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Krekelberg v. City of Minneapolis

United States District Court, D. Minnesota

July 30, 2018

Amy Elizabeth Krekelberg, Plaintiff,
v.
City of Minneapolis; Minneapolis Park & Recreation Board; Keith Rowland, acting in his individual capacity as an Officer of the Minneapolis Park and Recreation Board Police Department; John Wurm, in his individual capacity as a Park Patrol Agent of the Minneapolis Park and Recreation Board Police Department; Mark Gasior, acting in his individual capacity as an Officer of the Minneapolis Police Department; Heather Jorges, acting in her individual capacity as an Officer of the Minneapolis Police Department; Matthew Olson, acting in his individual capacity as an Officer of the Minneapolis Police Department; John and Jane Does 1-1000, acting in their individual capacity as supervisors, officers, deputies, staff, investigators, employees or agents of the other governmental agencies; Entity Does 1-50, including cities, counties, municipalities, and other entities sited in Minnesota, Defendants.

          Jeffrey M. Montpetit, Esq., Marcia K. Miller, Esq., and Susan M. Holden, Esq., SiebenCarey, P.A.; and Lorenz F. Fett, Jr., Esq., Sonia L. Miller-Van Oort, Esq., Robin M. Wolpert, Esq., and Jonathan A. Strauss, Esq., Sapientia Law Group PLLC; counsel for Plaintiff.

          Brian Scott Carter and George Norris Henry, Assistant City Attorneys, Minneapolis City Attorney's Office, counsel for Defendants City of Minneapolis and Heather Jorges.

          Ann E. Walther, Esq., and Erik Bal, Esq., Rice, Michels & Walther, LLP, counsel for Defendants Minneapolis Park & Recreation Board, Keith Rowland, and John Wurm.

          Joseph E. Flynn, Esq., Jason M. Hill, Esq., Jardine Logan & O'Brien PLLP, counsel for Defendant Matthew Olson.

          REDACTED MEMORANDUM OPINION AND ORDER

          DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         This matter is before the Court on Defendant City of Minneapolis's Motion for Judgment on the Pleadings (Doc. No. 446) and Plaintiff's Motion for Partial Summary Judgment (Doc. No. 451). For the reasons set forth below, the Court denies the motions. Also before the Court is Plaintiff's appeal (Doc. No. 440) of Magistrate Judge Tony N. Leung's August 9, 2017 Order addressing a number of discovery motions (Doc. No. 430). Upon careful review, the Court sustains Plaintiff's objection and respectfully sets aside the Magistrate Judge's order to the extent it precludes the parties from seeking attorney fees and costs in connection with particular discovery motions.

         BACKGROUND

         This case relates to the alleged unlawful access of Plaintiff Amy Elizabeth Krekelberg's personal information by various government entities and their employees. According to Plaintiff, Defendants viewed her information-contained in the Department of Vehicle Services' (“DVS”) motor-vehicle records database for Minnesota drivers-in violation of the Driver's Privacy Protection Act, 18 U.S.C. § 2721, et seq. (“DPPA”). A prior order in this case, issued on November 7, 2014, contains a summary of Krekelberg's factual allegations. (Doc. No. 118.) The Court incorporates that summary by reference. The specific procedural and factual background relevant to each of the pending motions is detailed below.

         DISCUSSION

         I. City of Minneapolis's Motion for Judgment on the Pleadings

         A. Background

         On December 17, 2013, Plaintiff filed the original Complaint in this matter against numerous entity defendants as well as individual officers identified as John and Jane Doe. (Doc. No. 1 at 1-2.) Approximately eighteen months later, [1] on June 16, 2015, Plaintiff filed an Amended Complaint naming individual Doe defendants. (Doc. No. 137 at 1-6.) The Amended Complaint alleged DPPA violations against all defendants, including vicarious liability against entity defendants for the actions of the individual defendants. (See Id. ¶¶ 277-98.)

         On August 19, 2016, the Court concluded that the claims against numerous individual named defendants were barred by the statute of limitations. (Doc. No. 246 at 13-18.) Thus, the Court dismissed the claims against these defendants with prejudice, and they were dismissed from the lawsuit. (See Id. at 22-23.) Minneapolis now seeks judgment on the pleadings, arguing that the dismissal of the claims against these individual officers mandates dismissal of the corresponding vicarious liability claims against Minneapolis. (See Doc. Nos. 446, 448.)

         B. Legal Standard

         A party may move for judgment on the pleadings at any point after the close of the pleadings, so long as it moves early enough to avoid a delay of trial. Fed.R.Civ.P. 12(c). “Judgment on the pleadings is appropriate only when there is no dispute as to any material facts and the moving party is entitled to judgment as a matter of law[.]” See Ashley Cty. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009) (quoting Wishnatsky v. Rovner, 433 F.3d 608, 610 (8th Cir. 2006)). The Court evaluates a motion for judgment on the pleadings under the same standard as a motion brought under Federal Rule of Civil Procedure 12(b)(6). See id.

