Scott v. U.S. Bank National Assn

Case: 21-10031 Document: 00516107953 Page: 1 Date Filed: 11/26/2021

REVISED 11/26/2021

United States Court of Appeals

United States Court of Appeals

for the Fifth Circuit

Fifth Circuit

FILED

November 2, 2021

Lyle W. Cayce

No. 21-10031 Clerk

Paul Scott,

Plaintiff—Appellant,

versus

U.S. Bank National Association, doing business as U.S. Bank,

Defendant—Appellee.

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 3:20-CV-2380

Before King, Smith, and Haynes, Circuit Judges.

Per Curiam:

Paul Scott appeals the judgment of the district court dismissing his

civil rights action. For the following reasons, the judgment is affirmed in part,

reversed in part, and remanded for further proceedings.

I.

Plaintiff-appellant Paul Scott brought this civil rights action against his

former employer, defendant-appellee U.S. Bank. Scott alleges that U.S. Bank

violated 42 U.S.C. § 1981 by taking retaliatory employment actions against

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him because he opposed racial discrimination occurring within his

department.

Scott is an African American male. U.S. Bank hired Scott in March

2016 as a Default Management Support Specialist in its underwriting

department. Between March 2016 and January 2018, Scott received

exclusively positive reviews as well as one merit increase. Scott was also

encouraged to apply for management positions by his Human Resources

Business Partner, Lakisha Carman.

In January 2018, Scott overheard a manager in his department, Craig

Seward, a white male, tell Scott’s direct supervisor, Damarris Triggs, an

African American male, that he “intended to terminate four (4) African

American employees.” Scott then warned those employees. One of those

employees complained to the human resources department, which led to

Carman’s requesting that Scott provide a statement about the incident. Scott

agreed, but he expressed concern that U.S. Bank may retaliate against him

because of the statement. Carman assured Scott that he would not face

retaliation.

Despite such assurance, Scott claims that U.S. Bank then started to

retaliate. In February 2018, Bennie Wyatt, Triggs’s boss, began failing

Scott’s loans despite those loans’ alleged passing under the policy and

procedure guide. On February 22, 2018, Scott complained to Triggs that

Wyatt was failing his loans in retaliation for Scott’s statement. Then, on the

following day, Wyatt and Triggs gave Scott a verbal warning about his

purportedly poor performance. Throughout March 2018, Scott also

experienced issues with his work badge that Triggs did not assist him with.

Around April 30, 2018, Scott called Carman and left a message

expressing his belief that these occurrences were in retaliation for his

statement. Carman emailed Scott and informed him that “she was no longer

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his HR professional,” directing him instead to HR Business Partner Molly

Werner. Scott met with Werner, but he found that she “was antagonistic and

dismissive of Scott’s complaints.”

In May 2018, Wyatt told Scott that, due to Scott’s poor April

production numbers, Scott was required to attend a refresher course. At that

course, the trainer used Scott’s loan documents to teach the class, describing

them “as a perfect example of how to write up a loan” and telling Scott that

“he did not need a refresher course because he was an expert.”

The day after the training, May 24, 2018, Triggs and Wyatt gave Scott

a second verbal warning for poor performance based on Scott’s April

production. Scott responded that he received a 97 percent score for the

month of May, the highest of his floor, but Wyatt told Scott that his “peaks

and valleys” were unacceptable. Scott said to Triggs, “really man this is

harassment.” Triggs then “hit the desk with his fist so hard that it could be

heard outside of the room,” and exclaimed “boy Mr. Paul!” Wyatt then

stood up and said, “hold on, don’t say no more.” Scott said to Wyatt, “this

is harassment are you trying to terminate me?” Wyatt replied, “no, but you

can give me your resignation, if you want to.” Wyatt then suggested that

Scott take an “ad hoc vacation day” and that they would “start fresh” the

next day. Finally, Wyatt told Scott, “by the way, before you leave you can

call HR if you want to. I have her number for you.” Scott interpreted this to

be a veiled threat regarding his prior complaints.

