Neal v. Roche

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
NOV 17 2003
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

VANESSA A. NEAL,

Plaintiff-Appellant,

v. No. 02-6381

DR. JAMES C. ROCHE, Secretary of
the Air Force, U.S. Department of
Defense,

Defendant-Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
(D.C. No. CIV-01-1371-F)

Submitted on the briefs:

Melvin C. Hall of Riggs, Abney, Neal, Turpen, Orbison & Lewis, Oklahoma City,
Oklahoma, for Plaintiff-Appellant.

Robert G. McCampbell, United States Attorney, H. Lee Schmidt, Assistant U.S.
Attorney, Oklahoma City, Oklahoma, for Defendant-Appellee.

Before EBEL , PORFILIO , and McCONNELL , Circuit Judges.

McCONNELL , Circuit Judge.
 Plaintiff Vanessa A. Neal, an African-American, brought this Title VII

action against her employer, the Secretary of the Air Force, contending that the

employer engaged in racial discrimination by selecting a less qualified white

woman to fill a job opening. 1
In response to the employer’s assertion that it

selected the white candidate because of her experience and knowledge, plaintiff

argued that the employer had a concealed motive for its actions: a desire to rescue

the successful white candidate from being laid off. In Randle v. City of Aurora ,

69 F.3d 441 (10th Cir. 1995), we stated that if a plaintiff concedes that the

employer’s stated reason for an adverse employment action is a pretext for a

motive not prohibited by the civil rights laws, the district court may enter

summary judgment for the employer. Id. at 451 n.14. Viewing plaintiff’s

argument as a concession of a nondiscriminatory motive, the district court entered

summary judgment for employer. We must determine whether the district court

correctly applied Randle under the circumstances of this case.

1
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.

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 FACTS

Although the record does not include a copy of plaintiff’s complaint, the

district court summarized it as follows:

This action involves a claim of race discrimination brought by
plaintiff Vanessa A. Neal, an African American, against Dr. James G.
Roche, Secretary of the Air Force. The undisputed facts establish
that at the time the dispute arose, plaintiff was employed as a
medical data technician at Tinker Air Force Base. Plaintiff failed to
receive a promotion to the job of budget analyst when Captain
Lisa L. Jameson ultimately selected another employee, Betty Norton,
a white woman who was then employed as a purchasing agent at the
base, to fill the job of budget analyst. Alleging discriminatory
treatment as a result of race discrimination, plaintiff brings her
claims under 42 U.S.C. § 2000e et seq. , (Title VII).

Aplt. App. at 134.

Plaintiff relies on circumstantial evidence to establish her Title VII claim.

Title VII claims based on circumstantial evidence are governed by the

burden-shifting framework laid out in McDonnell Douglas Corp. v. Green ,

411 U.S. 792 (1973). See Garrett v. Hewlett-Packard Co. , 305 F.3d 1210, 1216

(10th Cir. 2002). This three-step analysis first requires the plaintiff to prove a

prima facie case of discrimination. Id. If plaintiff establishes a prima facie case,

the burden shifts to the defendant to produce a legitimate, nondiscriminatory

reason for its actions. Id. “If the defendant does so, the plaintiff must either

show that his race, age, gender, or other illegal consideration was a determinative

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factor in the defendant’s employment decision, or show that the defendant’s

explanation for its action was merely pretext.” Id.

The district court found that plaintiff had put forth evidence sufficient to

establish her prima facie case of disparate treatment. Aplt. App. at 135. It

further found that defendant had advanced a legitimate, nondiscriminatory reason

for his action: “Capt. Jameson selected the selectee because of her experience as a

purchasing agent, her knowledge of the cost centers and the process through

which a major portion of the hospital budget is spent.” Id. (quoting defendant’s

brief, Aplt. App. at 9).

Since the employer advanced a nondiscriminatory reason for not promoting

plaintiff into the position she sought, the burden shifted back to plaintiff to show

that the employer’s reason was pretextual, i.e., unworthy of belief. Plaintiff made

several arguments concerning pretext. She presented evidence that Norton took a

demotion (but not a pay cut) to obtain the position. Id. at 124. She argued that

the Merit Promotion Certificate issued in connection with the decision showed

that plaintiff had a bachelor’s degree, while Betty Norton had only an associate’s

degree. Id. at 132. She further contended that, contrary to her employer’s

assertions, Captain Jameson (the officer who did the hiring) knew her personally,

id. at 118, and therefore knew of her race, prior to the promotion decision.

Plaintiff also asserted that she was not notified of the final selection, as required

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by departmental procedures. Id. at 99. Finally, plaintiff claimed that Captain

Jameson “doctored” the Merit Promotion Certificate to make it appear that Ellen

Braham (who had both a bachelor’s degree and purchasing agent experience)

would have been her first choice, when in fact Captain Jameson knew that

Braham had already obtained another position. Id.

