. Finally, the Court rejects Defendants’ argum ent, at this stage, that the violative behavior is still solely of a private and not public concern. The alleged unauthorized 9 Case 1:19-cv-07523-JHR-AMD Document 44 Filed 12/03/20 Page 10 of 10 PageID: 374 access to a custom er’s inform ation and the perform ance of transactions without a custom er’s knowledge and/ or consent are certainly a concern for a public increasingly dependent upon online com m erce. The Am ended Com plaint sufficiently alleges fraudulent conduct, tem poral adverse em ploym ent actions, and requisite specificity to survive Defendants’ m otion to dism iss. Defendants’ m otion to dism iss will be denied. IV. CON CLU SION For the foregoing reasons, Defendant’s Motion to Dism iss for failure to state a claim under the New J ersey’s Conscientious Em ployee Protection Act, N.J . Stat. Ann. § 34:19-1, et seq. is denied. Dated: Decem ber 3, 20 20 s/ J oseph H. Rodriguez Hon. J oseph H. Rodriguez, UNITED STATES DISTRICT J UDGE 10
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