ISMAIL v. DOMINION ENERGY INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

HESHAM ISMAIL :

: CIVIL ACTION

v. :

: NO. 19-1093

DOMINION ENERGY, INC. :

MEMORANDUM

YOUNGE, J. APRIL 1, 2022

This action arises out of the allegedly discriminatory actions on behalf of Plaintiff’s former

employer. Hesham Ismail (“Plaintiff") alleges that his former employer, Dominion Energy

Fairless, LLC (“DEFLLC”), subjected him to discrimination based on his race, religion, and

national origin. (See generally, Compl. ECF No. 1.) Plaintiff also alleges he was wrongfully denied

contractually obligated funds for his employment-related relocation. Plaintiff filed his suit against

Dominion Energy, Inc. (“Dominion”), DEFLLC’s parent organization. However, he seeks leave

to amend for the fourth time to include DEFLLC, three other related defendants, and two new

theories of liability. Presently before this Court is Dominion’s Motion to Dismiss Plaintiff’s Third

Amended Complaint, Plaintiff’s Motion for Leave to Amend his Complaint, and Dominion’s

Motion for Sanctions pursuant to Fed.R.Civ.P. 11. For the reasons that follow, this Court grants

Dominion’s Motion to Dismiss, denies Plaintiff’s Motion for Leave to Amend, and denies

Dominion’s Motion for Sanctions.

I. BACKGROUND

A. Factual Background1

Plaintiff is an Egyptian national of Arab descent. (ECF No. 10, ¶ 9.) He is Muslim. (Id.)

Plaintiff was hired by DEFLLC to work in a power plant located in Fairless Hills, PA, with the job

title of Engineer III. (Id. ¶ 8.)2 When DEFLLC hired Plaintiff, it allegedly promised that his

relocation expenses would be paid for under the company’s Relocation Benefit policy. (Id.)

Plaintiff relocated from Pottsville, PA to Morrisville, NJ in October 2015 in order to begin

employment. (Id.) Throughout his employment, Plaintiff’s salary was suppressed by his managers,

and did not reflect the “outstanding quality of his performance.” (Id. ¶ 15.)

On February 13, 2017, Plaintiff received his first annual performance review. (Id. ¶ 10.)

He received a score of “exceeded expectations.” (Id.) Per Plaintiff’s job offer, he was promised a

merit-based salary increase after his annual performance review. (Id. ¶ 11.) Upon receiving his

performance review score, Plaintiff asked his manager, William Mackenzie (“Mackenzie”), for his

salary to be adjusted based on the pay scale for the position. (Id. ¶ 13.) Mackenzie rebuffed Plaintiff

and threatened to call human resources. (Id. ¶ 14.) Later that day, Plaintiff’s co-worker, a

Caucasian woman, received a promotion despite not meeting the minimum job qualifications. (Id.

¶ 15.)

On another occasion, Plaintiff approached Mackenzie and requested reimbursement for his

relocation expenses. (Id. ¶ 17.) Despite meeting the criteria, Mackenzie denied Plaintiff’s claim.

(Id.) A few months later, a Caucasian co-worker was given the same relocation package that was

1 Unless otherwise noted, the factual background is taken from Plaintiff’s Complaint.

2 As stated above, DEFLLC is a wholly owned subsidiary of Dominion. In 2018, DEFLLC transferred

ownership of the power plant to Starwood Energy Group Global, LLC, a private investment firm

unrelated to Dominion. (Id. ¶ 3.) DEFLLC “is now defunct and assetless, if not completely dissolved and

inactive.” (Id.)

promise to Plaintiff. (Id. ¶ 18.) Plaintiff approached Mackenzie about the relocation package

discrepancy, and Mackenzie stated that the human resources department was responsible for

making reimbursement decisions. (Id. ¶ 19.) When Plaintiff asked Mackenzie to challenge the

human resources department’s decision, Mackenzie stated he was not going to honor the relocation

policy because it was discretionary. (Id. ¶ 22.) Plaintiff continued to request assistance from his

managers and other personnel at DEFLLC, to no avail. (Id.)

In April 2017, a minor oil leak occurred on a job where Plaintiff was staffed. (Id. ¶ 25.)

When Plaintiff’s manager became aware of the incident, he told Plaintiff, “I’d like to see how you

get out of this one!” (Id. ¶ 26.) Mackenzie tried to have Plaintiff punished for the incident, even

after an investigation into the incident revealed that the error was not Plaintiff’s fault. (Id. ¶ 29.)

When a more serious incident occurred on a job staffed with an engineer who was Caucasian,

Mackenzie attempted to cover up the error and did not file a safety incident report. (Id. ¶ 24.)

In closed door meetings with Mackenzie, Plaintiff’s manager would berate Plaintiff with

racial, ethnic, and religious slurs. (Id. ¶ 29.) Plaintiff reported this conduct to Mackenzie’s

manager, Robert Sauer. (Id. ¶ 30.) Sauer ignored Plaintiff’s complaints, and never took any action

against Mackenzie. (Id. ¶ 31.)

B. Procedural Background

In November 2017, Plaintiff submitted an Intake Questionnaire to the Equal Employment

Opportunity Commission (“EEOC”) via mail in early November, 2017. (Id. ¶ 7.) The Philadelphia

District Office received the questionnaire on November 16, 2017, and the Charge Receipt

Technical Information Unit acknowledged receipt of Plaintiff’s letter on November 30, 2017. (Id.)3

Plaintiff did not hear back from the EEOC until October 30, 2018, when an EEOC Investigator

3 Plaintiff’s complaint was assigned a charge number of 846-2018-03677C. (Id. ¶ 7.)

from the Philadelphia office sent an email attaching a drafted charge for Plaintiff’s review. (Id.)