         In deciding a motion to dismiss under Rule 12(b)(6), a court assumes all facts in the complaint to be true and construes all reasonable inferences from those facts in the light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). In doing so, however, a court need not accept as true wholly conclusory allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions drawn by the pleader from the facts alleged, Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990).

         To survive a motion to dismiss, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although a complaint need not contain “detailed factual allegations, ” it must contain facts with enough specificity “to raise a right to relief above the speculative level.” Id. at 555. As the Supreme Court reiterated, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, ” will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). In sum, this standard “calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim].” Twombly, 550 U.S. at 556.

         C. Minneapolis's Vicarious Liability for Time-Barred Officers

         Minneapolis argues that the prior dismissal of Plaintiff's claims against individual Minneapolis officers on statute-of-limitations grounds bars Plaintiff's vicarious liability claims against Minneapolis based on those officers' lookups. Because these officers have been dismissed from the action with prejudice, Minneapolis argues, the Court should hold as a matter of law that the corresponding vicarious liability claims against Minneapolis based on those officers' conduct are barred. Minneapolis emphasizes that Plaintiff must establish the underlying liability of these officers under the DPPA in order to assert successful vicarious liability claims against Minneapolis. However, Minneapolis contends, Plaintiff cannot establish these officers' liability because a statute-of-limitations dismissal operates as an adjudication on the merits of Plaintiff's claims under the federal common law as well as the Federal Rules of Civil Procedure. As a result, Minneapolis suggests, this dismissal has a preclusive effect as to subsequent claims. Minneapolis argues that the case law reaching a different conclusion is either distinguishable or wrong. Further, Minneapolis asserts that policy considerations weigh against imposing vicarious liability based on these time-barred claims.

         Plaintiff, on the other hand, argues that the statute-of-limitations dismissal of the individual officers does not exonerate Minneapolis for these officers' conduct. As a preliminary matter, Plaintiff contends that a motion seeking judgment on the pleadings should only address the pleadings. In her complaint, Plaintiff contends, she has adequately pled Minneapolis's vicarious liability for its officers' actions. In addition, Plaintiff suggests that the majority of courts hold that a dismissal on statute-of-limitations grounds does not eliminate the liability of the principal. According to Plaintiff, the cases cited by Defendant holding otherwise are not persuasive. Plaintiff also disputes Defendant's suggestion that res judicata or collateral estoppel have any application here because the claims at issue are not identical, and the court did not address the underlying facts relating to the officers' liability. Relatedly, Plaintiff emphasizes that a statute-of-limitations defense is personal to the individual and notes that Plaintiff could have sued Minneapolis alone for vicarious liability without even adding the individual officers as Defendants. Finally, Plaintiff argues that policy considerations support imposing vicarious liability against Minneapolis for its officers' conduct.

         Minneapolis has identified caselaw out of seven jurisdictions which holds that a statute-of-limitations dismissal of an agent bars the imposition of vicarious liability against the principal. See Preis v. Lexington Ins. Co., 508 F.Supp.2d 1061, 1078 (S.D. Ala. 2007), aff'd, 279 Fed.Appx. 940 (11th Cir. 2008); Al-Shimmari v. Detroit Med. Ctr., 731 N.W.2d 29, 36-38 (Mich. 2007); Stephens v. Petrino, 86 S.W.3d 836, 843 (Ark. 2002); Buettner v. Cellular One, Inc., 700 So.2d 48, 48-49 (Fla. Dist. Ct. App. 1997); Greco v. Univ. of Del., 619 A.2d 900, 903-04 (Del. 1993); Karaduman v. Newsday, Inc., 416 N.E.2d 557, 563 (N.Y. 1980);[2] Kapitan v. DT Chicagoland Express Inc., Civ. No. 2:12-321, 2013 WL 5655704, at *2-4 (N.D. Ind. Oct. 15, 2013). Minneapolis also cites Brown v. Garlich Printing Co., Civ. No. 4:07CV1668, 2008 WL 942861 (E.D. Mo. Apr. 7, 2008), which holds that “[d]ismissal for failure to comply with the statute of limitations operates as an adjudication on the merits, ” thereby rendering some support to Minneapolis's argument here. See Id. at *2.