The next morning, Scott was terminated. Wyatt told Scott that he was

“one good underwriter, but we have to terminate you because you are a

threat to 20 underwriters.” Scott asked what Wyatt meant by that, but Wyatt

did not provide an explanation. Scott then reminded Wyatt that on February

13, 2018, a white female coworker had yelled and cursed at Seward and Triggs

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but was not terminated. He asked why his conduct was more threatening than

hers, but Wyatt did not respond.

Scott filed suit against U.S. Bank for unlawful retaliation under 42

U.S.C. § 1981. U.S. Bank moved to dismiss the complaint for failure to state

a claim, which the district court granted with prejudice. The court found that

Scott could not state a claim for retaliation because he failed to allege that he

participated in a protected activity under § 1981. The district court correctly

explained that to have participated in a protected activity, Scott must have

opposed his employer’s unlawful practice. The court then found that Scott’s

statement to the human resources department and follow-up complaints

constituted opposition. But, while Scott’s conduct was opposition, the

district court concluded it could not qualify as a protected activity because

Scott could not demonstrate that he had a reasonable belief that the employer

was engaged in unlawful employment practices. Further, the court denied

Scott leave to amend his complaint, finding that any amendment would be

futile due to “[t]he complete lack of corroborating circumstantial facts

regarding Seward’s alleged racial discrimination.”

Scott appeals both the denial of his request for leave to amend his

complaint and the finding that he was not engaged in a protected activity

under Title VII.

II.

We begin by determining whether the district court erred in denying

Scott leave to amend his complaint.

A.

A district court’s denial of leave to amend is ordinarily reviewed for

abuse of discretion. City of Clinton v. Pilgrim’s Pride Corp., 632 F.3d 148, 152

(5th Cir. 2010). That said, when a district court’s “denial of leave to amend

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was based solely on futility, we apply a de novo standard of review identical,

in practice, to the standard used for reviewing a dismissal under Rule

12(b)(6).” Id. When reviewing a dismissal under Rule 12(b)(6), “[w]e accept

all factual allegations in the pleadings as true.” Aldridge v. Miss. Dep’t of

Corr., 990 F.3d 868, 873 (5th Cir. 2021). The plaintiff must plead specific

facts that support a facially plausible claim for relief. Powers v. Northside Indep.

Sch. Dist., 951 F.3d 298, 305 (5th Cir. 2020).

B.

A court should freely give leave to amend when justice so requires,

Fed. R. Civ. P. 15(a)(2), but a movant must give the court at least some

notice of what his or her amendments would be and how those amendments

would cure the initial complaint’s defects. Thomas v. Chevron U.S.A., Inc.,

832 F.3d 586, 590 (5th Cir. 2016). If the plaintiff does not provide a copy of

the amended complaint nor explain how the defects could be cured, a district

court may deny leave. McKinney v. Irving Indep. Sch. Dist., 309 F.3d 308, 315

(5th Cir. 2002) (affirming denial of leave to amend where plaintiffs “failed to

amend their complaint as a matter of right, failed to furnish the district court

with a proposed amended complaint, and failed to alert both the court and

the defendants to the substance of their proposed amendment”).

Here, Scott argued in full: “Plaintiff asserts that his original complaint

is sufficient to state a claim and should survive Defendant’s 12(b)(6) motion.

Should this Court disagree, Plaintiff requests the opportunity to amend his

complaint in accordance with the federal and local rules.” Scott failed to offer

any grounds as to why his leave should be granted or how deficiencies in his

complaint could be corrected. Therefore, the district court did not commit

error when it denied Scott’s request.

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III.

We now turn to whether the district court erred in finding Scott failed

to state a claim under 42 U.S.C. § 1981 when it concluded that Scott did not

engage in a protected activity. It did.

A.

“We review a district court's ruling on a motion to dismiss de novo,

‘accepting all well-pleaded facts as true and viewing those facts in the light

most favorable to the plaintiffs.’ ” Anderson v. Valdez, 845 F.3d 580, 589 (5th

Cir. 2016) (quoting Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338 (5th

Cir. 2008)). “A claim will not be dismissed unless the plaintiff cannot prove

any set of facts in support of his claim that would entitle him to relief.”

