DISABILITY DISCRIMINATION: Preliminary injunction granted halting MHRA proceeding in airline passenger’s complaint of being hassled about his ventilator, Court likely will ultimately find in declaratory action that complaint is preempted by ACAA, no implied private right of action for violations of ACAA as to electronic respiratory devices, and none of passenger’s state claims can survive preemption… Lovell.

Dustin Hankinson was preparing to board a Compass Airlines flight out of Missoula 10/4/11 when a flight attendant thought he was bringing in a prohibited Portable Oxygen Concentrator. A POC is permitted and it was actually a ventilator. She was also wrong in stating that he was required to present a medical release. A Delta CRO was able to correct the misunderstandings and Hankinson was told he could board but he was upset and declined. He filed a complaint with DOT alleging violation of the ACAA and its regulations. Compass apologized by phone and issued him and his companion vouchers for a free flight, suspended all crew members, and terminated both of the flight attendants and disciplined the pilot for failing to intervene. It then created a video, quiz, and questionnaire to teach its employees how to recognize medical devices and interact respectfully with disabled passengers. DOT issued a letter of warning to Compass. Hankinson then filed a complaint with the MHRB. Compass is concerned that he is an MHRC member. It requested a declaratory judgment that the ACAA has completely preempted the field raised by his claims and displaced all state law remedies that he could seek, and moved for a TRO and expedited preliminary injunction 11/15/12. The Court granted the TRO 12/13 and held a hearing on the preliminary injunction.

Compass asserts that regulations relating to electronic respiratory devices constitute a pervasive regulation of a very narrow field, such that Congress left no room for supplementation by state law. Hankinson cites fn. 6 of Summers (ND Cal. 2011) for the proposition that state law claims can co-exist with the ACAA as long as the state law claim uses the same standard of care as required by federal law. Where the carrier has already admitted violating ACAA regulations during the DOT proceeding, his theory would permit him to take the per se violation and collect damages in either the state administrative proceeding or state court.Summers discusses this possibility, disapproving of the Gilstrap (CD Cal. 2011) finding of such state proceedings in conflict with the DOT proceeding and therefore preempted. The Summers footnote was dicta. The actual holdings were that the passenger’s negligence claim for failure to provide assistance in deplaning was preempted by the ACAA and her negligence claim for failure to warn of and cure dangerous conditions was not preempted because no federal regulation addressed this latter claim. The latter claim had little or nothing to do with disability discrimination and was actually a typical tort sounding in negligence and alleging severe physical injuries. The most significant part of the first holding (the preempted ACAA claim) was that “Plaintiff’s claims are preempted by the ACAA and cannot be amended to cure the deficiency.” It is unsurprising that Summers never even discusses whether the plaintiff has a private action under the ACAA because not only is her 1st claim a state law claim, all of her claims are alleged under state laws in a diversity context. Her 2nd claim arose when she tripped on a gap between the plane’s door and a raised platform resulting in surgery and weeks in the hospital. No regulation applied to these allegations of negligent failure to warn of or cure dangerous conditions.

All courts agree that there is no express private right of action pursuant to the ACAA. Congress amended it in 2000 to add the DOT civil enforcement provisions, which courts have interpreted as an indicator that it did not intend a private right of action under the ACAA. Pre-amendment cases must be read in the context ofSandoval (US 2001), which provided that “absent a showing of congressional intent, `a cause of action does not exist and courts may not create one, no matter how desirable that might be as a policy matter, or how compatible with the statute’.” Segalman (ED Cal. 2012) (quoting Sandoval). When Congress added the DOT enforcement provisions to the ACAA it certainly gave no indication that it intended to create a separate implied right of action. There is a strong argument to be made that the opposite is true, and that a subsequent state claim premised on violation of the ACAA regulation serves as an impediment to DOT’s enforcement action, especially when it has obtained an admission of violation by the carrier and resulted in immediate retraining. It is not hard to imagine that if such DOT actions were routinely followed by state cases, the adversarial element would be inserted into the process so that DOT actions would no longer be resolved quickly and would not obtain admissions by carriers or result in immediate corrective measures.

Hankinson’s lawyer attempted to rescue his MHRA claim by stating that there is still something that remains after the ACAA claims are set aside: his claim for emotional distress because, as he stated in his MHRB complaint, the attendant “had a hostile and demeaning attitude towards me, did not look at me while speaking to me, did not inquire about my health or safety, made no efforts to check with airlines to see if I required any clearance.” He also stated in his complaint that “at no time did the flight attendant or captain of the airplane come and inform me that I was welcome to board the plane. At no time did any of the personnel who committed the discrimination express regret or acknowledge the discriminatory nature of their conduct.” This lack of concern and discriminatory intent is emphasized repeatedly, but in each instance the actual discrimination identified is the violation of ACAA regulation. His complaint makes clear that all his allegations of emotional distress are predicated upon the disability discrimination reflected in the ACAA violation. Thus any state claim of NIED, as suggested by his lawyer’s argument, would be a derivative claim based on the ACAA violation, which must also be preempted or it would swallow the preemption. The 1st preliminary injunction factor is met because Compass shows likelihood of success on the merits of its preemption argument.