         Of the cases cited by Minneapolis, the Michigan Supreme Court's Al-Shimmari decision contains the most thorough discussion of the issue presented and follows the reasoning advanced by Minneapolis here. See Al-Shimmari, 731 N.W.2d at 36-38. Specifically, the court focused on the fact that the dismissal of the plaintiff's claims against the agent based on the statute of limitations “operate[d] as an adjudication on the merits” under the relevant rule of procedure, precluding an underlying finding of negligence to support vicarious liability against the remaining defendant principals. Id. at 37 (quoting MCR 2.504(B)(3)). Other courts have applied similar reasoning to reach this outcome. See Buettner, 700 So.2d at 48-49; Greco, 619 A.2d at 903-04.

         In contrast, Plaintiff has identified four jurisdictions that permit vicarious liability claims to proceed even if the claim against the agent is barred by the statute of limitations. See Stanley ex rel. Estate of Hale v. Trinchard, 579 F.3d 515, 520-21 (5th Cir. 2009) (applying Louisiana law); Juarez v. Nelson, 2003-NMCA-011, ¶¶ 26-29, 61 P.3d 877, 886-87, overruled on other grounds by Tomlinson v. George, 2005-NMSC-020, 116 P.3d 105; Cohen v. Alliant Enters., Inc., 60 S.W.3d 536, 537-39 (Ky. 2001); Leow v. A & B Freight Line, Inc., 676 N.E.2d 1284, 1285-89 (Ill. 1997). Plaintiff also relies on decisions out of the Eighth Circuit which appear to support permitting vicarious liability in analogous circumstances. See Byrd v. J Rayl Transp., Inc., 106 F.Supp.3d 999, 1001-02 (D. Minn. 2015); Gronseth v. Chester Rural Fire Prot. Dist., Civ. No. 07-4163, 2009 WL 983130, at *2-5 (D.S.D. Apr. 9, 2009).

         Under the circumstances of this case, the Court will permit the vicarious liability claims against Minneapolis to proceed. Both parties acknowledge that there is no binding precedent on this issue, and after reviewing competing authorities, the Court is persuaded that Minneapolis should not be permitted to avoid liability for three reasons.

         First, the Court is persuaded that there is a meaningful distinction between a dismissal that actually confronts the merits of the agent's liability and a dismissal for some other purely procedural or tactical reason. This distinction is relevant because, as numerous courts have acknowledged, vicarious liability is based on the underlying conduct of the agent. Where an agent has been dismissed for reasons that do not address the actual merits of the plaintiff's claim, the agent's liability may still be established in the agent's absence. As explained in the Byrd decision:

All [plaintiff] must do in order to recover from [the principal] is establish that [the agent] was negligent; he need not proceed directly against [the agent], and hence it makes no difference whether a claim against [the agent] would be barred by the [relevant] statute of limitations or could not be brought in [the forum state] for jurisdictional reasons.

Byrd, 106 F.Supp.3d at 1002; see also 2A C.J.S. Agency § 463 (June 2018 Update) (“[I]t is essential that the tort liability of the agent be established, but the fact that an agent is able to escape liability because the statute of limitations has run as to the agent will not necessarily insulate the principal from vicarious liability.”). Courts in multiple jurisdictions have applied similar reasoning. See Cohen, 60 S.W.3d at 538 (“It is the negligence of the servant that is imputed to the master, not the liability.”); Women First OB/GYN Assocs., L.L.C. v. Harris, 161 A.3d 28, 30, 45 (Md. Ct. Spec. App. 2017) (permitting vicarious liability notwithstanding the agent's voluntary dismissal, in part because “the merits of the tort claim against the agent have not actually been adjudicated before the dismissal”); Juarez, 2003-NMCA-011, ¶ 28, 61 P.3d at 886 (“‘[E]xoneration of the servant' commonly is understood to mean acquittal of the employee or agent following a trial on the merits.”); Gallegos v. City of Monte Vista, 976 P.2d 299, 301 (Colo.App. 1998) (“[A]lthough a finding that an employee is not negligent requires a finding that the employer is not legally responsible, an action may proceed against an employer if the claim against the employee has been dismissed or barred, not on the merits of the claim, but on procedural grounds.”).

         In Hughes v. Doe, 639 S.E.2d 302 (Va. 2007), the Supreme Court of Virginia addressed markedly similar circumstances to this case. Specifically, plaintiff filed a complaint against a medical facility and its employee, identified as “Jane Doe” in the original complaint. Id. at 303. The plaintiff moved to amend her complaint to name the employee once she learned her identity, but the trial court ultimately dismissed the employee from the action with prejudice based on the statute of limitations. Id. The lower court determined that the medical facility could not be held vicariously liable for the dismissed employee's conduct, but the Supreme Court of Virginia reversed, emphasizing “the fact that the crux of respondeat superior liability is a finding that the employee was negligent.” Id. at 303-04. It explained that the lower court's dismissal order “was not a holding on the merits of [the agent's] alleged negligence and therefore neither exonerated [the medical facility] nor otherwise precluded [the plaintiff] from pursuing her claim against [the medical facility] for [the agent's] negligence on a theory of respondeat superior.” Id. at 304. The Court agrees with these cases that a dismissal based on the statute of limitations should not operate to preclude vicarious liability because it does not actually address if the agent's conduct supports an actionable claim.