Plaintiff reviewed and finalized the document, then signed and returned it on November 7, 2018.

(Id.) On the same date, the Pennsylvania Human Relations Commission (“PHRC”) received a dual-

filed version of the charge. (Id. ¶ 69.)

On January 29, 2019, the EEOC issued a Dismissal and Notice of Rights letter. (Id. ¶ 4.)

The EEOC explained that it was unable to conclude that the information obtained established a

violation of the statutes. (Id.)

On March 15, 2019, Plaintiff filed the instant suit, claiming, inter alia, race, religion, and

national origin discrimination under Title VII. (ECF No. 1.) Plaintiff filed an Amended Complaint

on June 10, 2019, (ECF No. 4), and a Second Amended Complaint on July 5, 2019. (ECF No. 5.)

Pursuant to a stipulation between the parties, Plaintiff filed a Third Amended Complaint (“TAC”)

on September 3, 2019—a day later than the agreed-upon date. (ECF No. 10.) In his TAC, Plaintiff

alleges the following against Dominion pursuant to Title VII: race discrimination (Count 1);

national origin discrimination (Count 2); and religion discrimination (Count 3). (ECF No. 10, ¶¶

36-44, 45-53, 54-62.) Plaintiff also alleges three corresponding counts of discrimination under the

Pennsylvania Human Relations Act, 43 P.S. §§ 951-963 (“PHRA”) (Counts 4 – 6). (Id., ¶¶ 63-71,

72-80, 81-89.) He further alleges discrimination in his ability to make and enforce contracts

pursuant to 42 U.S.C. § 1981. (Id. ¶¶ 90-97.)

In his TAC, Plaintiff further argues he is contractually entitled to relocation expenses

pursuant to an internal policy at Dominion. Plaintiff alleges several claims sounding in breach of

contract against Dominion exclusively: promissory estoppel (Count 8); breach of an express

employment contract (Count 9); breach of an implied employment contract (Count 10); and breach

of the Pennsylvania Wage Payment and Collection Law, 43 P.S. §§ 260.1-260.45 (“WPCL”)

(Count 11). (Id. ¶¶ 90-97, 98-103, 104-106, 107-111, 112-115.)

On September 24, 2019, Dominion filed a Motion to Dismiss Plaintiff’s Third Amended

Complaint. (ECF No. 11.) In its Motion to Dismiss, Dominion argues that Plaintiff’s claims should

be dismissed not only because they are untimely, but because they are filed against the wrong party

since Dominion never employed Plaintiff. (Id.) Plaintiff filed a response on October 8, 2019;

thereafter Dominion filed a reply on October 15, 2019. (ECF No. 12, 14.)

On December 23, 2019, Plaintiff filed a Motion for Leave to Amend Complaint. (ECF No.

15.) Plaintiff attached as an exhibit a proposed Fourth Amended Complaint. (Id., Exhibit 1.) In his

Fourth Amended Complaint, Plaintiff seeks to add as defendants DEFLLC (under the name

“Fairless Energy L.C.C.”), Mackenzie, Sauer, and NEI Global Relocation. (Id., Exhibit 1, p. 1.)

Plaintiff also sets forth additional factual allegations, and two new claims—one for Title VII

retaliation, and one for tortious interference with a contractual relationship. (Id., Exhibit 1, ¶¶ 59-

65, 128-132.)

In response, Dominion filed an Opposition to Plaintiff’s Motion for Leave to Amend

Complaint on February 5, 2020. (ECF No. 17.) Dominion argues that Plaintiff unduly delayed

adding the additional parties as well as the claims against them; that Plaintiff’s proposed

amendments are prejudicial to Dominion; and that Plaintiff’s proposed amendments are futile.

Plaintiff filed a reply on March 4, 2020. (ECF No. 19.)

On May 15, 2020, Dominion filed Motion for Sanctions, claiming Plaintiff was aware

Dominion was not the proper defendant and his claims were untimely. (ECF No. 21.) Plaintiff filed

an Opposition to Dominion’s Motion for Sanctions. (ECF No. 23.)

II. LEGAL STANDARDS

A. Motion to Dismiss

Rule 12(b)(6) provides for the dismissal of a complaint for failure to state a claim upon

which relief can be granted. “To 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.’” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

A claim is plausible “when the Plaintiff pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the misconduct alleged.” Id. A complaint that

merely alleges entitlement to relief, without alleging facts that show entitlement, must be

dismissed. See Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009).

In deciding a motion under Rule 12(b)(6), we may consider “only the complaint, exhibits

attached to the complaint, matters of public record, as well as undisputedly authentic documents

if the complainant’s claims are based upon these documents.” Mayer, 605 F.3d at 230. We must

“accept all well-pleaded allegations as true and draw all reasonable inferences in favor of the

plaintiff.” City of Cambridge Ret. Sys. v. Altisource Asset Mgmt. Corp, 908 F.3d 872, 878–79 (3d

Cir. 2018). “However, ‘we disregard threadbare recitals of the elements of a cause of action, legal

conclusions, and conclusory statements.’” Id. at 879 (quoting James v. City of Wilkes-Barre, 700

F.3d 675, 681 (3d Cir. 2012)).

Evaluation of a Rule 12(b)(6) motion entails a three-step analysis: (1) “[the district court]

must tak[e] note of the elements [the] plaintiff must plead to state a claim”; (2) “it should identify

allegations that, ‘because they are no more than conclusions, are not entitled to the assumption of

truth’”; and, (3) “[w]hen there are well-pleaded factual allegations, [the] court should assume their

veracity and then determine whether they plausibly give rise to an entitlement to relief.” Connelly

v. Lane Constr. Corp., 809 F.3d 780, 787 (3d Cir. 2016) (quoting Iqbal, 556 U.S. at 675, 679).