Alexander v. Verizon Wireless Servs., L.L.C., 875 F.3d 243, 249 (5th Cir.

2017). To prevail against a motion to dismiss, “a plaintiff's complaint ‘must

contain sufficient factual matter, [if] accepted as true, to “state a claim to

relief that is plausible on its face.” ’ ” Anderson, 845 F.3d at 589 (quoting

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

B.

Section 1981 makes it unlawful to discriminate on the basis of race in

“mak[ing] and enforc[ing] contracts.” 42 U.S.C. § 1981(a). It encompasses

“complaint[s] of retaliation against a person who has complained about a

violation of another person’s contract-related ‘right.’ ” CBOCS W., Inc. v.

Humphries, 553 U.S. 442, 445 (2008). We examine retaliation claims under

Section 1981 using the “same rubric of analysis” as Title VII. Johnson v.

PRIDE Indus., Inc., 7 F.4th 392, 399 (5th Cir. 2021) (quoting Johnson v.

Halstead, 916 F.3d 410, 420 (5th Cir. 2019)).

An employee engages in a protected activity under Section 1981 when

“he has opposed any practice made unlawful by [Title VII].” 42 U.S.C. §

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2000e-3(a). In other words, to qualify as a protected activity, the employee’s

conduct must have “opposed” the employer’s practice and that opposed

practice must have been unlawful. Here, the district court found that Scott

opposed his employer’s practice. So, the only issue before this court is

whether Scott’s complaint plausibly alleged that the practice Scott opposed

was unlawful. 1 Importantly, a plaintiff need not demonstrate that the practice

was actually unlawful for his opposition to be a protected activity; rather, it is

enough that the plaintiff reasonably believed the practice was unlawful. EEOC

v. Rite Way Serv., Inc., 819 F.3d 235, 242 (5th Cir. 2016).

Scott contends that the district court erred by requiring that he satisfy

the McDonnell Douglas standard at the pleading stage. 2 If the district court

applied the appropriate pleading standard, he argues, it would have found

Scott adequately alleged facts supporting a reasonable belief that an unlawful

practice occurred.

It is true that the Supreme Court has held that the McDonnell Douglas

standard does not govern at the motion-to-dismiss stage. Swierkiewicz v.

1

U.S. Bank argues that we should also consider whether Scott failed to plead the

other elements of a retaliation claim, but since the district court did not address these

elements, we decline to decide them in the first instance. Montano v. Texas, 867 F.3d 540,

546 (5th Cir. 2017) (“ ‘As a court for review of errors,’ we do ‘not . . . decide facts or make

legal conclusions in the first instance,’ but ‘review the actions of a trial court for claimed

errors.’ ” (quoting Browning v. Kramer, 931 F.2d 340, 345 (5th Cir. 1991))).

2

McDonnell Douglas concerned the order of proof in an employment-

discrimination action when the employee submits no direct evidence of discrimination.

McDonnell Douglas Corp. v. Green, 411 U.S. 792, 800 (1973). It explained: “The

complainant in a Title VII trial must carry the initial burden under the statute of

establishing a prima facie case of racial discrimination. This may be done by showing (i) that

he belongs to a racial minority; (ii) that he applied and was qualified for a job for which the

employer was seeking applicants; (iii) that, despite his qualifications, he was rejected; and

(iv) that, after his rejection, the position remained open and the employer continued to seek

applicants from persons of complainant's qualifications.” Id. at 802.

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Sorema N.A., 534 U.S. 506, 510 (2002) (explaining that McDonnell Douglas is

“an evidentiary standard, not a pleading requirement”); see also Raj v. La.