         Second, the Court is not persuaded that principles of res judicata and collateral estoppel control the issue before the Court. In particular, the Court finds the reasoning of the United States District Court for the District of South Dakota in Gronseth to be persuasive on this issue. Gronseth involved a vehicle accident between plaintiff and a volunteer firefighter, Bauman, employed by defendants Chester Rural Fire Protection District and Chester Fire Department (“Chester Fire”). Gronseth, 2009 WL 983130, at *1. The plaintiff's lawsuit included a claim of negligence against Bauman and alleged vicarious liability against Chester Fire. Id. The parties agreed to voluntarily dismiss Bauman, and the district court entered a dismissal “with prejudice and on the merits.” Id. As Minneapolis argues here, Chester Fire argued that the vicarious liability claim was subject to dismissal because Bauman had been dismissed. Id. The district court acknowledged the basic premise “that, generally, a voluntary dismissal with prejudice constitutes a final judgment on the merits for purposes of res judicata.” Id. at *3. However, the court declined to hold that Bauman's dismissal precluded the plaintiff's vicarious liability claim against Chester Fire. Id. at *5.

         Relying on Eighth Circuit precedent discussing res judicata and collateral estoppel principles, the court determined that “the intent of the parties, no consideration, and the lack of any actual adjudication” made it improper to dispose of the plaintiff's vicarious liability claim. Id. at *3-4. In particular, the court noted the Eighth Circuit's recognition “that both res judicata and collateral estoppel ‘are premised on a finding that there has been an adjudication on the merits in a prior proceeding.'” Id. at *3 (quoting Gall v. S. Branch Nat'l Bank of S.D., 783 F.2d 125, 127 (8th Cir. 1986) (emphasis in original)). In addition, the court pointed to the Eighth Circuit's determination that collateral estoppel “is appropriate only if ‘it is clearly shown that the parties intended to foreclose a particular issue in future litigation.'” See Id. at *4 (quoting United States v. Brekke, 97 F.3d 1043, 1049 (8th Cir. 1996)). The Court finds that these governing principles are relevant and the reasoning in Gronseth is persuasive here. Because there has been no actual adjudication of liability with respect to the individual officers' conduct and because the parties did not clearly contemplate that the statute-of-limitations dismissals of the individual officers would preclude Minneapolis's vicarious liability, the Court declines to apply principles of res judicata or collateral estoppel to bar Plaintiff's vicarious liability claims in this matter.

         Third, the Court rejects the notion that Federal Rule of Civil Procedure 41(b) easily disposes of the issue as Minneapolis suggests. This rule provides that “[u]nless the dismissal order states otherwise, a dismissal under this subdivision (b) [addressing involuntary dismissals] and any dismissal not under this rule-except for one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19-operates as an adjudication on the merits.” Fed.R.Civ.P. 41(b). Likewise, as Minneapolis points out, “the federal rule is that ‘the rules of finality . . . treat a dismissal on statute-of-limitations grounds the same way they treat a dismissal for failure to state a claim, for failure to prove substantive liability, or for failure to prosecute: as a judgment on the merits.'” Manalo v. Wyeth, Civ. No. 07-4557, 2008 WL 2705495, at *3 n.4 (D. Minn. July 9, 2008) (quoting Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 228 (1995)). However, the fact that Plaintiff's claims against the individual officers have been dismissed “on the merits” as to the individual officers does not plainly establish that Minneapolis cannot now be held liable for their alleged unlawful conduct.

         Multiple courts addressing similar circumstances have rejected the notion that an “on-the-merits” dismissal of an agent plainly disposed of the corresponding vicarious liability claim against the principal. See, e.g., Gronseth, 2009 WL 983130, at *3-5. In Leow, for example, the Supreme Court of Illinois recognized Illinois Supreme Court Rule 273[3] which is analogous to Federal Rule of Civil Procedure 41(b) as well as an Illinois case establishing “that the dismissal of a claim on statute of limitation grounds operate[s] as an adjudication on the merits.” See Leow, 676 N.E.2d at 1287. However, the court rejected the defendant's argument that this rule precluded vicarious liability against the principal following a statute-of-limitations dismissal of the agent. See Id. at 1286-89. It explained that “[w]here a different defendant is involved, . . . Rule 273 cannot be applied mechanically, because doing so would yield absurd and unjust results.” Id. at 1287-88. Ultimately, the court determined ‚Äúthat the policy behind Rule 273, and its model, Federal Rule 41(b), would not be furthered by treating an ...


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