The district court did not explicitly determine whether this evidence

undermined the employer’s stated reason for denying plaintiff the promotion.

Instead, using an analysis not argued for by defendant, the district court focused

on statements plaintiff had made that suggested that the employer had a hidden,

but nondiscriminatory motive for its actions: to save the white candidate, Betty

Norton, from a layoff. The district court summarized plaintiff’s statements as

follows:

[D]efendant’s stated reason for hiring Betty Norton instead of
plaintiff is pretextual; defendant’s stated reason is pretextual because
defendant did not actually hire Betty Norton as budget analyst due to
Betty Norton’s experience as defendant claims; rather, defendant
hired Betty Norton as budget analyst because defendant was
protecting employment for Betty Norton, who was otherwise subject
to being laid off as part of a reduction in force which was occurring
as military jobs were being moved to civilian status.

Id. at 138.

Relying on these statements, the district court found that plaintiff had

conceded that her employer’s true motive was not discriminatory. For this reason,

it granted summary judgment for the employer.

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 ANALYSIS

Summary judgment is appropriate if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as
a matter of law. We review a grant of summary judgment de novo ,
applying the same standard as the district court. We examine the
record to determine whether any genuine issue of material fact was in
dispute; if not, we determine whether the substantive law was applied
correctly, and in so doing we examine the factual record and
reasonable inferences therefrom in the light most favorable to the
party opposing the motion. However, where the non moving party
will bear the burden of proof at trial on a dispositive issue that party
must go beyond the pleadings and designate specific facts so as to
make a showing sufficient to establish the existence of an element
essential to that party’s case in order to survive summary judgment.

Sealock v. Colorado , 218 F.3d 1205, 1209 (10th Cir. 2000).

In granting summary judgment for defendant, the district court relied on a

footnote in Randle , 69 F.3d 441. Randle established the general rule that in cases

where the employer advances a legitimate, non-discriminatory reason for an

employment action, the plaintiff may survive summary judgment by showing that

the employer’s asserted reason was pretextual. Id. at 451. The plaintiff does not

have to come forward with additional, direct evidence of a discriminatory motive

(sometimes referred to as “pretext plus”). Id. There is a significant exception,

however:

Of course, in the unlikely event that the plaintiff concedes that the
real, albeit concealed, reason for the employment decision was a
motive that itself is not prohibited under the civil rights laws, the

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 plaintiff would remain vulnerable to summary judgment because the
plaintiff’s concession of a lawful motive would take the issue of
motive from the jury and preclude the inference of a discriminatory
motive that the jury could otherwise draw from the fact of pretext.
For example, if a defendant stated that the plaintiff was fired for
unexcused absences and the plaintiff offered evidence that reason
was pretextual and contended instead that he or she was really fired
because the boss wanted to make that job available to his or her
spouse, the defendant would be entitled to summary judgment
because of plaintiff’s concession that the true reason was not a
prohibited discriminatory reason, even if it was concealed.

Id. at 451 n.14.

Before applying this exceptional rule to our case, we must consider two

threshold issues: (1) whether Randle footnote fourteen is dicta, and (2) whether

the district court deprived the plaintiff of due process by applying the Randle

footnote sua sponte. We conclude that neither the dicta rule nor due process

prevents application of footnote fourteen here.

1. Status of Randle footnote fourteen

“[A] panel of this [c]ourt is bound by a holding of a prior panel of this

[c]ourt but is not bound by a prior panel’s dicta .” Bates v. Dep’t of Corr. ,

81 F.3d 1008, 1011 (10th Cir. 1996). Plaintiff argues that Randle footnote

fourteen is dicta, because it was not essential to the holding in the case where it

appeared. Regardless of whether the footnote was dicta at the time it appeared, it

is no longer. It has been adopted, and arguably extended, in at least one

subsequent Tenth Circuit case. See Marx v. Schnuck Mkts., Inc. , 76 F.3d 324, 328

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(10th Cir. 1996). We also note that the Supreme Court recently adopted an

analysis, in the context of a Fed. R. Civ. P. 50 motion for judgment as a matter of

law, that bolsters our use of footnote fourteen. The Court stated:

Certainly there will be instances where, although the plaintiff has
established a prima facie case and set forth sufficient evidence to
reject the defendant’s explanation, no rational factfinder could
conclude that the action was discriminatory. For instance, an
employer would be entitled to judgment as a matter of law if the
record conclusively revealed some other, nondiscriminatory reason
for the employer’s decision [.]