The plausibility determination is a “context-specific task that requires the reviewing court to draw

on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.

Finally, when a motion to dismiss is granted, the court must decide whether to grant leave

to amend. The Third Circuit has a liberal policy favoring amendments and, thus, leave to amend

should be freely granted. See, e.g., Oran v. Stafford, 226 F.3d 275, 291 (3d Cir. 2000); Dole v.

Arco Chem. Co., 921 F.2d 484, 486 (3d Cir. 1990).

B. Leave to Amend under Rule 15(a)

Federal Rule of Civil Procedure 15(a) states that “leave [to amend a pleading] shall be

freely given when justices so requires.” Federal Rule of Civil Procedure 15(a) has been interpreted

to liberally allow for the amendment of pleadings when justice so requires; however, this privilege

is not unfettered. Foman v. Davis, 371 U.S. 178, 182 (1962). Under certain circumstances, the

denial of a motion to amend is appropriate. Adams v. Gould, Inc., 739 F.2d 858, 864 (3d Cir. 1984).

“Among the grounds that could justify a denial of leave to amend are undue delay, bad faith,

dilatory motive, prejudice, and futility.” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410,

1434 (3d Cir. 1997). “Delay becomes undue when it places an unwarranted burden on the court,

or when the plaintiff has had previous opportunities to amend.” Cureton v. Nat’l Collegiate Athl.

Assoc., 252 F.2d 267, 273 (3d Cir. 2001). In “assessing ‘futility,’ the district court applies the same

standard of legal sufficiency” used in 12(b)(6) motions. Id. Accordingly, the court must “accept as

true all the facts alleged in the complaint and all reasonable inferences that can be drawn from

them,” and deny a motion to amend only “where it is certain that no relief could be granted under

any set of facts that could be proved.” Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d

Cir. 1990).

C. Rule 11 Sanctions

Federal Rule of Civil Procedure 11 requires that “[e]very pleading, written motion, and

other paper must be signed by at least one attorney of record in the attorney's name—or by a

party personally if the party is unrepresented.” Fed. R. Civ. P. 11(a). In doing so, the:

attorney or unrepresented party certifies that to the best of the person's knowledge,

information, and belief, formed after an inquiry reasonable under the

circumstances: (1) it is not being presented for any improper purpose, such as to

harass, cause unnecessary delay, or needlessly increase the cost of litigation; (2) the

claims, defenses, and other legal contentions are warranted by existing law or by a

nonfrivolous argument for extending, modifying, or reversing existing law or for

establishing new law; (3) the factual contentions have evidentiary support or, if

specifically so identified, will likely have evidentiary support after a reasonable

opportunity for further investigation or discovery; and (4) the denials of factual

contentions are warranted on the evidence or, if specifically so identified, are

reasonably based on belief or a lack of information.

Fed. R. Civ. P. 11(b)(1)-(4). To satisfy the affirmative duty imposed by Rule 11, an attorney or

party must inquire into both the facts and the law before filing papers with the court. Bus. Guides,

Inc. v. Chromatic Commc'ns Enters., Inc., 498 U.S. 533, 545 (1991); Napier v. Thirty or More

Unidentified Federal Agents, 855 F.2d 1080, 1091 (3d Cir. 1988); Gaiardo v. Ethyl Corp., 835

F.2d 479, 482 (3d Cir. 1987) (A plaintiff must “stop, think, investigate and research” before

initiating a lawsuit or filing a paper with the court). “The legal standard to be applied when

evaluating conduct allegedly violative of Rule 11 is reasonableness under the circumstances, with

reasonableness defined as an ‘objective knowledge or belief at the time of the filing of a challenged

paper’ that the claim was well-grounded in law and fact.” Ford Motor Co. v. Summit Motor Prods.,

Inc., 930 F.2d 277, 289 (3d Cir. 1991).

If a court determines that Rule 11(b) has been violated after notice and an opportunity to

respond, it “may impose an appropriate sanction on any attorney, law firm, or party that violated

the rule or is responsible for the violation.” Fed. R. Civ. P. 11(c)(1). The plain language of Rule

11 indicates the discretionary nature of the decision to award sanctions in the form of attorneys'

fees and costs. Id. Rule 11 sanctions are intended to be used only in exceptional circumstances.

Doering v. Union County Bd. of Chosen Freeholders, 857 F.2d 191, 194 (3d Cir. 1988) (Rule 11

is violated only when it is patently clear that a claim has absolutely no chance of success).

III. Discussion

A. Dominion’s Motion to Dismiss Plaintiff’s Third Amended Complaint

1. The Parties’ Arguments

Dominion argues this Court should dismiss Plaintiff’s TAC for three reasons. (ECF No.

11.) First, Dominion argues the TAC was untimely, since Plaintiff failed to file his amended

complaint by the stipulated date. (Id. at 7.) Second, Dominion argues Plaintiff has failed to state

any facts that allege a plausible claim against it. Dominion points out that Plaintiff mentions it only

once, when Plaintiff avers that Dominion is the parent company of DEFLLC. (Id. at 7-9.) Nowhere

throughout the entirety of the TAC does Plaintiff aver sufficient facts to allege liability on behalf

of Dominion in its role as the parent organization of Plaintiff’s actual employer. (Id. at 8.) Lastly,

assuming Plaintiff is even able to proceed with its claims, Dominion argues Plaintiff is unable to

plausibly state a claim in any capacity. (Id. at 9-28.)