State Univ., 714 F.3d 322, 331 (5th Cir. 2013) (“Inasmuch as the district court

required Raj to make a showing of each prong of the prima facie test for

disparate treatment at the pleading stage, the district court erred by

improperly substituting an ‘evidentiary standard’ for a ‘pleading

requirement.’ ” (quoting Swierkiewicz, 534 U.S. at 512)). That said, we have

recognized that McDonnell Douglas may still be used to frame the motion-to-

dismiss inquiry. E.g., Cicalese v. Univ. of Tex. Med. Branch, 924 F.3d 762, 767

(5th Cir. 2019) (“[I]t can be ‘helpful to reference’ [the McDonnell Douglas]

framework when the court is determining whether a plaintiff has plausibly

alleged the ultimate elements of the disparate treatment claim.” (quoting

Chhim v. Univ. of Tex. at Austin, 836 F.3d 467, 470 (5th Cir. 2016))). Applying

that framework must be done with care, however, as a court errs when it

“require[s] a plaintiff to plead something more than the ‘ultimate elements’

of a claim,” id. (quoting Chhim, 836 F.3d at 470), or “inappropriately

heightens the pleading standard by subjecting a plaintiff’s allegations to a

rigorous factual or evidentiary analysis under the McDonnell Douglas

framework in response to a motion to dismiss.” Id.

The district court plainly relied on McDonnell Douglas. It concluded

that “[a]s there is no direct evidence that Seward acted with racially

discriminatory intent, the burden-shifting standard established in [McDonnell

Douglas] controls.” Thus, we must determine whether, when the court found

that Scott could not have had a reasonable belief, it merely framed its inquiry

with the standard or prematurely engaged in a rigorous factual analysis better

reserved for a later stage of the proceedings.

Fortunately, we have much precedent to light the way. When

examining whether an employee’s belief that his employer engaged in an

unlawful act was reasonable, a court must ask whether a person, “not

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instructed on Title VII law as a jury would be, [could] reasonably believe that

she was providing information about a Title VII violation[.]” EEOC v. Rite

Way Serv., Inc., 819 F.3d 235, 242 (5th Cir. 2016) (citation omitted). This

inquiry is informed by the nature of the statement forming the base of the

alleged discrimination, whether the statement was directed at a particular

person or group of persons, whether it came from a person with supervisory

authority, and the setting where the employee’s complaint was voiced. Id. at

243-44.

In Rite Way, the employee, Tennort, who was a general cleaner for

Rite Way Service, Inc., witnessed a supervisor make two inappropriate

comments regarding the appearance of her co-worker. 819 F.3d at 238. Her

co-worker complained to a police officer that she was sexually harassed by

the supervisor, and she named Tennort as an eyewitness. Id. Rite Way began

an internal investigation about the incident and asked for Tennort’s

statement, though the human resources representative “tried to talk her out

of reporting what she had seen.” Id. at 238. Tennort gave a statement in spite

of that advice, and over the next five weeks, she received two written

warnings and two oral warnings about her job performance before ultimately

being terminated. Id. at 238-39. The district court granted summary

judgment to Rite Way, finding Tennort could not have reasonably believed a

Title VII violation occurred, id. at 239, and this court reversed. We found

that Tennort’s belief that an unlawful employment practice occurred could

be reasonable because those two statements were directed at a specific

employee and were made by someone in a supervisory position. Id. at 243-44.

This court also highlighted the importance of the fact that Tennort made her

statement in response to her employer’s investigation. Id. at 244. Because the

human resources department reached out to Tennort for her statement and

indicated her statement could result in consequences for the supervisor, how

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her employer handled the incident could have informed her reasonable belief.

Id.

Similarly, in Long v. Eastfield College, this court found that a fact issue

regarding reasonable belief precluded summary judgment. 88 F.3d 300, 306

(5th Cir. 1996). There, Long complained “to college officials about a sexually

explicit joke told by [another employee] in Long’s presence.” Id. at 305.

Thereafter, she was required to provide a report that was never previously

required, was “belittled . . . in front of male co-workers,” and ultimately had

her performance rating downgraded. Id. Long made additional complaints

claiming these were acts of retaliation. Id. We concluded that Long presented

sufficient evidence to support a reasonable belief that the employer violated

Title VII for the purposes of her retaliation claim. Id.