In granting the TRO the Court conceded that the next prong is somewhat less convincing. Compass argues that it is at risk of immediate & irreparable harm if MHRB is permitted to proceed with Hankinson’s complaint. Indeed, it is facing discovery requests and a deposition in the state proceeding in which Hankinson has filed for a default judgment for Compass’s failure to file a prehearing statement. Clearly the state proceedings will go forward absent an injunction. Given the likelihood of its success on the merits and the fact that it is facing a potential default judgment, it has met the prong requiring a showing of likelihood of irreparable injury. The harm of being forced to defend in a proceeding by an administrative agency lacking jurisdiction may not be remedied by monetary damages.

The 3rd prong — balancing of the equities — favors Compass. If the declaratory judgment is denied, Hankinson’s position will be unchanged (after a minor delay), while being required to defend a preempted federal claim in state administrative proceedings might cause Compass to lose the protection of a federal law to which it may be entitled.

The 4th prong — public interest — causes the Court to consider the important governmental purpose of discouraging all prohibited discrimination under the MHRA. This is a difficult case because it is clear that Hankinson was distressed by the violation of federal regulations and because there appears to be no compensatory scheme to address his distress. Nevertheless, Congress’ goal of discouraging disability discrimination in air transportation has been furthered by the retraining of the Compass employees. The Court must also consider the public interest requirement that the rule of law not be violated and the Supremacy Clause be preserved in a case of conflicting state and federal jurisdiction. It is in the public interest to uphold Congress’ decisions. It is in the public interest to uphold uniformity of federal law as it pertains to safety in air travel (regulation of electronic respiratory devices being one narrow aspect of safety in air travel) and promote the purposes of the ACAA’s enforcement scheme.

It appears likely that this Court will ultimately find that Hankinson’s MHRA complaint is preempted by the ACAA, there is no implied private right of action for violations of the regulations as to electronic respiratory devices, and none of his state claims can survive the preemption. Compass’s motion for expedited preliminary injunction is granted. The parties shall submit a proposed schedule or notify the Court that a scheduling conference is required.

Compass Airlines v. MHRB, 40 MFR 105, 1/7/13.

Christopher Mangen & Daniela Pavuk (Crowley Fleck), Billings, Jeffrey Ellis (Quirk & Bakalor), NYC, and David Hayes (Trans States Holding), Bridgeton, Mo., for Compass; Linda Deola & Brian Miller (Morrison, Motl & Sherwood), Helena, for Intervenor Hankinson.

NONJUDICIAL FORECLOSURE: MERS properly acted as beneficiary’s agent under deed of trust, is not a “beneficiary” under STFA… plausible negligence claim stated by claim that mortgage lenders/servicers breached duties by foreclosing on [Read more…]

ATTORNEY FEES in wrongful premium retention class action settlement reduced from $1,650,408 to $692,881 in light of further analysis of settlement value, not on basis of 60(b)(2) new evidence, but on basis of 60(b)(6) extraordinary circumstances and agreement that fees shall be determined by the Court… Molloy. [Read more…]

INSURANCE/SETTLEMENT/EXPERT: Summary judgment as to rescission of pedestrian/auto settlement release precluded by possible mutual mistake of fact as to back problems not known at time of release… summary judgment for insurer as to medical intoxication, undue [Read more…]

WRONGFUL DISCHARGE: MSC would likely find that courts should consider whether employer was at fault for poor performance… disputed fact issues as to whether employer provided sufficient training, tools, resources to satisfactorily perform preclude summary judgment as to good cause for termination… 90-Day Performance Management Plan, although unique to fired employee, could be found by jury to be personnel policy… jury could find that employer’s alleged perversion of 90-Day Plan constituted violation of Employee Handbook… Molloy.

Delta Dental Ins. hired Douglas Weber 1/22/08 as a sales account executive. He had previously worked for Insurance Coordinators of Montana. It claims that because of the relationship between Delta and ICM, his duties were different from those of other sales account execu

tives, including having some of the duties of an account manager. On 5/24/10 Delta put him on a 90-Day Performance Management Plan which required him to improve performance and communications with ICM or face termination, and indicated that supervisor Jim Dole or Robert Budd of HR would meet with him every 30 days to discuss his progress. Delta provides 10 examples of how he failed to improve, generally that he would not return calls from ICM or follow up with requested information. He claims Delta did not provide tools, training, and resources such as software or adequate account manager training and that neither Dole nor Budd met with him to discuss how he could improve. Delta fired him 10/1/10 because of his “lack of comprehensive and timely communication.” He sued in State Court. Delta removed to this Court. It requests summary judgment and to exclude evidence alleging that it violated the performance plan.