In Plaintiff’s allegations for race discrimination (Counts 1 and 4), Dominion argues

Plaintiff failed to exhaust his administrative remedies because he failed to indicate he was bringing

a race discrimination challenge, or allege any facts related to race discrimination in his complaint

before the EEOC or the PHRA. (Id. at 9-10, 17-18.) In Plaintiff’s allegations for national origin

(Counts 2 and 5) and religion discrimination (Counts 3 and 6), Dominion argues Plaintiff fails to

state a claim under a disparate treatment theory or a hostile work environment theory. (Id. at 12-

17, 18-19.) Dominion claims Plaintiff does not set forth any circumstances which give rise to an

inference of discrimination, such as evidence that individuals outside his religion or national origin

were treated more favorably. (Id. at 12-15, 18.) Moreover, Plaintiff’s only comparator evidence

refers to race. (Id.) Dominion argues Plaintiff’s only evidence in support of his hostile work

environment claim is not “severe” in nature and is conclusory, and he does not plead he was

detrimentally affected by his employer’s actions. (Id. at 15-16, 18.)

Dominion also argues that Plaintiff’s claims for discrimination under state and federal law

(Counts 1-6) are untimely. (Id. at 9-10.) Dominion argues that since Plaintiff failed to dual file his

charges with both the EEOC and the PHRA, he was required to file his charges with either agency

within 180 days of the alleged discrimination. (Id.) Dominion further asserts that since Plaintiff

filed his charge with the EEOC in November 2017 and with the PHRA in November 2018, he did

not dual file his charges. (Id.) Since Plaintiff did not timely file his claims within 180 days with

either the EEOC or PHRA, both are untimely. (Id.)

Next, Dominion argues Plaintiff fails to state a claim under 42 U.S.C. § 1981 (“All persons

within the United States shall have the same right . . . to make and enforce contracts . . . as is

enjoyed by white persons.”). (Id. at 19-20.) Plaintiff argues that based on the hostile work

environment he experienced, Dominion interfered with his contractual rights as they are stated in

Section 1981. (Id. at 19.) Dominion explains that an essential element of a claim under Section

1981 is the presence of a contract. (Id.) Plaintiff has failed to plead any that he was in privity of

contract with Dominion, who was not Plaintiff’s employer. (Id.) Since “a parent company is not

liable for the actions of its subsidiaries unless the parent company itself has engaged in

wrongdoing, or exercises control over the subsidiary entity,” Dominion asserts it is not liable for

any wrongdoing under Plaintiff’s Section 1981 theory. (Id. at 20 (citing Travelers Indem. Co. v.

Cephalon, Inc., 32 F.Supp.3d 538 (E.D. Pa. 2014).)

Dominion also claims Plaintiff’s charges under state law contract claims—promissory

estoppel (Count 8), breach of contract (Count 9), and breach of implied employment contract

(Count 10)—are similarly inadequate. (Id. at 20-26). Dominion argues that since it was not

Plaintiff’s employer, it cannot be held liable for Plaintiff’s relocation expenses because it was not

in privity of contract with Plaintiff, nor was there any implied contract that existed between the

parties. (Id. at 21 (citing Matter of Estate of Barilla, 369 Pa. Super. 213, 219 (1987) (stating that

under Pennsylvania law, parties that are not in privity may not be held liable for a breach)).)

Moreover, Dominion argues that Pennsylvania is an at-will state, and Plaintiff fails to allege the

type of information necessary to rebut a presumption that he had an employment contract with his

employer. (Id. at 23 (citing Murray v. Commercial Union Ins. Co., 782 F.2d 432 (3d Cir. 1986)).)

Even though relocation has been selectively used as a factor in which to find an employment

contract existed, Dominion claims the length of Plaintiff’s tenure at DEFLLC proves he remained

an at-will employee. (Id. at 24 (citing Zysk v. FFE Minerals USA Inc., 225 F. Supp. 2d 482 (E.D.

Pa. 2001) (employee’s relocation was sufficient additional consideration, but because plaintiff was

employed for two years, employee was no longer protected against discharge).)

Lastly, Dominion argues Plaintiff’s claim under the WCPL must be dismissed. (Id. at 26-

28.) Dominion points out that a prerequisite for relief under the WCPL is the existence of an

employment contract, and Plaintiff has not alleged the existence of any contract for employment

between himself and Dominion. (Id. at 26.) Dominion refutes any claim Plaintiff may assert that

relocation benefits are “earned fringe benefits” under the WCPL since Plaintiff was clearly told by

his supervisor that the relocation policy could be discontinued at any time because it was

discretionary. (Id. at 27.)

In response, Plaintiff argues his delay in filing the TAC was de minimus as it was filed

only a day late. (ECF No. 13, at 4.) Further, he argues he rightfully sued Dominion since DEFLLC

is now a defunct and assetless organization. (Id. at 5.) Under Title VII, Plaintiff claims that

“successors such as parent corporations assume liability for dissolved subsidiaries.” (Id. (citing

Williams v. Greendolf, Inc., 735 F.Supp. 137, 140 (S.D.N.Y. 1990)). Plaintiff states that it would

be inequitable to allow parent organizations to elude liability properly assigned to their affiliated

entities; thus, he should be entitled to engage in discovery in order to uncover the extent of the

entities’ intermingled nature. (Id. at 6.)

