Dr12ord.txt
CIVIL RIGHTS COMMISSION
STATE OF HAWAI'I
WILLIAM D. HOSHIJO, Executive ) DOCKET NO. DR 98-0012
Director, on behalf of the )
complaint filed by SHAWN M. )
SMITH, )
)
vs. )
TABERU MANAGEMENT, INC. dba RB )
HONOLULU #1 and ARBY'S INC. )
)
Respondents. )
)
________________________________)
ORDER SUMMARILY DENYING PETITION FOR DECLARATORY RELIEF
I. INTRODUCTION
On February 27, 1998, the Executive Director ("Petitioner")
filed a Petition for Declaratory Relief seeking a declaration:
"Whether the Hearings Examiner correctly applied H.A.R. sec. 12-46-6.1
and the law in denying the Executive Director's Motion to Amend
filed 1/13/98[?]" Raymond G. David ("David") filed a Memorandum in
Opposition to the Petition on March 13, 1998. Respondents Taberu
Management, Inc. ("Taberu"), and Arby's Inc. ("Arby's") did not file
any memoranda.
II. MOTION TO AMEND
The Motion to Amend before the Hearings Examiner sought to add
David as a party in his capacity as an agent of Taberu and hold him
personally liable for discriminatory practices against Complainant
Shawn M. Smith ("Smith"). The decision to add David was made after
Taberu's insurer filed for bankruptcy in 1997[1].
Petitioner determined that Taberu had no assets to satisfy a
judgment for Smith, and alleged that David, as Taberu's president,
had approved or acquiesced in the decision not to reinstate Smith
after she gave birth and had personally profited from the sale of
Taberu's fast food franchise to Arby's[2]. The sale to Arby's was
conditioned upon the termination of all Taberu's employees and was
allegedly cited by David as the reason for not reinstating Smith.
See, Exhibit A, attached to Petition for Declaratory Relief.
H.A.R. sec. 12-46-6.1(a) provides, "After commencement of
proceedings, amendments may be granted by the hearings examiner."
H.A.R. sec. 12-46-6.1(b)(2) provides, "An amendment may be made ...
[t]o clarify or amplify allegations, to add new causes of action or
defenses, or add new parties." After receiving memoranda from the
parties and hearing argument, the Hearings Examiner denied the
motion to amend. Order Denying Executive Director's Motion to Amend
Complaint to Add Raymond G. David as a Respondent, filed on February
13, 1998.
III. STANDARD FOR DECIDING PETITION
H.A.R. sects. 12-46-63(b)(1) and (2) provide:
With respect to each petition to be considered, and as
expeditiously as possible, the commission shall:
(1) Summarily, and in writing, deny the petition,
setting forth the reasons for the denial and advise
petitioner of the right to request reconsideration
or judicial relief or grant the relief sought either
as prayed for or as modified by the commission,
setting forth the reasons therefor and advise
respondent, if any, of the right to request
reconsideration or judicial relief; [or]
(2) Set the petition for argument before the commission
in accordance with this subchapter; ....
The Commission chooses to summarily deny the Petition based upon the
submissions of Petitioner and David.
IV. DISCUSSION
The Commission recognizes the importance of enforcing Hawai`i's
anti-discrimination laws to provide full relief to victims of
discrimination. Hawai'i Const., Art. I, Sect. 5; H.R.S. sects. 368-1
and 17. While H.A.R. sec. 12-46-6.1(a) does not specify the standards
to followed by the Hearings Examiner in deciding a motion to amend,
the Commission recognizes the need to balance the goal of full
relief with the prejudice to potential parties sought to be included
by an amendment to the complaint during the contested case hearing
process.
Smith knew of David's alleged participation in the decision not
to reinstate her at the time she filed the administrative complaint,
on October 3, 1994. See, Affidavit of Smith, attached to Motion to
Amend. The administrative complaint names a Taberu vice president
as the person making the decision, but it does not mention David nor
allege his involvement in the reinstatement decision.
After the complaint was served, the Executive Director
conducted an investigation[3] and made a reasonable cause
determination naming Taberu and Arby's as the parties who had
discriminated against Smith. Thus, David did not have notice that
the Executive Director believed that he had violated the law as an
agent and could be held personally liable.
