PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________
No. 10-1440
_________
DEAN REA,
Appellant
v.
FEDERATED INVESTORS
________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 2-09-cv-01205)
District Judge: Honorable Gary L. Lancaster
_______
Submitted Under Third Circuit LAR 34.1(a)
December 13, 2010
Before: SLOVITER, GREENAWAY, JR., and
STAPLETON, Circuit Judges.
(Filed: December 15, 2010)
________
Joseph H. Chivers, III
100 First Avenue
Suite 1010
Pittsburgh, PA l5222
Attorney for Appellant
Christian C. Antkowiak
Gregory A. Miller
Buchanan Ingersoll & Rooney
One Oxford Centre
301 Grant Street, 20 Fl.
Pittsburgh, PA 15219
Attorneys for Appellee
Tara A. Twomey
National Assoc. of Consumer
Bankruptcy Attorneys
1501 The Almeda
San Jose, CA 95126
Attorney for Amicus Appellant
______
OPINION OF THE COURT
______
SLOVITER, Circuit Judge.
Appellant Dean Rea filed a complaint in the United
States District Court of the Western District of Pennsylvania
alleging that Federated Investors violated 11 U.S.C. § 525(b)
when it refused to hire Rea because he had previously
declared bankruptcy. The District Court granted Federated‟s
motion under Rule 12(b)(6), Fed. R. Civ. P., to dismiss for
failure to state a claim, holding, in accordance with the
majority of other courts to have addressed the issue, that §
525(b) does not create a cause of action against private
employers who engage in discriminatory hiring. We will
affirm.
I.
The facts are not in dispute. Rea filed for bankruptcy
in 2002 and his debts were discharged in 2003. In 2009, Rea
applied for employment with Federated through the
placement firm Infinity Tech Services. Although it appeared
after Federated interviewed him that Rea would be hired by
Federated, Infinity later informed Rea that Federated had
refused to hire him because of his bankruptcy.
Section 525 of the Bankruptcy Code, which prohibits
discrimination against an individual solely because he or she
is or has been a debtor or bankrupt, provides:
(a) . . . [A] governmental unit may not deny, revoke,
suspend, or refuse to renew a license, permit, charter,
franchise, or other similar grant to, condition such a
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grant to, discriminate with respect to such a grant
against, deny employment to, terminate the
employment of, or discriminate with respect to
employment against, a person that is or has been a
debtor under this title or a bankrupt or a debtor under
the Bankruptcy Act, or another person with whom
such bankrupt or debtor has been associated, solely
because such bankrupt or debtor is or has been a
debtor under this title or a bankrupt or debtor under the
Bankruptcy Act, has been insolvent before the
commencement of the case under this title, or during
the case but before the debtor is granted or denied a
discharge, or has not paid a debt that is dischargeable
in the case under this title or that was discharged under
the Bankruptcy Act.
(b) No private employer may terminate the
employment of, or discriminate with respect to
employment against, an individual who is or has been
a debtor under this title, a debtor or bankrupt under the
Bankruptcy Act, or an individual associated with such
debtor or bankrupt, solely because such debtor or
bankrupt--
(1) is or has been a debtor under this title or a
debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the
commencement of a case under this title or
during the case but before the grant or denial of
a discharge; or
(3) has not paid a debt that is dischargeable in a
case under this title or that was discharged
under the Bankruptcy Act.
Federated moved to dismiss Rea‟s action, arguing that
§ 525(b) does not prohibit a private employer from refusing
to hire an individual because that individual has claimed
bankruptcy. Rea asserted that the Court was required to read
§ 525(b) broadly to effect its remedial purpose, and that under
that expansive reading, § 525(b) does include such a
proscription.
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Noting that there was a lack of binding precedent to
inform its determination, the District Court employed basic
principles of statutory construction to reach its conclusion.
As the Supreme Court stated in Russello v. United States, 464
U.S. 16, 23 (1983), “[w]here Congress includes particular
language in one section of a statute but omits it in another
section of the same Act, it is generally presumed that
Congress acts intentionally and purposefully in the disparate
inclusion or exclusion.” (internal quotations and brackets
omitted).
Applying this precept, the District Court found no
merit in “[Rea]‟s suggestion that the phrase „discriminate
with respect to employment‟ found in both subsections 525(a)
and (b) be read to encompass the phrase „deny employment
to,‟ found only in subsection 525(a).” Rea v. Federated
Investors, 431 B.R. 18, 23 (W.D. Pa. 2010). It thus
“decline[d] to impose the prohibition set forth in [§] 525(a)
upon [§] 525(b), because Congress clearly opted to exclude
it.” Id. The Court agreed with Federated that “[Rea] lack[ed]
a statutorily cognizable cause of action under 11 U.S.C. §
525(b) against [Federated], a private employer, for denying
[Rea] employment when [Rea] readily admits to having filed
for bankruptcy and was declared to have been bankrupt.” Id.