Lastly, Plaintiff refutes certain arguments regarding the alleged deficiencies in his

pleading, claiming generally that Dominion “attempts to hold Plaintiff’s opening pleading to an

unreasonable and unwarranted summary judgment level of detail and scrutiny.” (Id. at 10.) He

claims that Dominion’s attacks on his hostile work environment and disparate treatment claims do

not warrant dismissal with prejudice. (Id. at 9.) Further, Plaintiff claims Dominion improperly

argues a factual question regarding the distance of his relocation, and that in general, courts have

permitted complaints to proceed that allege WPCL claims under a relocation benefit theory. (Id.)

Lastly, Plaintiff argues he is allowed to proceed with his PHRA claims despite lacking a dismissal

letter, and that, despite Dominion’s reading of the TAC, he does not seek punitive damages under

the PHRA. (Id.)

2. Plaintiff Fails to Plausibly State a Claim Against Dominion

As noted above, Plaintiff brings his discrimination and contractual claims solely against

Dominion. However, Plaintiff does not succeed in stating a plausible claim against the sole

defendant since Dominion never employed Plaintiff. Plaintiff fails to argue any alleviating factors

that would allow him to ultimately hold Dominion responsible for DEFLLC’s alleged liability.

Further, Plaintiff cannot plausibly aver his contractual claims because he never entered into an

employment contract with Dominion.

Generally, a parent company may not be held liable for the actions of a subsidiary

organization simply due to the fact the organizations are related. See, e.g., United States v.

Bestfoods, 524 U.S. 51, 61 (1998); see also Jean Anderson Hierarchy of Agents v. Allstate Life

Ins. Co., 2 F. Supp. 2d 688, 691 (E.D. Pa. 1998). A court may only disregard the corporate form

in order to hold a parent company responsible by piercing the corporate veil. Piercing the corporate

veil is appropriate “when a court must prevent fraud, illegality, or injustice, or when recognition

of the corporate entity would defeat public policy or shield someone from liability for a crime.”

Pearson v. Component Tech. Corp., 247 F.3d 471, 484 (3d Cir. 2001). In order to pierce the

corporate veil, specific factors must be considered before one entity may be held responsible for

the misdeeds of another. Such factors include an entity’s gross undercapitalization, failure to

observe the corporate formalities, nonpayment of dividends, insolvency of debtor corporation,

siphoning of funds, nonfunctioning of directors and officers, the absence of corporate records, and

in general, whether the corporation is merely a façade. Id. at 485. In short, “the evidence must

show that the corporation's owners abused the legal separation of a corporation from its owners

and used the corporation for illegitimate purposes.” Lozosky v. Keystone Bus. Prod., Inc., 2015

WL 4727073, at *4 (M.D. Pa. Aug. 10, 2015).

Courts have used a slightly different test in order to consider claims of corporate

intermingling for labor purposes. The Third Circuit utilizes the “single employer” or “single

integrated enterprise” test. In answering this question, the test looks at four factors: (1) functional

integration of operations; (2) centralized control of labor relations; (3) common management; and

(4) common ownership. Id. Among these factors, “no single factor is dispositive; rather, single

employer status under this test ‘ultimately depends on all the circumstances of the case.’” Pearson

v. Component Technology Corp., 247 F.3d 471, 485–86 (3d Cir. 2001) (citation omitted). The

heart of the inquiry is whether separate corporations are “in truth . . . but divisions or departments

of a single enterprise” lacking the “arm's length relationship found among unintegrated

companies.” N.L.R.B. v. Browning-Ferris Indus. of Pennsylvania, Inc., 691 F.2d 1117, 1112 (3d

Cir. 1982).

Although veil-piercing is not a separate cause of action, but rather a basis for a cause of

action against a particular entity, a court “must examine . . . whether the facts pleaded . . . state a

cause of action on a theory of piercing the corporate veil.” Lumax Indus., Inc. v. Aultman, 669

A.2d 893, 895 (Pa. 1995). “[A]verments reciting elements of the veil-piercing test, without any

supporting facts, constitute legal conclusions. Even under a notice pleading standard, as interpreted

in Twombly, such averments cannot support a veil-piercing claim.” Cent. Transp., LLC v. Atlas

Towing, Inc., 884 F.Supp.2d 207, 217 (E.D.Pa.2012) (quotations omitted).

Regardless of the exact factors examined by the court, the outcome is the same: Plaintiff

fails to state a claim for discrimination under Title VII or the PHRA. Plaintiff is unable to set forth

a plausible claim against Dominion since Dominion was not Plaintiff’s employer. Plaintiff

explicitly states that he was not at any point employed by Dominion, and had no

employer/employee relationship with the organization. (TAC, ¶ 3 (“[Dominion] did not directly

employ [Plaintiff]. A wholly-owned subsidiary of [Dominion], called [DEFLLC] operated the

Fairless Power Station . . . for [Dominion] . . . and employed [Plaintiff] as an engineer at the power

plant. At all times material hereto, DEFLLC qualified as Plaintiff’s employer pursuant to [Title

VII].”).) Since Plaintiff had no employer/employee relationship with Dominion, none of the counts

he alleges in his TAC include Dominion. Every single count alleged by Plaintiff complains of

some action undertaken by DEFLLC, and not Dominion. Clearly, Plaintiff’s TAC is best read as

an indictment of DEFLLC’s behavior, rather than Dominion’s. Plaintiff is unable to explain how

DEFLLC’s allegedly discriminatory actions equate to plausible claims levied against its parent

organization.