Petitioner notes that David was informed about conciliation
efforts by the attorney for the insurer, however, it appears that
David did not participate in conciliation efforts in any capacity.
After conciliation failed, the complaint was docketed for hearing.
The Commission believes that under the circumstances it would
be unfair to allow an amendment of the complaint to add David as a
party in his capacity as an agent and hold him personally liable.
In Wrangler v. Hawaiian Electric Co., Inc., 742 F.Supp. 1458, 55 EDP
sec. 40,350 (D. Haw. 1990), a court allowed the filing of a civil
complaint naming certain individuals, who were not originally named
as parties in the administrative complaint, as defendants because
the facts of the administrative complaint implied their involvement
in the discriminatory practice, and there was no prejudice because
they were on notice that they could be held individually liable. In
this case, the administrative complaint did not have facts implying
David's involvement in the discriminatory practice[4] or placing him
on notice that he could be held personally liable.
It appears that in denying the motion, the Hearings Examiner
carefully balanced the goal of providing full relief to Smith with
the unfairness of adding David as a party during the contested case
hearing stage. The administrative complaint was filed on October 3,
1994, or 3 years and 3 months before the motion to amend. David was
prejudiced by the passage of time before the motion was filed
because his alleged participation in the reinstatement decision was
known to Smith at the time of the complaint.
IV. ORDER
IT IS HEREBY ORDERED THAT the Petition for Declaratory Relief
is summarily denied under H.A.R. sec. 12-46-63(b)(1).
Petitioner may seek reconsideration under H.A.R. sec. 12-46-38 by
filing a motion with ten days of receipt of this order. Petitioner
may seek judicial review in the circuit court under H.R.S. sects. 91-8
and 14 within thirty days after service of the final decision and
order.
DATED: Honolulu, Hawaii
CLAUDIO SUYAT
Commissioner
ALLICYN HIKIDA TASAKA
Commissioner
FAYE KENNEDY
Commissioner
JACK LAW
Commissioner
HARRY YEE
Commissioner
CIVIL RIGHTS COMMISSION
STATE OF HAWAI'I
WILLIAM D. HOSHIJO, Executive ) DOCKET NO. DR 98-0012
Director, on behalf of the )
complaint filed by SHAWN M. )
SMITH, )
)
vs. )
TABERU MANAGEMENT, INC. dba RB )
HONOLULU #1 and ARBY'S INC. )
)
Respondents. )
________________________________)
DISSENT BY COMMISSIONER KENNEDY
I respectfully disagree. I believe that there were sufficient
grounds to grant the motion to amend to add a new party for the
reasons presented by the Executive Director.
DATED: Honolulu, Hawaii,
FAYE KENNEDY
------------------------------------
footnotes:
1. According to the Motion to Amend filed with the Hearings
Examiner on January 13, 1998, Taberu's insurer Resure, Inc. sought
bankruptcy protection in February 1997. Memorandum in Support of
Motion, at 9.
2. Smith submitted an affidavit in support of the Motion to Amend
alleging that she telephoned David after being informed by a Taberu
vice-president that she would not be reinstated after her pregnancy.
David allegedly informed her that under the terms of the agreement
with the Arby's, the purchaser of the franchise, all employees would
be terminated as a condition of the sale.
3. Under H.A.R. sects. 12-46-6.1(a) and (b)(2), a complaint may be
amended by the Executive Director to name a new party prior to the
commencement of proceedings before the Hearings Examiner. In Tseu
ex rel. Shaw vs. Sam Teague, Inc., and Sam Teague, individually,
Docket No. 94-001-E-P; aff'd, Civil No. 95-1164 (Cir. Ct. 1st Cir.,
February 7, 1996); appeal pending, Docket No. 19691 (Hawai`i Sup.
Ct.), the Circuit Court upheld the Executive Director's amendment of
the complaint to add a new party during the investigation.
4. It is not implicit from the facts of the complaint that David
was involved in the decision not to reinstate Smith after her
pregnancy leave.