Construing the facts in the light most favorable to Scott, as we must at

this stage of the proceedings, he has successfully pleaded facts that could

support a reasonable belief. Scott alleged that he overheard a supervisor state

that “he intended to terminate four (4) African American employees.” A

supervisor’s considering of the race of an employee when deciding to

terminate that employee is an unlawful employment practice. 42 U.S.C. §

2000e-2(m) (“[A]n unlawful employment practice is established when the

complaining party demonstrates that race, color, religion, sex, or national

origin was a motivating factor for any employment practice, even though

other factors also motivated the practice.”); cf. Payne v. McLemore’s

Wholesale & Retail Stores, 654 F.2d 1130, 1139-41 & n.2 (5th Cir. Unit A. Sept.

1981) (noting a reasonable belief of discrimination was established “by virtue

of McLemore’s failure to hire blacks in or promote blacks to certain

employment positions”). In addition, Scott gave his statement reactively. A

human resources investigator approached him to give a statement regarding

the incident and assured him that he would not face retaliation for his

statement.

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This situation parallels Rite Way, where this court found reasonable

belief sufficiently established so as to preclude summary judgment. Rite Way,

819 F.3d at 245. Like in Rite Way, Scott overheard a supervisor make a

comment indicative of unlawful behavior; Scott then made his statement in

response to an investigator’s request and assurance of protection, which may

have informed his belief. After giving his statement, he alleges that the

company began to retaliate against him by denying his loans, giving him

multiple warnings, sending him to unnecessary training, and ultimately

terminating him. Considering Scott’s statement together with its

surrounding context, we find that he has successfully alleged facts that could

support a reasonable belief that his employer engaged in unlawful conduct.

The district court acknowledged these facts but discounted them by

taking note of other facts that could, but do not necessarily, make the initial

statement by Seward more innocuous. It explained that Scott’s belief could

not be reasonable because Seward made the statement to Triggs, who was

also African American and thus a member of the same protected class as the

employees. This was error. Analyzing facts to this extent at the motion-to-

dismiss stage mirrors the rigorous scrutiny that Cicalese prohibits. 924 F.3d

at 768 (finding a district court erred by determining whether a derogatory

statement was merely a “stray remark” at the motion-to-dismiss stage).

Moreover, it is not clear that the district court could give much weight to that

fact. See Castaneda v. Partida, 430 U.S. 482, 499 (1977) (“Because of the

many facets of human motivation, it would be unwise to presume as a matter

of law that human beings of one definable group will not discriminate against

other members of their group.”); Oncale v. Sundowner Offshore Servs., Inc.,

523 U.S. 75, 78 (1998) (“[W]e have rejected any conclusive presumption that

an employer will not discriminate against members of his own race.”).

The district court also noted that Scott did not allege Seward intended

to replace those four employees with members of an unprotected class, as

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may be required by McDonnell Douglas. McDonnell Douglas Corp. v. Green,

411 U.S. 792, 802 (1973). But since McDonnell Douglas cannot be dispositive

at this stage—and it is not guaranteed McDonnell Douglas will ultimately

apply, as discovery may reveal direct evidence—that requirement was

premature. Swierkiewicz, 534 U.S. at 511-12. Finally, the district court

observed that Scott failed to “allege[ a] pattern of disparate hiring, firing, or

promotions, [and] points to no additional racially charged remarks.” But

Scott did not need to allege a pattern or practice, because what he opposed

was the alleged discrete unlawful act of race-based termination. See Nat’l

R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 114-15 (2002) (distinguishing

between an unlawful employment practice that arises from a discrete

unlawful act, such as termination or refusal to hire, and the more continuous

conduct required to create a hostile work environment). Simply put, the

district court imposed on Scott a heavier burden than he was required to meet

at the pleading stage.

In summary, Scott sufficiently alleged facts that, interpreted in the

light most favorable to him, supported a reasonable belief that his employer

engaged in an unlawful practice. The district court erred when it engaged in

a factual analysis akin to McDonnell Douglas and discounted these facts. 3

Therefore, we AFFIRM the judgment of the district court as to the

denial of leave to amend the complaint but REVERSE the judgment of the

district court granting U.S. Bank’s motion to dismiss. We REMAND for

further proceedings.

3

Scott also contends that the district court erred by finding that Scott failed to state

a claim under the “participation clause” of 42 U.S.C. § 2000e-3(a). Because we find the

district court erred when it found Scott failed to state a claim based on opposition grounds,

we do not reach this question.

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