Plaintiff further does not plead any facts alleging Dominion’s liability in its role as

DEFLLC’s parent corporation. Plaintiff simply states that “upon information and belief,

[Dominion] assumed legal responsible [sic] for any contingent liability for the employment

discrimination claims of DEFLLC’s employees, such as [Plaintiff].” (TAC ¶ 3.) Plaintiff’s lone

assertion fails to set forth the type of information necessary to plausibly claim that Dominion holds

any responsibility for its subsidiary organization’s actions. Plaintiff’s threadbare statement does

not provide any of the information that would be useful in determining that DEFLLC’s misdeeds

could fairly be attributed to some other entity. As explained above, such information would include

the extent to which these entities shared resources, the presence of common management and

ownership, and overlapping operations. Nothing in the TAC provides this Court with insight into

the extent to which these entities acted as one.

Plaintiff’s single justification for continuously including Dominion in its complaints is that

it would be inequitable to let Dominion escape liability for the misdeeds of its subsidiary

organization. However, Plaintiff does not give this Court the necessary information to even

consider piercing the corporate veil in order to hold DEFLLC’s parent organization liable. Courts

do not undertake the process of reexamining corporate form lightly. Even read in the most

favorable light possible, Plaintiff does not come close to providing the type of information

necessary to consider bridging this divide. Plaintiff insinuates his reason for including Dominion

in his suit is because DEFLLC is now assetless and defunct. (TAC ¶ 3.) However, claims under

Title VII and the PHRA require more than general solvency to consider holding a parent

organization liable.

Plaintiff’s remaining contractual claims are similarly baseless. Regardless if the alleged

contract was express (Counts 7, 9, and 10) or implied (Count 8), Plaintiff asserts he was in privity

of contract with DEFLLC, and not Dominion. It is axiomatic that under Pennsylvania law, “a

contract cannot legally bind persons not party thereto.” Chambers Dev. Co. v. Commonwealth, 474

A.2d 728, 731 (Pa. 1984). Only a party to a contract can be liable for breach of that contract.

McLaren v. AIG Domestic Claims, Inc., 853 F. Supp. 2d 499, 513 (E.D. Pa. 2012) (citing Electron

Energy Corp. v. Short, 597 A.2d 175, 177 (Pa. Super. 1991)). Any express or implied promise of

a relocation benefit came from DEFLLC, and Plaintiff admits as much in his TAC. This fact

precludes Plaintiff from asserting liability on behalf of Dominion, at least not without further

information informing this Court as to why it should not observe these entities’ corporate

structures. Since Dominion was never a party to the various employment-related contracts which

Plaintiff alleged entitles him to various types of remuneration, he is wholly unable to plausibly

assert any type of contractual liability against Dominion.

B. Plaintiff’s Motion for Leave to Amend Complaint

1. Parties’ Arguments

Plaintiff requests leave to amend his complaint a fourth time. (ECF No. 15.) In his proposed

Fourth Amended Complaint (“FAC”), Plaintiff proposes adding four new defendants: DEFLLC,4

NEI Global Relocation (“NEI”), Mackenzie, and Sauer. (ECF No. 15, Exhibit 1.) Plaintiff seeks

to include DEFLLC in every charge brought against Dominion in his TAC. (Id.) In addition, he

seeks to add Mackenzie, and Sauer to his count for Section 1981 discrimination. (Id. at p. 15)

4 Plaintiff adds DEFLLC under the name of Fairless Energy, L.C.C., which he alleges is now the entity’s

name. (Id. at ¶ 4.)

Plaintiff also proposes adding NEI to his counts for breach of contract and breach of an implied

employment contract. (Id. at p. 17, 18.)

Plaintiff also proposes adding two new counts: one for Title VII retaliation against

defendants Dominion and DEFLLC, and another for tortious interference with a contractual

relationship against NEI pursuant to 44 P.S. § 5524. (Id. at ¶¶ 59-65, 128-132.) In his count for

retaliation, Plaintiff argues he was retaliated against for filing his charge of discrimination with

the EEOC and that it was a motivating factor in Dominion’s and DEFLLC’s decision to subject

him to adverse employment actions. (Id. at ¶¶ 59-65.) In his count for tortious interference with a

contractual relationship, Plaintiff claims he was contractually owed a relocation benefit by

Dominion and DEFLLC that NEI, acting as an agent of Plaintiff’s employer and its parent entity,

failed to fulfill. (Id. at ¶¶ 128-132.)5

In support of his Motion for Leave to Amend, Plaintiff argues that with the exception of

adding DEFLLC, none of his other proposed changes present significant legal issues. (ECF No.

15.) Thus, he claims he should be allowed to amend his complaint under the court’s liberal standard

pursuant to Federal Rule of Civil Procedure 15. (Id. at 2.) In regards to his addition of DEFLLC

as a defendant, he claims it is permitted despite the statute of limitations to bring a claim under

Title VII having passed because DEFLLC knew or should have known that but for Plaintiff’s

mistake, it would have been named in the original complaint. (Id. at 3 (citing Fed. R. Civ. P.

15(c)(1)(C)(ii) (“An amendment relates back to the date of the original pleading when . . . the

amendment changes the party . . . [and] the party to be brought in by the amendment . . . knew or

should have known that the action could have been brought against it, but for a mistake concerning

5 Plaintiff also adds a few new pieces of background information, including an alleged slur used

by Mackenzie against Plaintiff. (Id. at ¶¶ 27.)

the proper party’s identity.”).) Plaintiff claims this is so because Dominion and DEFLLC allegedly

share the same legal department and human resources department; thus, DEFLLC would have

been aware of Plaintiff’s claims. (Id. at 3.)