Reeves v. Sanderson Plumbing Prods., Inc. , 530 U.S. 133, 148 (2000) (emphasis

added). We conclude that the Randle footnote is not dicta, and is binding on this

panel.

2. Due process concerns

The district court raised the Randle issue sua sponte. We must consider

whether in doing so the district court deprived plaintiff of the opportunity to rebut

its conclusion that she had conceded her case.

In particular, we are concerned with whether Bell v. AT&T , 946 F.2d 1507

(10th Cir. 1991), dictates a remand in these circumstances. In Bell , the employer

advanced a nondiscriminatory reason for laying off the African-American

plaintiff: employees terminated in a reduction-in-force had been grouped in

accordance with seniority. The plaintiff punctured this explanation by showing

that at least one less-qualified white employee had been excluded from the

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grouping procedure. The district court nevertheless entered judgment for the

employer. The district court surmised from the testimony of one of plaintiff’s

witnesses that the real but hidden reason the white employee had been excluded

from grouping was nepotism–a reason never advanced by the employer. Id. at

1513. We concluded that this sua sponte invocation of a new, nondiscriminatory

reason for the employer’s actions deprived the plaintiff of “a full and fair

opportunity to demonstrate pretext,” and remanded for further proceedings. Id.

at 1514.

Here, as in Bell , the district court relied on testimony presented as part of

plaintiff’s case to establish a “real” but concealed nondiscriminatory motive for

the employer’s actions. In both Bell and in this case, the employer did not argue

for the motivation eventually relied upon by the district court.

These similarities, however, do not require a remand, for at least two

reasons. First, under the Randle analysis, the district court must rely on more

than just evidence presented by the plaintiff; the plaintiff must concede the

nondiscriminatory motivation in her own position before the court. Assuming that

such a concession exists here (a matter that we take up later in this opinion),

plaintiff cannot claim that the district court developed its theory of a

nondiscriminatory motivation without giving her the opportunity to present “her

side of the story.”

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 Second, plaintiff does not argue, nor does the record suggest, that plaintiff

would be able to present evidence to undermine the concession she has already

made. The district court found that “[p]laintiff has never claimed, and the facts

as verified would not seem to support a claim, that Betty Norton’s job was

protected because she was white.” Aplt. App. at 139 n.5. In her appellate briefs,

plaintiff does not argue that her employer would not have rescued an

African-American’s job, had it been in jeopardy, as it did Betty Norton’s. For

these reasons, we conclude that plaintiff was not denied a full and fair

opportunity to present her case.

3. Application of Randle

Having disposed of threshold matters, we move to the application of

Randle . In order to apply the Randle footnote here, we must answer two

questions. First, was the motivation allegedly conceded by the plaintiff

nondiscriminatory? Second, did plaintiff actually concede that her employer had

this motivation?

a. “Saving a job” as a nondiscriminatory rationale

Plaintiff argues that the Randle exception should not apply in her case,

because the successful white candidate was not married to her employer, the

example given in Randle footnote fourteen. While wary of expanding the Randle

exception beyond its elastic limits, we do not read Randle so narrowly. Persuasive

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authority for a broader view of Randle can be found in the “friendship” and

“nepotism” cases. These cases hold that an employer’s actions based on loyalty to

a friend or relative (particularly an unemployed friend or relative) are not

considered “discriminatory,” even where they benefit the nonprotected friend or

relative at the expense of a more qualified, protected person. See, e.g., Brandt v.

Shop’n Save Warehouse Foods, Inc. , 108 F.3d 935, 938 (8th Cir. 1997) (“[I]t is

not intentional sex discrimination . . . to hire an unemployed old friend who

happens to be male, without considering an applicant who is neither unemployed

nor an old friend and happens to be female.”); Foster v. Dalton , 71 F.3d 52, 54,

56 (1st Cir. 1995) (upholding, against Title VII challenge, supervisor’s decision

to alter job description to favor his “fishing buddy” over generally more qualified

black female applicant, because “Title VII does not outlaw cronyism”); Holder v.

City of Raleigh , 867 F.2d 823, 825-26 (4th Cir. 1989) (rejecting “nepotism” as an

impermissible hidden motive equivalent to discrimination for employer’s refusal

to hire more qualified black applicant). 2

The friendship and nepotism cases only illustrate a broader principle: that

employers are free to employ nondiscriminatory criteria that are “unfair” or even

2
It should be noted that these cases are generally limited to claims involving
disparate treatment, rather than disparate impact. See Foster , 71 F.3d at 57;
Holder , 867 F.2d at 826. This case is a disparate treatment case.