The case raises a novel question that neither the Montana Supreme Court nor his Court has addressed: when an employee fails to satisfactorily perform his duties does the employer have good cause to discharge if the poor performance is the consequence of the employer’s failure to provide sufficient tools, training, or resources? The closest the MSC has come was in Andrews v. Plum Creek Mfg. (Mont. 2001). Plum Creek discharged Andrews, an “invoice production clerk.” Management admitted that her training was minimal, she received no evaluations, there were no written procedures governing her responsibilities, and her performance had generally been “adequate.” However, it removed her from her position because of discrepancies in her record keeping, which she claimed were the result of poor training and no written procedures. Plum Creek argued that it had good cause to discharge her regardless of whether it was at fault because she failed to satisfactorily perform — that the plain language of MCA 39-2-903(5) provides that failure to satisfactorily perform constitutes good cause to discharge, regardless of who is at fault for that failure. The MSC did not have to respond to Plum Creek’s argument because Andrews never conceded that she performed poorly, instead arguing that the record-keeping system was faulty, and therefore she had raised a material fact issue as to her performance that precluded summary judgment. Had the MSC reached Plum Creek’s argument, it likely would have rejected it. The WDA states that an employer has good cause to discharge “based on a failure to satisfactorily perform job duties.” But the grounds must also be “reasonable job-related grounds.” An employer cannot reasonably discharge an employee for poor performance if the employer is at fault for the poor performance. It would be unreasonable for a contractor to hire a worker to help build a house but not give him the tools and then fire him for failing to do his job. A software company that hires a software engineer but fails to provide a computer could not fire him for good cause. In both cases, the worker fails to satisfactorily perform, but termination would be unreasonable when the employer does not provide the opportunity or resources to satisfactorily perform. Unlike the employee in Andrews, Weber takes no issue with Delta’s allegation that he failed to satisfactorily perform, but claims he “was blamed for something that was not his fault.” Delta claims it offered training for the information system conversion; Weber claims his supervisor canceled it with no explanation and that without access to the computer systems he could only solve service problems by contacting other Delta employees in Texas, Georgia, and California. Delta takes issue with the necessity of such support as well as all the other training, tools, and resources that Weber claims he needed, and reasons that he has not produced specific factual allegations that rise to a material fact issue. Given the factual disputes, they must be construed in favor of Weber. Delta’s motion for summary judgment as to good cause is denied.

Weber also insists that Delta violated its written personnel policy. There are 2 documents that might constitute a personnel policy: the Employee Handbook for managers and Weber’s 90-Day Performance Management Plan. Delta argues that his placement on the 90-Day Plan does not involve a discharge and is therefore not relevant to his wrongful discharge claim. Weber responds that Delta’s failure to comply with the plan is what gave rise to the wrongful discharge. Delta argues that its alleged violation of the plan should be excluded from any trial because it is not a written personnel policy. Whether it is a written personnel policy is a question for the jury. “A written personnel policy does not necessarily have to be an employee handbook.” Williams (Mont. 2011); Kearney (Mont. 1994). Under Montana law, whether a document is part of an employer’s written personnel policy is a fact question. Williams. In Williams, an employee argued that a “pre-transfer evaluation form” which determined which employees would be transferred to other facilities constituted a written personnel policy. The MSC did not resolve the question, but concluded that “conflicting inferences could be drawn from [the] evidence and that reasonable persons could conclude that the evaluation form was part of Plum Creek’s written personnel policy.” Consistent with the Employee Handbook for managers, Delta employed a progressive discipline procedure by putting Weber on the 90-Day plan. Delta argues that it is not a written personnel policy because it is not a policy of general applicability to all employees. The pre-evaluation form inWilliams was also unique to Williams, and the MSC concluded that whether it was a written personnel policy was a fact question for the jury. So too here. Delta acknowledges that Weber was fired for failing to comply with the 90-Day Plan, which suggests that it recognized it as part of his progressive discipline. Thus it is inextricably linked to his discharge. Moreover, the handbook for managers states that when it uses progressive discipline it will ensure a “fair method of discipline.” A jury might conclude that Delta violated the plan and thus violated its Employee Handbook when it discharged Weber. Delta insists that the handbook language which requires “a fair method of disciplining employees” is only “aspirational,” and a “fair method” is whatever it considers is fair. That argument is one to make to a jury. The jury will decide whether the process was fair. If it was, Delta has no concern; if it was not, there will be a price to pay, determined by the jury.

Weber v. Delta Dental Ins., 40 MFR 1, 8/9/12.

Donald Jones (Hohenlohe Jones), Helena, for Weber; Gregory Black (Corette, Polhman & Kebe), Butte, and Karen Kruse (Jackson Lewis), Seattle, for Delta.