It granted Federated‟s motion to dismiss accordingly. Rea
appeals.1
II.
Rea contends that the District Court erred as a matter
of law. We conduct a plenary review of the District Court‟s
order granting a motion to dismiss for failure to state a claim.
Gelman v. State Farm Mut. Auto. Ins. Co., 583 F.3d 187, 190
(3d Cir. 2009). We accept all factual allegations as true,
construe the Complaint in the light most favorable to Rea, and
determine whether, under any reasonable reading of the
Complaint, Rea may be entitled to relief. See id.
1
The District Court had jurisdiction under 28 U.S.C. § 1331,
and we have jurisdiction under 28 U.S.C. § 1291.
4
Relying on Leary v. Warnaco, Inc., 251 B.R. 656, 658
(S.D.N.Y. 2000), Rea asserts that the plain meaning of the
prohibition in § 525(b) against “discrimination with respect to
employment” is broad enough to encompass discrimination in
the denial of employment. In Leary, the District Court was
not persuaded by the argument that Congress purposefully
omitted from § 525(b) the phrase “deny employment to,”
which is contained in § 525(a), instead attributing the
difference to a “scrivener [who] was more verbose in writing
§ 525(a).” Id. In reasoning that “[t]he evil being legislated
against is no different when an employer fires a debtor simply
for seeking refuge in bankruptcy, as contrasted with refusing
to hire a person who does so,” the Court concluded that the
plain meaning of “discrimination with respect to
employment” in § 525(b) and the “fresh start” policy
underlying the provision supported the construction that Rea
now urges us to adopt. Id.
We find Rea‟s reliance on Leary unavailing. Leary
appears to be the only court to conclude that § 525(b)
prohibits private employers from engaging in discriminatory
hiring, contrary to overwhelming authority otherwise. See,
e.g., Burnett v. Stewart Title, Inc., 431 B.R. 894 (S.D. Tex.
2010); Myers v. TooJay’s Mgmt. Corp., 419 B.R. 51 (M.D.
Fla. 2009); In re Stinson, 285 B.R. 239 (Bankr. W.D. Va.
2002); Fiorani v. Caci, 192 B.R. 401 (E.D. Va. 1996);
Pastore v. Medford Sav. Bank, 186 B.R. 553 (D. Mass. 1995);
In re Madison Madison Int’l of Ill., 77 B.R. 678 (Bankr. E.D.
Wis. 1987); see also In re Hopkins, 81 B.R. 491 (Bankr.
W.D. Ark. 1987) (§ 525(b) proscribes discriminatory conduct
after offer of full-time employment extended to a part-time
employee). The decision has been widely criticized because
it elevates the assumption that a scrivener erred over the plain
meaning of the statute. See, e.g., Burnett, 431 B.R. at 900-01.
Where the language of the statute is plain, “the sole
function of the courts is to enforce it according to its terms.”
W. Va. Univ. Hosps., Inc. v. Casey, 499 U.S. 83, 99 (1991)
(internal quotations omitted). Although § 525(b) was enacted
years after § 525(a), its language regarding employment
discrimination is nearly identical to that used in § 525(a) and
Congress chose to place the two subsections adjacent to each
other in the Bankruptcy Code. It is abundantly clear that
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Congress modeled § 525(b) off of § 525(a) and that any
differences between the two are a result of Congress acting
intentionally and purposefully. As the Supreme Court stated
in Russello, “[w]here Congress includes particular language
in one section of a statute but omits it in another section of the
same Act, it is generally presumed that Congress acts
intentionally and purposely in the disparate inclusive or
exclusion.” 464 U.S. at 23 (internal quotations and brackets
omitted).
Section 525(a) provides that the Government may not
“deny employment to, terminate the employment of, or
discriminate with respect to employment against” any person
that has been bankrupt. (emphasis added). In § 525(b), on
the other hand, Congress omitted the language prohibiting a
private employer from “deny[ing] employment to” a person
that has been bankrupt. As the Supreme Court stated in
Russello, “[w]e refrain from concluding here that the differing
language in the two subsections has the same meaning in
each. We would not presume to ascribe this difference to a
simple mistake in draftsmanship.” 464 U.S. at 23.
We will not contravene congressional intent by
implying statutory language that Congress omitted. In re
Lord Abbett Mut. Funds Fee Litig., 553 F.3d 248, 254 (3d
Cir. 2009) (“The role of the courts in interpreting a statute is
to give effect to Congress‟s intent.”) (internal quotations
omitted). Nor will we interpret statutory language in a way
that would render any part thereof superfluous. United States
v. Cooper, 396 F.3d 308, 312 (3d Cir. 2005). The District
Court properly declined Rea‟s request to read the phrase
“discrimination with respect to employment” in § 525(b) as
broad enough to encompass discrimination in the denial of
employment. Congress did not so provide. Neither will we.
III.
For the foregoing reasons, we will affirm the judgment
of the District Court.
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