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reprehensible, so long as they are not discriminatory. As Judge Easterbrook has

explained:

A public employer may feel bound to offer explanations that are
acceptable under a civil service system, such as that one employee is
more skilled than another, or that “we were just following the rules.”
The trier of fact may find, however, that some less seemly
reason–personal or political favoritism, a grudge, random conduct, an
error in the administration of neutral rules–actually accounts for the
decision. Title VII does not compel every employer to have a good
reason for its deeds; it is not a civil service statute. Unless the
employer acted for a reason prohibited by the statute, the plaintiff
loses.

Benzies v. Ill. Dep’t of Mental Health & Developmental Disabilities , 810 F.2d

146, 148 (7th Cir. 1987). Thus, we conclude that the employer’s decision to save

a white employee from an impending layoff by giving that employee preference

over an African-American employee who did not face a layoff, does not give rise

to an inference of discrimination under the facts of this case.

Our decision in Luna v. City & County of Denver , 948 F.2d 1144, 1149

(10th Cir. 1991), is not to the contrary. In Luna , the employer had already

decided on a white candidate when a more qualified minority candidate presented

himself for an interview. The employer skewed the interview process by calling

the minority candidate to a “meeting” and bombarding him with technical

questions, without telling him he was actually being interviewed for the job. Id.

at 1147. It then attempted to justify its decision in favor of the white candidate

by claiming that it had already been prepared to hire him when the minority

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candidate unfortunately showed up, and by arguing that the minority candidate

performed poorly at the impromptu job interview. Under these circumstances,

exhibiting blatant racial skewing in the selection process, this court rejected the

employer’s attempt to plead “cronyism” as a defense to its actions. This case

differs from Luna, because here the employer had a specific, nondiscriminatory

motivation, to rescue the successful candidate from looming unemployment,

rather than simply a predetermined, subjectively-based bias in favor of a white

candidate.

The employer’s conceded motivation here, to save Betty Norton from a

layoff, does not give rise to an inference of discrimination under the facts of this

case. We must next determine whether plaintiff in fact conceded that this was the

employer’s true motivation.

b. Concession by plaintiff

Plaintiff argues that Randle footnote fourteen does not apply, because she

did not concede that her employer’s true reason for not promoting her was

nondiscriminatory. Aplt. Opening Br. at 6. A careful reading of the Randle

footnote shows, however, that an employee need not specifically concede that her

employer’s real reason was “nondiscriminatory.” Rather, it is enough if the

plaintiff concedes a hidden motivation which the court concludes is

nondiscriminatory, i.e., not prohibited under the civil rights laws. This accords

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with the district court’s general duty within the McDonnell Douglas framework.

See, e.g., Sharkey v. Lasmo (AUL Ltd.) , 214 F.3d 371, 374 (2d Cir. 2000) (stating

district court has duty to decide “whether the defendant has . . . satisfied the

burden of proffering a non-discriminatory reason for its conduct.”).

Plaintiff’s summary judgment materials amply support the district court’s

determination that she conceded a motive which was nondiscriminatory. Plaintiff

explained the reason for her employer’s actions as follows:

Capt. Jameson selected Betty Norton for the Budget Analyst
position because Betty Norton’s civilian purchasing agent position
was being converted to a military position and Jameson who was
transferring to Wright-Patterson Air Force Base in Ohio, selected
Betty Norton to provide Norton with a secure position. Norton’s
selection for the Budget Analyst position was not a promotion for
Norton, it was a demotion to a lower grade at the same pay.

Aplt. App. at 92.

Later, in the same response, plaintiff stated:

The relevant documents in this case reveal that Capt. Jameson
supervised both Ellen Braham and Betty Norton, who were civilian
purchasing agents. However, both Ellen Braham and Betty Norton
were about to lose their purchasing agent positions because those
positions were being converted from civilian to military. Both Ellen
Braham and Betty Norton secured positions however, both positions
were not promotions but instead were demotions in grade with
Braham and Norton allowed to keep their same salary.

Id. at 100.

In an affidavit, plaintiff stated as follows:

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 8. It was common knowledge that certain positions would be converted
from civilian to military due to changes in the authorization made by
the Medical Group periodically.

9. In 1995, the purchasing agent position held by Ellen Braham and
Betty Norton were placed on the authorization list meaning that those
positions would be converted from civilian to military and any
civilian employee seating on [sic] a civilian purchasing agent
position who did not find another position would be laid-off effective
September 30th, the end of the fiscal year.

Id. at 118.

We agree with the district court that these statements represent plaintiff’s

concession of a nondiscriminatory motivation for her employer’s actions.

Plaintiff has conceded, for summary judgment purposes, that her employer was

motivated by a hidden but nondiscriminatory reason in selecting a white candidate

rather than plaintiff. For this reason, we must affirm summary judgment in favor

of the employer.

The judgment of the United States District Court for the Western District of

Oklahoma is AFFIRMED.

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