In response, Dominion argues Plaintiff’s proposed amendments were unduly delayed,

unduly prejudicial, and are mostly futile. (ECF No. 17 at 4-8, 8-11, 11-28.) Dominion argues

Plaintiff’s amendments are undue because he has had multiple opportunities to include DEFLLC

as a defendant, yet has inexplicably failed to do so. (Id. at 6.) Dominion argues Plaintiff presents

no reason at all for his delay, despite being made aware on multiple occasions that he had filed suit

against the wrong party. (Id.) As for Plaintiff’s other claims, Dominion argues Plaintiff sets forth

no reason why they were not made in his other various amended complaints. (Id. at 7.)

Next, Dominion argues Plaintiff’s amendments are unduly prejudicial because it has

already spent time and resources crafting a motion to dismiss Plaintiff’s TAC. (Id. at 8.) More so

than that, Dominion argues it will be forced to spend time and resources reevaluating its best

available defense. (Id. at 9.) Dominion also claims that the addition of several new parties will

dramatically increase defense costs related to discovery. (Id. at 10.) In addition, Dominion claims

that due to the passage of time, Mackenzie and Sauer have moved away from the area. (Id.) Since

Plaintiff failed to include these parties in his various complaints, Dominion argues it is now asked

to unfairly incur increased expenses related to this late addition. (Id.)

Dominion additionally claims that most of Plaintiff’s proposed amendments are futile. It

claims that for the same reasons as above, Plaintiff’s claims for discrimination under Title VII and

the PHRA are untimely asserted against DEFLLC because the new claims do not relate back to

the date of the original complaint pursuant to Fed. R. Civ. P. 15(c)(1)(C)(ii). (Id. at 11-18.)

Dominion argues that Plaintiff made a strategic decision to exclude DEFLLC, and thus it was not

on notice that but for Plaintiff’s mistake a suit would be brought against it. (Id.) Dominion also

claims Plaintiff failed to exhaust his administrative remedies alleging race discrimination against

DEFLLC. (Id.)

Dominion further claims Plaintiff fails to state a claim under Section 1981 because he again

fails to identify any contract which might apply, and fails to demonstrate the proposed defendants

discriminated on any prohibited basis. (Id. at 21-24.) Dominion next asserts Plaintiff has failed to

properly plead the elements of promissory estoppel against DEFLLC because the theory only

applies to enforce a promise in where there has been no consideration. (Id. at 24-25.) It also argues

Plaintiff fails to state a claim for breach of an implied employment contract against DEFLLC

because Plaintiff is unable to rebut the strong presumption in Pennsylvania for at-will employment

relationships. (Id. at 25-26.) Dominion acknowledges relocation expenses have occasionally

functioned as additional consideration necessary to justify a court’s finding of an employment

contract, but distinguishes the present case by the fact that Plaintiff remained employed for several

years after his hire. (Id. at 26.) Lastly, Dominion maintains relocation benefits are not earned fringe

benefits as a matter of law under the WCPL, and thus an amendment adding any defendant under

such a theory would be futile. (Id. at 27-28.)6

2. Plaintiff is not Entitled to Leave to Amend his Complaint for the Fourth

Time

This Court exercises its considerable discretion to deny Plaintiff’s request for leave to

amend his complaint for the fourth time. Plaintiff exhibited undue delay in failing to include the

additional parties he now seeks to assert, and as a result, he is foreclosed from amending his

6 Dominion also claims that, while it is a separate entity from NEI, the claim against it is futile under the

gist of the action doctrine. (Id. at 28 (citing Alpart v. Gen. Land Partners, Inc., 574 F.Supp.2d 491 (E.D.

Pa. 2008) (“A tortious interference with contract claim is barred by the gist of the action doctrine if it is not

independent of a contract claim that is pled along with it.”).)

complaint again. Moreover, Plaintiff’s amendments are futile since he made the deliberate decision

to file suit against Dominion singularly.

As stated above, under Federal Rule of Civil Procedure 15, leave of court may be granted

to a party in order to amend a complaint “when justice so requires.” Fed. R. Civ. P. 15(a)(2).

“Among the grounds that could justify a denial of leave to amend are undue delay, bad faith,

dilatory motive, prejudice, and futility.” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410,

1434 (3d Cir. 1997). The passage of time alone is insufficient to deny leave to amend. Cornell &

Co., Inc. v. Occupational Safety & Health Review Comm'n., 573 F.2d 820, 823 (3d Cir. 1978).

However, “delay becomes undue when it places an unwarranted burden on the court, or when the

plaintiff has had previous opportunities to amend.” Cureton v. Nat’l Collegiate Athl. Assoc., 252

F.2d 267, 273 (3d Cir. 2001). The focus in examining undue delay is “on the movant’s reasons for

not amending sooner” and the burden it creates. Id. at 273; see also Coventry v. U.S. Steel Corp.,

856 F.2d 514, 520 (3d Cir. 1988).

An amendment relates back to the date of the original pleading when “but for a mistake

concerning the proper party’s identity” the proper party “knew or should have known that the

action would have been brought against it.” Fed. R. Civ. P. 15(c)(1)(C)(ii). The Third Circuit has

stated that the core of this inquiry is “what the prospective defendant knew or should have known

after the initial pleading was filed.” Fetterman v. Westmoreland Cnty. Children’s Bureau, 681 Fed.

App’x 166, 169 (3d Cir. 2017) (quotation omitted). Where a plaintiff “makes a deliberate choice

to sue one party instead of another while fully understanding the factual and legal differences

between the two,” he will be barred from asserting a new claim. Id. However, where a plaintiff

clearly indicates a misunderstanding as to the newly added defendant’s role, the amended pleading

will be allowed to relate back to the date of the original pleading. Krupski v. Costa Crociere S. p.

A., 560 U.S. 538, 556 (2010).

Plaintiff is not permitted to amend his complaint a fourth time because of his undue delay

in including new parties and theories of liability in this suit. Plaintiff has been aware since its

inception that DEFLLC was his employer, and not Dominion. However, Plaintiff continued to

make the strategic decision to exclude DEFLLC from this suit, and is not allowed now to reverse

course with no explanation. Plaintiff was informed early on that DEFLLC was his employer, and

thus any employment-related suit was properly directed towards it, rather than Dominion.7 In every

permutation of his complaint, he even states that DEFLLC was not in fact his employer. Plaintiff

sets forth no reason why he did not include DEFLLC (or Mackenzie, Sauer, and NEI) in any of his

four previous complaints and gives this Court no insight regarding whether his decision (or

dereliction) warrants leave to remedy. His decision to now attempt to recover from DEFLLC and

its agents does not excuse him from his previous failures to include these parties. See Rolo v. City

Investing Co. Liquidating Trust, 155 F.3d 644 (3d Cir. 1998) (rejecting proposed amended

complaint where amendments could have been pled earlier). Rather, it highlights Plaintiff’s

knowledge of DEFLLC’s role under the facts of this case, and his deliberate choice to pursue

recovery from a different organization up until this point. Plaintiff had previous opportunities to

reach the decision to pursue his claims against his employer. However, he failed to consider it or

opted not to. Regardless, the ultimate outcome is his lengthy delay for which he gives no

justification. As a result, his delay in bringing this suit against these parties is undue and leave to

amend will not be permitted.

7 Presumably, Plaintiff made the choice to include only Dominion because, as Plaintiff writes,

DEFLLC is now a “defunct” and “assetless” organization. (TAC, ¶ 3.)

Similarly, Plaintiff cannot offer a reason why he now seeks to include several new theories

of liability that were available to him during the numerous times he amended his complaint. Again,

Plaintiff gives the Court no reason to consider for his failure to include additional Title VII and

contractual claims. Given the number of amendments, this Court is particularly loathe to allow

additional changes to Plaintiff’s pleading, since parties are strongly encouraged to carefully

consider their allegations (and the parties against whom they claim them) before filing. See, e.g.,

Cureton v. NCAA, 252 F.2d 267 (3d Cir. 2001).

Though he does not address his delay, Plaintiff asserts his request is nonetheless

permissible because his proposed changes relate back to the date of his original complaint. He

alleges DEFLLC knew or should have known of the pending lawsuit since Dominion and DEFLLC

are intermingled. As his sole piece of evidence, Plaintiff claims the organizations share a legal

department. However, Plaintiff’s claims are futile. It is not clear that DEFLLC knew or should

have known the action would have been brought against it. Rather, Plaintiff’s actions indicate his

clear intent to file suit against Dominion, rather than DEFLLC. Plaintiff clearly understood the

differences between Dominion and DEFLLC. More so than that, Plaintiff’s actions indicate a clear

lack of any mistake in naming the parties against whom he has sought a determination of liability.

Plaintiff attempts to clear this hurdle by indicating Dominion and DEFLLC share a common legal

department, though this is hardly notable as the entities share a parent/subsidiary relationship.

Having some overlap in enterprise operations is certainly to be expected. Plaintiff also indicates

that through discovery, he hopes to prove the intermingled nature of the two organizations.

However, discovery is not permitted to justify a litigant’s belief or feeling. Since Plaintiff’s claims

do not relate back to the date of his original filing, they are futile and accordingly will not be

allowed by this Court.

C. Dominion’s Motion for Rule 11 Sanctions

Dominion argues Rule 11 sanctions are justified because Plaintiff’s claims are frivolous.

(ECF No. 21.) Dominion argues that after three amended complaints, Plaintiff has failed to state a

single fact to support any plausible claim against Dominion since Dominion never entered in any

employment-related contracts and “simply averring that [Dominion] is the parent company of

DEFLLC is not enough to attribute DEFLLC’s action to [Dominion].” (Id. at 16 (citing Travelers

Indem. Co. v. Cephalon, Inc., 32 F.Supp.3d 538, 556 (E.D. Pa. 2014).) Further, Dominion

reiterates Plaintiff’s failure to timely file his claims or exhaust all administrative remedies. (Id. at

18-21.)

In response, Plaintiff alleges that sanctions are not warranted because he acted reasonably

in only filing suit against Dominion. (ECF No. 23.) Plaintiff argues this is so because he plans on

acquiring evidence through discovery that warrants veil-piercing. (Id. at 5.) Further, Plaintiff

argues his allegations plausibly assert Dominion was also his employer under a joint employer or

single employer theory. (Id. at 6-9.) In sum, Plaintiff claims sanctions are not warranted because

they rest on valid factual and legal theories of liability. (Id. at 9.)

This court concludes Rule 11 sanctions are not warranted. The onus placed on Dominion

following Plaintiff’s numerous amended complaints simply does not rise to a level in which

sanctions should be awarded. Nothing in Plaintiff’s various complaints suggest they were filed for

any dilatory reason. Further, Plaintiff’s claims were sufficiently grounded in law and fact to not

consider them frivolous for Rule 11 purposes. Though Plaintiff delayed in properly amending his

complaint to bring his suit against his employer, there is no reason to think Plaintiff did this for

any sanctionable reason. Rather than being frivolous, Plaintiff’s claims are simply unjustifiable for

the reasons explained above.

IV. CONCLUSION

For the foregoing reasons, Dominion’s Motion to Dismiss will be granted, Plaintiff’s

Motion for Leave to Amend will be denied, and Dominion’s Motion for Sanctions will be denied.

BY THE COURT:

Judge John Milton Younge